Production and Operations Management Online MCQ Set 9

QN01. What are the four stages of Simon's model of decision making?

  1. Intelligence, design, choice, implementation
  2. Intelligence, design, computation, implementation
  3. Information, design, choice, implementation
  4. Intelligence, data, choice, implementation
Answer

(A)Intelligence, design, choice, implementation

QN02. Which of the following best describes 'formal information'?

  1. Produced by standard procedures. Passed by word of mouth
  2. Produced by standard procedures. Objective
  3. Objective. Passed by word of mouth
  4. Subjective. Based on estimates
Answer

(B)Produced by standard procedures. Objective

QN03. MRP stands for:

  1. Master Resources Production
  2. Management Reaction Planning
  3. Materials Requirements Planning
  4. Manufacturing Resource Planning
Answer

(C)Materials Requirements Planning

QN04. A master production schedule contains information about

  1. Quantities and required delivery dates of all sub-assemblies
  2. Quantities and required delivery dates of final products
  3. Inventory on hand for each sub-assembly
  4. Inventory on hand for each final product
Answer

(B)Quantities and required delivery dates of final products

QN05. Optimized production technology (OPT) is a computer-based technique and tool which helps to schedule production systems. Which of the following are not principles of OPT?

  1. Capacity is "king"
  2. Balance flow is what is required
  3. Process batch should be variable
  4. Bottlenecks govern throughput
Answer

(A)Capacity is "king"

QN06. MPS stands for:

  1. Master Planning System
  2. Master Production Schedule
  3. Material Production Schedule
  4. Material Planning System
Answer

(B)Master Production Schedule

QN07. A master production schedule contains information about

  1. Quantities and required delivery dates of all sub-assemblies
  2. Quantities and required delivery dates of final products
  3. Inventory on hand for each sub-assembly
  4. Inventory on hand for each final product
Answer

(B)Quantities and required delivery dates of final products

QN08. Dependent demand and independent demand items differ in that

  1. For any product, all components are dependent-demand items
  2. The need for independent-demand items is forecasted
  3. The need for dependent-demand items is calculated
  4. All of the above are true
Answer

(D)All of the above are true

QN09. A master production schedule specifies

  1. The financial resources required for production
  2. What component is to be made, and when
  3. What product is to be made, and when
  4. The labor hours required for production
Answer

(C)What product is to be made, and when

QN10. Closed Loop MRP means:

  1. Actual inventory is counted regularly and adjustment made to the inventory records
  2. Capacity and resource planning is included in the MRP logic
  3. Unused materials are returned to stores and recorded back into the system
  4. Actual sales are netted off the forecasts in the MPS
Answer

(B)Capacity and resource planning is included in the MRP logic

QN11. Enterprise Resource Planning (ERP) has been criticised on a number of grounds. Which of the following is not a common criticism of ERP?

  1. It doesn't allow decisions and databases from all parts of the organisation to be integrated
  2. Implementation is expensive
  3. The effect it has on businesses is disappointing
  4. It can have a disruptive effect on the organisation's operations
Answer

(A)It doesn't allow decisions and databases from all parts of the organisation to be integrated

QN12. Demand for a given item is said to be dependent if

  1. the item has several children
  2. there is a deep bill of materials
  3. the finished products are mostly services (rather than goods)
  4. there is a clearly identifiable parent
Answer

(D)there is a clearly identifiable parent

QN13. In MRP (Materials Requirements Planning) the Bill of Materials is:

  1. The required output from a process over time
  2. A list of required safety stock items
  3. The sum of stock-on-hand and work-in-progress
  4. The product structure showing where common parts are used
Answer

(D)The product structure showing where common parts are used

QN14. What is measurementship?

  1. Trying to agree low objectives so as to look good later
  2. Discussing “the numbers” at every opportunity
  3. Surveying by naval architects.
  4. Collecting too much performance data
Answer

(A)Trying to agree low objectives so as to look good later

QN15. The outputs of a MRP II system are:

  1. Sales order priorities / Bills of Materials / Material Requirement Plans
  2. Material Requirement Plans / scheduled purchase orders / capacity requirement plans
  3. Stock quantities / Bills of Materials / Master Production Schedule
  4. Capacity requirement plans / stock quantities / stock locations
Answer

(B)Material Requirement Plans / scheduled purchase orders / capacity requirement plans

QN16. Three levels of planning. What are they?

  1. Top, middle and bottom
  2. Headquarters, divisional and local
  3. Operational, intermediate and strategic
  4. None of these
Answer

(C)Operational, intermediate and strategic

QN17. Three inputs for every MRP system are:

  1. Sales forecast, delivery costs, capacity plan
  2. Average replenishment time, re-order point, economic order quantity
  3. Stock on hand, Master Production Schedule, Bill of Materials
  4. Bill of Materials, sales forecast, sales history
Answer

(C)Stock on hand, Master Production Schedule, Bill of Materials

QN18. What three problems commonly hindering successful planning did we identify?

  1. An oversized planning department; poor co-operation between managers and planners; managers with little time to gather information.
  2. Procedures unsuited to change; negative organisational culture; poor interpersonal relationships.
  3. Lack of planning expertise; little top management support; misuse of planning specialists.
  4. Conflict among objectives; impossibility of measuring outcomes; confusion between means and ends.
Answer

(C)Lack of planning expertise; little top management support; misuse of planning specialists.

QN19. What is the more formal term for what is known as 'Plan B'?

  1. A contingency plan
  2. A circumstantial plan
  3. A catastrophe plan
  4. A convergence plan
Answer

(A)A contingency plan

QN20. What is the planning horizon?

  1. The time ahead for which there is no information.
  2. The time period within which uncertainty is very low.
  3. The maximum time for which managers can make plans.
  4. The time between making a plan and putting it into effect.
Answer

(D)The time between making a plan and putting it into effect.

QN21. We identified several internal benefits of objectives, goals and a sense of mission. Which is not included?

  1. Basis of plans and decisions
  2. Unity of direction
  3. Basis to resolve disputes
  4. None of the above.
Answer

(C)Basis to resolve disputes

QN22. Identify the best definition of planning.

  1. The core activity of planners and planning departments.
  2. Setting an organisation's objectives and the means of reaching them.
  3. Devising ways of achieving the objectives of an organisation.
  4. An integrated process in which plans are formulated, carried out and controlled.
Answer

(B)Setting an organisation's objectives and the means of reaching them.

QN23. Business cycle, price trends, National Economy are ___________

  1. Micro Factors
  2. Macro Factors
  3. Controllable Factors
  4. All of these
Answer

(B)Macro Factors

QN24. Which is not a part of 5R's of buying?

  1. Right Quality
  2. Right Quantity
  3. Right Source
  4. None of the above
Answer

(D)None of the above

QN25. Buying of the annual requirements of an item during its season.

  1. Seasonal Buying
  2. Hand to mouth buying
  3. Scheduled Buying
  4. Tender Buying
Answer

(A)Seasonal Buying

QN26. __________________ is concerned with the branch of economics relating the behavior of principals and their agents.

  1. Financial management
  2. Profit maximization
  3. Agency theory
  4. Social responsibility
Answer

(C)Agency theory

QN27. Corporate governance success includes three key groups. Which of the following represents these three groups?

  1. Suppliers, managers, and customers.
  2. Board of Directors, executive officers, and common shareholders.
  3. Suppliers, employees, and customers.
  4. Common shareholders, managers, and employees.
Answer

(B)Board of Directors, executive officers, and common shareholders.

QN28. _________________ also called part lists or building lists is the document generated at the design stage.

  1. MRP (Material Requirement Planning)
  2. BOM (Bill of Materials)
  3. MPS (Master Production Schedule)
  4. None of these
Answer

(B)BOM (Bill of Materials)

QN29. Purchasing responsibilities can be divided into Buying, Clerical and __________________ division.

  1. Packing
  2. Traffic
  3. Record
  4. Follow up
Answer

(B)Traffic

QN30. ________________________ are the basic materials which have not undergone any conversion since their receipt from suppliers.

  1. WIP
  2. Raw Material
  3. Finished Parts
  4. Work Made Parts
Answer

(B)Raw Material

QN31. Which of the following statements is correct regarding profit maximization as the primary goal of the firm?

  1. Profit maximization considers the firm's risk level.
  2. Profit maximization will not lead to increasing short-term profits at the expense of lowering expected future profits.
  3. Profit maximization does consider the impact on individual shareholder's EPS.
  4. Profit maximization is concerned more with maximizing net income than the stock price.
Answer

(D)Profit maximization is concerned more with maximizing net income than the stock price.

QN32. __________________ is concerned with the maximization of a firm's stock price.

  1. Shareholder wealth maximization
  2. Profit maximization
  3. Stakeholder welfare maximization
  4. EPS maximization
Answer

(A)Shareholder wealth maximization

QN33. ___________________ is the scientific technique for planning the ordering and usage of materials at various levels of production and for monitoring the stocks during these transaction.

  1. MPS
  2. MRP
  3. BOM
  4. None of these
Answer

(B)MRP

QN34. Procuring an item in staggering deliveries according to the delivery schedule finished to the supplier by the buyer.

  1. Seasonal Buying
  2. Hand to mouth buying
  3. Scheduled Buying
  4. Tender Buying
  5. Speculative Buying
Answer

(C)Scheduled Buying

QN35. Which of the following statements is not correct regarding earnings per share (EPS) maximization as the primary goal of the firm?

  1. EPS maximization ignores the firm's risk level.
  2. EPS maximization does not specify the timing or duration of expected EPS.
  3. EPS maximization naturally requires all earnings to be retained.
  4. EPS maximization is concerned with maximizing net income.
Answer

(D)EPS maximization is concerned with maximizing net income.

QN36. __________________ is the time that elapses between issuing replenishment order and receiving the material in stores.

  1. Replenishment time
  2. Lead time
  3. Idle time
  4. All of these
Answer

(B)Lead time

QN37. __________________ is concerned with the maximization of a firm's earnings after taxes.

  1. Shareholder wealth maximization
  2. Profit maximization
  3. Stakeholder maximization
  4. EPS maximization
Answer

(B)Profit maximization

QN38. The first activity of Purchasing cycle is

  1. Communicating requirement to the purchase
  2. Source Selection and development
  3. Recognizing the need for procurement
  4. Inspection of goods
Answer

(C)Recognizing the need for procurement

QN39. What is the most appropriate goal of the firm?

  1. Shareholder wealth maximization.
  2. Profit maximization.
  3. Stakeholder maximization.
  4. EPS maximization.
Answer

(A)Shareholder wealth maximization.

QN40. __________________ is the task of buying goods of right quality, in the right quantities, at the right time and at the right price.

  1. Supplying
  2. Purchasing
  3. Scrutinizing
  4. None of these
Answer

(B)Purchasing

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