Operations & Supply Chain Management | Chapter 4 | Part 4 | MBA MCQs | OSM
Operations and Supply Chain Management MCQs
- ABC Classification
of inventory is a
means to
categorizematerials
in terms of their- Function
- Storage
requirements - Annual Usage
Value - Type
- Which of the
following inventory
control methods is
more appropriate
for items with
dependent demand
than for items with
independent
demand- Reorder Point
- Material
Requirement
Planning
(MRP) - Time Phased Order Point
- ABCAnalysis
- Each of the
following order
quantity methods is
considered a
discrete technique
except- Lot-for-Lot
- Fixed Order
Quantity - Periods of
Supply - Least Unit
Cost
- Each of the
following is an
advantage of a
locked stockroom
except- Quick access
to materials by
user - Reduced
Shortages - Less loss due
to shrinkage - Increased
record
accuracy
- Quick access
- The ABC
Classification
method would be
expected to reveal
that :- 20%of value is
in 80% of
items - 20%of value
is in 40% of
items - 20%of value is
in 60% of
items - 20%of value
is in 20% of
items
- 20%of value is
- Which of the
following activities
is not part of
physical supply
/distribution- Transportation
- Capacity
Planning - Order Entry
- Warehousing
- What is an
inventory record
systemthat keeps a
continuous account
of transactions as
they occur?- Perpetual
Inventory
System - Safety Stock
System - Two-bin
System - Period
Inventory
System
- Perpetual
- Periodic review
means- Ordering
inventory in
consultation
with suppliers relative to
their available
capacity - Ordering
inventory when
it falls below
the designated safety stock
level - Ordering
inventory at a
predetermined
re-order level - Ordering
inventory at
a fixed and regular time
interval
- Ordering
- Which of the
following are
NOT advantages
of a periodic
review system?- Lower safety
stock - Can permit
combining
orders to
common
suppliers - Convenient
administration
of inventory
control - All of the
above
- Lower safety
- The total cost for
a continuous
review system
with uncertain
demand excludes
consideration of- product cost
- ordering
cost - cycle inventory
holding cost - safety stock
holding cost
- A visual version
of the Q system- is the twobin
system - is the P
system - is the R
system - is the ABC
system
- is the twobin
- A P system has an
advantage over
the Q system- because
orders from
multiple
items from
one
supplier
can be
combined
into a
single
purchase
order - because
fixed lot
sizes, if large
enough, can
result in
quantity
discounts - because lower
safety stocks
result in
savings - because the
review
frequency of
each items
may be
individualized
- because
- A reorder point
will fall if- the variance
of demand
rises. - the chance
of a
stockout
falls - the setup cost
rises. - the lead time
falls.
- the variance
- Lisa’s Card
Cache uses ABC
analysis. Which
of the following
statements is
NOT true of ABC
analysis?- ABC
analysis
uses the
Pareto chart
concept - ABC
analysis
allows the
company to
control
inventory shrinkage - Generally, the
Class A items
account for
approximately
80 percent of
the Rupee
usage - Inventory
items are
ranked on the
basis of
Rupee usage
- ABC
- Which would be
the most
appropriate
method of
controlling stock
in a hotel bar?- Periodic
Review - Just-in-
Time - Two-Bin
System - Poke-Yoka
- Periodic
- Which would be
the most
appropriate
method of controlling stock
in a retail shop?- Two-Bin
System - Periodic
Review - Materials
Requirements
Planning - Order Point
- Two-Bin
- Under the ABC
system of
inventory
priorities a Class
A item is- The 80% of
high-value
items that
account for
around 80%
the total
stock value - The 20% of
high-value
items that
account for
around 80%
the total stock
value - The 20% of
high-value
items that
account for
around 20%
the total stock
value - The 80% of
high-value
items that
account for
around
20% the
total stock
value
- The 80% of
- All of the
following
statements about
ABC analysis are
true except- inventory
may be
categorized
by measures
other than
Rupee
volume - it categorizes
on-hand
inventory into
three groups
based on
annual Rupee
volume - it is an
application of
the Pareto
principle - it states that
all items
require the
same
degree of
control
- inventory
- ABC analysis is
based upon the
principle that- all items in
inventory
must be
monitored
very closely - there are
usually a few
critical items,
and many
items which
are less
critical - an item is
critical if its
usage is high - the safety
stock in
terms of
volume
should be
higher for
A items
than for
- all items in
- A disadvantage of
the fixed-period
inventory system
is that- it involves
higher
ordering
costs than
the fixed
quantity
inventory
system - additional
inventory
records are
required - the average
inventory
level is
decreased - since there
is no count
of
inventory
during the
review
period,a
stockout is
possible
- it involves
- Low Productivity
affects one of the
following- Quality of the
Product - None of the
above - delivery of the
product - Features of the
product
- Quality of the
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