Operations & Supply Chain Management | Chapter 4 | Part 1 | MBA MCQs | OSM

Operations and Supply Chain Management MCQs

  

 

1. Which of the following is not an inventory?
   1.   Machines
   2.   Raw material
   3.   Finished products
   4.   Consumable tools
2. The following classes of costs are usually involved in inventory decisions except
   1.   Cost of ordering
   2.   Machining cost
   3.   Cost of shortages
   4.   Carrying cost
3. The cost of insurance and taxes are included in
   1.   Cost of ordering
   2.   Set up cost
   3.   Inventory carrying cost
   4.   Cost of shortages
4. ‘Buffer stock’ is the level of stock
   1.   Half of the actual stock
   2.   Minimum stock level below which actual stock should not fall
   3.   Maximum stock in inventory
   4.   At which the ordering process should start
5. The minimum stock level is calculated as
   1.   Reorder level – (Nornal consumption x Normal delivery time)
   2.   (Reorder level + Nornal consumption) / Normal delivery time
   3.   (Reorder level + Nornal consumption) x Normal delivery time
   4.   Reorder level + (Nornal consumption x Normal delivery time)
6. Which of the following is true for Inventory control?
   1.   Economic order quantity has minimum total cost per order
   2.   Ordering cost decreases with lo size
   3.   All of the above
   4.   Inventory carrying costs increases with quantity per order
7. The time period between placing an order its receipt in stock is known as
   1.   Lead time
   2.   Carrying time
   3.   Shortage time
   4.   Over time
8. Re-ordering level is calculated as
   1.   Minimum consumption rate x Maximum re-order period
   2.   Maximum consumption rate x Maximum re-order period
   3.   Minimum consumption rate x Minimum re-order period
   4.   Maximum consumption rate x Minimum re-order period
9. Average stock level can be calculated as
   1.   Maximum stock level + ½ of Re-order level
   2.   Maximum stock level + 1/3 of Re-order level
   3.   Minimum stock level + 1/3 of Re-order level
   4.   Minimum stock level + ½ of Re-order level
10. The Economic Order Quantity (EOQ) is calculated as Where, D=Annual demand (units), S=Cost per order, h=Annual carrying cost per unit
    1.   (D*S/2h)^1/2
    2.   (2D*S/h)^1/2
    3.   (DS*/h)^1/2
    4.   (D*S/3h)^1/2
11. The order cost per order of an inventory is Rs. 400 with an annual carrying cost of Rs.
    10 per unit. The Economic Order Quantity (EOQ) for an annual demand of 2000 units is
    1.   400
    2.   440
    3.   480
    4.   500
12. Inventory is needed
    1.   To economize on manufacturing cost
    2.   To stabilize production
    3.   All of the above
    4.   To take care of contingencies
13. The stock of the materials kept in the stores in anticipation of future demand is known as
    1.   Storage of materials
    2.   Raw materials
    3.   Inventory
    4.   Stock of materials
14. The rent for the stores where materials are stored falls under
    1.   Ordering cost
    2.   Stocking cost
    3.   Procurement cost
    4.   Inventory carrying cost
15. One of the important basic objective of inventory management is
    1.   To calculate EOQ for all materials in the organization
    2.   Once materials are issued to the departments, personally check how they are used
    3.   To employ the available capital efficiently so as to yield maximum results
    4.   To go in person to the market and purchase the materials
16. We can reduce the materials cost by
    1.   Using systematic inventory control techniques
    2.   Using the cheap material
    3.   Reducing the use of materials
    4.   d) Making hand to mouth purchase
17. Insurance charges of materials cost falls under
    1.   Ordering cost
    2.   Inventory carrying cost
    3.   Procurement cost
    4.   Stock out cost
18. Procurement cost may be clubbed with
    1.   Inventory carrying charges
    2.   Stock out cost
    3.   Ordering cost
    4.   Loss due to deterioration
19. Piece parts inventory comes under the type of
    1.   Raw material
    2.   Finish parts
    3.   Finish goods
    4.   Tools
20. Abrasive materials comes under which type of inventory
    1.   Finish goods
    2.   supplies
    3.   WIP
    4.   Machinery spares