topic 6: materials management - wordpress.com · sixth semester management mcq’s materials...

Sixth Semester Management MCQ’s Materials Management

Designed & Developed by – S. K. Rawat 6.1

TOPIC 6: MATERIALS MANAGEMENT

Sr. No. Statement Option (a) Option (b) Option (c) Option (d) Ans

1 _____________________________ is the process of planning, procuring, storing and providing the appropriate material of the right quality, right quality at the right place in the right time.

Financial management

Materials management

Operation management

Marketing management

b

2

_____________________________ is a detailed list of movable items which are required for manufacturing products and maintaining the equipment and machines in good working order.

Inventory Production Purchase None of these a

3 Inventory consists of _______________________________________________. raw material work in progress finished products all of these d

4 _____________________ inventory includes purchase of raw material, semi-finished components, standard components or/and subassemblies from suppliers.

Raw material In-process Finished product Indirect a

5 _________________________ inventory includes the finished products lying in the warehouse and waiting for dispatch.

Finished product Raw material In-process Indirect a

6 _________________________ inventory consists of semi-finished components.

Finished product Raw material Indirect In-process b

7 In ABC analysis which inventory is classified into category ‘A’ items?

Annual consumption cost is around 15-25%



Annual consumption cost is around 50%

b

8 In ABC analysis which inventory is classified into category ‘B’ items?





a



9 In ABC analysis which inventory is classified into category ‘C’ items?





c

10 Complex and expensive parts are items that require strict management and control are called ____________.

Items A Items B Items C None of these a

11 Low complex and low cost items that are typically commercially available and require little managerial control are called ______________.

Items A Items B Items C None of these c

12 In a car assembly factory, the high value items like engine are considered as ___________.

Items A Items B Items C Items D a

13 Items like nuts, bolts, screws etc. for a car assembly factory are considered as ____________.

Items A Items B Items C Items D c

14 _____________ is defined as "the optimal quantity of orders that minimized total variable costs required to order and hold inventory."

ABC TQM MRP EOQ d

15 While deciding how to manage inventory, the question to be answered is _____________________________________.

How much should we order and how often should we order?

Who should we order and when should we order?

Whom should we order and how should we order?

Why should we order and when should we order?

a

16 EOQ is a formula that determines the _____________ at which the combination of procurement costs and inventory carrying costs are the least

Quality Cost Profit Quantity d

17 Which of the following is not correct assumption in calculating EOQ?

The ordering cost is constant

The rate of demand/consumption does not change

The lead time is not fixed

The purchase price of the items does not change with quantity i.e. no discount is available

c



18 Procurement costs consist of ______________________________. Cost of receiving quotations

Cost of processing quotation and issuing purchase order

Cost of following up and expediting purchase order

All of these d

19 Each event of ordering has a certain cost associated with it called _________________________________.

Procurement cost Carrying cost Holding cost None of above a

20 Which of the following is not procurement cost? Transportation cost

Cost of receiving, inspecting and stocking material

Cost of processing vendor’s invoice

Storage cost d

21 Carrying cost consists of __________________________. Interest on capital investment

Storage cost Up-keep of inventory

All of these d

22 Carrying (holding) cost ________________________________________. increase as you hold more and more inventory

decrease as you hold more and more inventory

increase as you hold few inventories

None of these a

23 The procurement costs _________________________________. increase as quantity ordered increases

decreases as quantity ordered decreases

decreases as quantity ordered increases

None of these c

24 EOQ can be used by ________________________________. Make-to-stock manufacturer

Purchase-to-stock distributors

Departmental stores

All of these d

25 The objective of purchasing is __________________________________. To procure wrong material

To ensure quality of purchased material

To procure material in high material

To procure material at high price

b

26 Which of the following is not objective of purchasing? To procure material at reasonable price

To develop reliable sources of supply

To develop alternating sources of supply

To facilitate waste d



27 Which of the following is wrong?

The specification of the material to be purchased must be constant

The quality of the finished product largely depend upon the quality of material used

The quantity material and supplies purchased must be such that production schedule is not disrupted

Inventories throughout the supply chain are as high as possible

d

28

The main function of purchasing department is: 1. Keep record of reliable and also alternative source of supply 2. Maintain update pricelist of all material 3. Ensure uninterrupted supply of material 4. Preparation of purchasing budget

All Only 1 and 2 Only 2 and 3 Only 2 and 4 a

29 Whenever a department needs an item, it is officially brought to the notice of the purchasing department by filing a purchase requisition from. The next step is-

Exact quantity of material to be purchased and its specification is decided

Prepare a list of suppliers who deal with the business of the articles to be purchasing and are reliable

Pen the quotations at prescribed time on the prescribed date

Prepare a comparative statement of the, terms and conditions mentioned in the quotation and then analyze them

a

30

Put the following in chronological order while purchasing material 1. After receiving the purchase requisition forms, exact quality of material to be purchased and its specification are decided 2. Call for quotation at prescribed time 3. Then prepare a list of suppliers who deal with the business of the articles to be purchased and are reliable 4. Request for supply is made on prescribe quotation from to all the selected source of supply

1,2,3,4 1,3,2,4 2,4,3,1 1,4,3,2 b



31

Arrange the following in chronological order while purchasing material 1. Receive purchase requisition from department 2. Call for quotation 3. Inspect the material 4. Place purchase order

1,2,,4,3 3,4,2,1 2,1,4,3 4,2,1,3 a

32

Arrange the following in chronological order while purchasing material. 1. Place order 2. Payment of bill 3. Receive material 4. Inspection

1,3,2,4 1,2,3,4 1,3,4,2, 4,3,1,2 c

33 Which of the following is not a step in purchasing?

If necessary, request for quotation is made on prescribed quotation form to all the selected sources of supply

To achieve integration with other departments of the company

Open the quotations at described time on the prescribed date

Prepare a comparative statement of the rates, terms and condition mentioned in the quotations and then analyze then

b

34 The modern technique of material management is _______________. ISO MRP TQM EOQ b

35 The modern technique of material management is _______________. ISO TQM EOQ ERP d

36 __________ is a planning technique that calculates material requirement and schedule supply to meet changing demand across all product and parts.

TQM ISO MRP QA c

37 Which of the following is not input to MRP? ERP BOM Inventory record file

MPS a

38 Which of the following is function of MRP? To calculate what parts should be made or bought

To calculate how many of these parts do we need

To calculate when must these parts be available

All of these d



39 Which of the following statement is wrong about MRP?

MRP insures that materials and components are available on the right quantities and at the right time

MRP takes information from the bill-of-material (BOM)

MRP takes information from MPS

None of these d

40

The master production schedule is a list of- 1. What end products are to be produced? 2. How many of each product is to be produced? 3. When the products shall be ready for shipment?

Only 1 Only 1 and 2 Only 2 and 3 All of these d

41 __________ is a list of component part and sub-assemblies needed to produce the final product.

MPS MRP BOM ERP c

42

The Bill of Materials (BOM) provides- 1. A product structure (tree) 2. List of what is needed for each component, sub-assembly and

assembly

Only 1 Only 2 Both 1 and 2 None of these c

43 ____________________ is the time required to manufacturer or purchase a component or assembly.

EOQ BOM Lead time ERP c

44 The _________________ keeps track of the inventory status for each item in the database.

Lead time BOM Inventory record file

Product structure c

45 Which of the following output of MRP? BOM MPS Inventory record file

Production schedule

d

46 Which of the following are benefits of MRP? Reduced inventory with fewer storage

Improved customer service

Improved direct labour productivity

All of these d



47 Which of the following is not benefit of MRP? Reduced inventory with fewer storage

Improved customer service

Improved quality reduced purchasing cost

c

48 ____________ is a computer-based system decision to streamline and integrate various operation and information flows in the company.

MRP ERP MPS TQM b

49 Instead of each department having its own database of information, _____________ puts all of the information into a single place.

MRP MPS BOM ERP d

50 A sales person can access the warehouse, inventory and delivery to give a customer a quick update on the status of his order through _____.

MRP MPS BOM ERP d

51 Which of following is not features of ERP?

ERP is an integrated system which functions in real time not requiring you to depend on periodic updates

It has a common data base

Each module has the different look and feel

Each department is able to access the system

c

52 Which of following is feature of ERP? ERP synergizes the resources of an organization

The planning of the company can be done with use of this system since it contains all the necessary decision making information

ERP has common data base

All of these d

53 Economic order quantity of material takes into account ordering cost and ______________________.

Carrying cost Lead time re- order level Maximum level a

54 In ABC system of inventory control, the material is divided in A, B and C categories on the basis of _________________________.

Material quantity Consumption value of material

Re-order level of each material

Maximum level of material

b

55 Order cost and carrying cost are _____________ cost in nature. Fixed Variable Semi-variable Indirect b



56 __________________ of ERP gathers financial data from various functional departments, and generates valuable financial reports.

Financial module Human resource module

Production module

Purchasing module

a

57 ___________________ of ERP maintains a complete employee data based including contact information, salary details, attendance, performance evaluation and promotion of all employees.


Production module

Purchasing module

b

58 __________ of EPR streamlines procurement of required of raw material.


Purchasing module

Production module

c

59 What are the functions of materials management? Material planning Purchasing Store management All of these d

60 A well-coordinated material management programme may result into ___________________________.

increase in inventory

cost increase cost reduction decrease in inventory

c

61 Material handling cost means _____________________________________. loss due to deterioration

cost to be paid to costumer

cost of handling material

cost of handling material

d

62 Freight cost means ________________________________________________. cost of packing of material.

cost to be paid to customer.

cost required for movement of material.

inspection cost c

63 Market research is necessary for to get ___________________________________.

excessive material in advance.

information about market condition and availability of material.

goods stored in plant

required inventory b

64 Packing cost means ______________________________________________. cost of packing of goods

cost to be paid to customer

cost required for movement of material.

inspection cost a

65 What do you mean by insurance cost? Cost of insurance of goods while they are in transit.

Cost to be paid to costumer.

Cost of packing of material.

Cost required for movement of material.

a

66 Inventory control means ________________________________________________.

timely availability of materials

value analysis of costly materials

availability of material at low cost

all of these d



67 Evaluation and development of reliable supplies is a function of _______________________________________.

materials management

sales department production department

None of these a

68 Material planning is based on data from ________________ department

sales production purchase finance a

69 A detailed list of all kinds of goods handled by business is called ______________________.

production design inventory operation research c

70 Finished goods means goods waiting for dispatch to __________________.

customer supplier purchase none of these a

71 Raw material includes _____________________________________________________.

semi – finished components

material in stores sub-assemblies All of these d

72 What do you mean by finished part? part which is ready to dispatch to customer

material in stores semi- finished components

sub- assemblies purchased from suppliers

a

73 Inventory consists of _______________________________________________________.

raw material indirect material work in progress all of these d

74 Excess inventory may lead to ______________________________________________.

profit loss less space none of these b

75 Excess inventory needs _____________________________________. more funds less funds less space none of these a

76 Tools, lubricant, cutting fluids are _____________________________________.

indirect materials direct materials work in progress none of these a

77 ABC analysis helps senior manager to control _________________________.

inventory cost purchase cost total cost none of these a

78 Which are the most important items in ABC analysis? A items B items C items None of these. a

79 __________________ helps managers to have selective control and focus attention only on important items required for production.

ABC analysis EOQ Inventory control None of these a

80 A' class of items have _____% of total consumption cost. 10 to 20 20 to 30 40 to 50 70 to 80 d

81 C' class of items have ______% of total consumption cost. 50-60 40-50 15-May 70-80 c

82 Annual _______ cost = unit price x annual consumption volume. consumption protection investment none of these a

83 First step in preparation of ABC analysis is ______________________________.

preparation of list of all items

determine unit price

get annual consumption

none of these a



84 Various costs associated with ordering and receiving of goods are called ________________________________________.

procurement cost inventory cost holding cost none of these a

85 Holding cost is also known as __________________________. receiving cost caring cost producing cost design cost b

86 Procurement cost is obtained by plotting _____________ against ordered quantity.

cost investment profit none of these a

87 Purchasing is one of the function of ___________________ management.

production materials design none of these b

88 _______________________ means procuring goods and services. Purchasing Selling Inventory None of these a

89 The _______________ provides the information about when to order and how much to order.

MRP ERP inventory none of these a

90 The expenses on travelling may be an element of __________________ cost.

holding fixed procurement none of these b

91 The lists of components that make up a final product are called _______________________________.

Bill of materials DOL ERP MRP a

92 __________________ department floats enquiries and processes quotations.

Sales Purchase Production Inventory b

93 ERP stands for ___________________________________________. enterprise reform planning

enterprise resource planning

enterprise resource plan

none of these b

94 ________ is an integrated system to manage business. ERP MRP DOL EOQ a

95 Which one of the following can be an ERP module? human resource sales and marketing

finance All of these d

96 Which is the function involved in material management. Purchasing Story Distributing All of these d

97 _____________________________ is a part of material management. Inventory management

Finance management


Human Resource management

a

98 ________________________ is the collective stock of items which is required for routine functioning of industry.

Purchase Inventory Tool room None of these b

99 The stock of material, maintain in order to avoid ‘no stock’ situation is called as _____________________.

additional stock extra stock buffer stock none of these c



100 Which is the function of inventory? Insures availability of material

Proper purchasing guidelines

Preventing stock out

All the above d

101 ABC analysis is the _________________________ concept. finance inventory management

HR administration b

102 Which is the first step in ABC analysis? Determining unit price

Arranging item in deciding order

Deciding the policies

Preparing the list of all items

d

103 In EOQ ________________ quantity is ordered. Minimum Maximum Optimum Average c

104 Which is not the cost concerned with EOQ? Procurement cost Inventory carrying cost

Total cost Primary cost d

105 In graphical method of EOQ, the cost which is represented as straight inclined line is _____________________________.

Procurement cost Inventory cost Total cost Carrying cost b

106 Which is the assumption in EOQ? Cost of placing order is variable

One stock out is allowed

Rate of demand is not known to us

Uniform demand of the item

d

107 Procurement cost per order includes ___________________________________.

Cost of calling quotations

Cost for receiving material

Cost of inspection All of these d

108 When any item is out of stock then _________________ cost involves?

Overstocking Under stocking Out of stocking None of these b

109 When stock is more than the required then ___________ cost involves?

Under stocking Over stocking More stock None of these b

110 Annual consumption of the item is represented by ________ in EOQ.

A AC S None of these c

111 Economic order quantity is represented by __________. Qo Eo Eq None of these a

112 Buffer stock is nothing but __________________________. new stock safety stock confused inventory

unnecessary stock b

113 What will happen when there is no buffer stock? Production stoppage

Delay in deliveries Loss of reputation All of these d

114 Calling quotations, order follow-up, material receiving, placing PO are the functions of ______________________ department.

quality purchase inventory Marketing b



115 PO in materials management means? Placement officer Post officer Purchase order None of these c

116 The logic of ______ is based on the principle of dependent demand

MRP MRP II ERP SAP a

117 _______ determine quantity and timing for material planning. MRP II ERP SAP MRP d

118 Which is the input to MRP? Current forecasting

Order history and season

Bill of material All of these d

119 ERP means _____________________________________ Enterprise resource panning

Entry restricted products

Energy resources product

None of these a

120 ________________ uses all resources of the enterprise in a systematic way.

MRP MRP II ERP None of these c

121 Which are the functions in materials management? Planning Warehousing Storage management

All of these d

122 ________________________ can be defined as an attempt to balance inventory needs and requirements with the need to minimize costs resulting from obtaining and holding inventory.

Financial management


Inventory management

None of these c

123 _____________ include raw material and semi-finished products supplied by another firm and which are raw items for the present industry.

Raw inventories In-process inventories

Finished inventories

Indirect inventories

a

124 ____________________ involves semi-finished goods various stage of manufacturing cycle.

Raw inventories In-process inventories

Finished inventories

Indirect inventories

b

125 ABC analysis plays a vital role in _____________________ management.

Finance Inventory Human Resource Marketing b

126 Which is the first step in ABC analysis? Arranging the items

Determine unit price

Preparing the list of all item

None of these c

127 EOQ stands for _______________________________. Economic order quantity

Economic order quality

Economics order quality

None of these a

128 What is an assumption in EOQ? Lead time is known and is constant

Total cost Primary cost All of these a



129 _______________ avoid effects like price fluctuation and shortage of material in the market.

Buffer stock EOQ Bothe a and b None of these b

130 Which of the following options is an advantage of EOQ? EOQ avoids running out of stock

Inventory maintenance cost is reduced

If the cost of product is reduced then EOQ is not applicable

EOQ does not support longer lead time

a

131 EOQ does not work, if _________________ order quantity is company.

maximum minimum smaller None of these b

132 __________________ function can be defined as procuring different types of material for an organization from different sources.

Purchasing Purchase order Purchase department

All of these a

133 The purchasing function plays the role of mediator between ____________ and __________________ for purchase of material.

vendors, control organization, control

vendors, organization

none of these c

134 Which is the first step in purchasing? Maintenance of records and files

Issuing the purchase order

Making request for quotations

Analysis of purchase requisition

d

135 The important functions of purchase departments are __________________________.

preparation of purchasing budget

track pending purchase order

issue and follow up purchase order

all of these d

136 __________________________ is set of activities that ensure right material at right quality and quantity in right time.

Procurement Purchasing Production Placement a

137 Procurement activity is __________________ and takes more time. simple complicated difficult Easy b

138 ________________________ is an intelligent activity includes decision making, selection of vendors etc.

Purchasing Purchasing department

Procurement Purchase order c

139 ________________ is just a transaction and is basic activity of purchase department.

Purchasing Placement Procurement Purchase order a

140 MRP means _________________________________________. Material requirement process

Material requirement planning

Material required planning

Material resources planning

b



141 ERP means ____________________________________. Enterprise resources planning

Enterprise resources planning

Enterprise resources process

None of these a

142 For staffing, inventory production etc. company develops and design a plan called as ________.

MPS MRP EPS ERP a

143 The inputs to MRP are ______________________________________________________.

master production schedule and order data

bill-of material file inventory record file

all of these d

144 _____________ is a plan that views future production of end of product.

MPR MPS ERP None of these b

145 _____________________________________ is made up of list of the sub-assemblies as well as components that makes up the end product.

Master production schedule

Inventory record file

Bill-of-material Material resource Planning

c

146 Inventory record file also called as ____________________________________.

Item master file Inventory record file

Bill-of-material file None of these a

147 ___________ can be defined as an integrated information system that serves all departments within an enterprise.

MRP MPS ERP SAP c

148 The SAP ERP product is very popular for material management called as _____________________________________.

Material requirement planning

Enterprise Resource Planning

Material resource planning

Material management module

d

149 Sales and marketing is module of ________. ERP MRP SAP None of these a

150 ___________________ meet regularly, usually once a week for an hour, under the guidance of their leader.

TQM members Quality circle members

Quality team 5S members b

151 An objective of inventory management includes ________________________ objectives.

financial property protection

operational

financial, operative and property protection

d

152 Identify the system, which show the essential elements used in Master Production Schedule as its basis for any material control system.

MRP ERP EOQ ABC analysis a



153 ABC analysis divides an organization on hand inventory into three classes based upon __________________________________________.

annual consumption value

annual consumption

unit price the number of units on hand

a

154

The process or approach as seen in the figure, attempts to consolidate all of a company’s departments and functions into a single computer system that services each department’s specific needs. Identify the system.

MRP MRP-II ERP EOQ c



155 Pick the false statement about ERP vendors

They have been slow to develop offerings related to e-commerce

They have a huge installed base of customers

They are now shifting gears to develop applications for good electronic commerce websites

They have a virtual stranglehold on "back-office" functions such as order fulfillment

c

156 In this Stock control chart, label the maximum stock level and minimum stock level –

(a) Minimum stock level (b) Maximum stock level

(a) Minimum stock level (c) Maximum stock level

(b) Minimum stock level (c) Maximum stock level

(b) Maximum stock level (c) Minimum stock level

a



157 Which of the following methods of stock control aims at concentrating efforts on selected items of material?

Perpetual inventory system

Material turnover ratio

Level setting ABC analysis d

158

From the EOQ, label the cost at point 1 and 2.

(1) Ordering cost (2) Storage cost

(1) Storage cost (2) Ordering cost

(1) Inventory cost (2) Ordering cost

(1) Ordering cost (2) Inventory cost

a

159 The table below shows the list of items as per their annual consumption and annual consumption value. Can you identify which type of analysis is this to have proper inventory control?

Control analysis Cost analysis Pareto analysis None of the above c



160

The figure shows a graphical method for determining the order quantity which attempts to minimize total inventory cost. Which is this tool used to answers the following questions. (1) How much should I order? (2) How often should I place each order?

EOQ ABC analysis Control chart ERP a

161 Ups and downs in consumption and delivery period are absorbed by _______________________________.

Buffer stock EOQ Procurement strategy

None of these a

162 In this Stock control chart, label the buffer stock – (a) Between (b) and (c)

Between (a) and (b)

(c) a



163 ________________________________ is set of activities that ensure right material at right quality and quantity in right time.

Procurement Purchasing Planning Procedure a

164

From the graph of graph of inventory level versus time, the value Q/2 is called __________________.

Final inventory Average inventory Total inventory Zero value inventories

b

165 In EOQ, annual ____________________ cost = unit price * annual consumption volume.

Consumption Protection Investment None of these a



166

From the graph, the point Q at which slope = 0, is called __________________________.

Quantity Order Quantity Economic Order Quantity

Quality c

167 The principal files that are incorporated into a computerized MRP system are:

inventory record, master schedule, BOM.

inventory record, master file, part-period balancing program.

capacity requirements planning file, master schedule, inventory record.

MRP computer program, master schedule, capacity requirements planning file.

a

168

Identify this basic inventory control technique which is often applied to almost all aspects of materials management.

Pareto analysis Tally Table EOQ Control chart a

169

A producer of consumer goods wants to analyze its product range from product 1 to product 13. The management has decided to use the annual consumption value (ACV) as the key figure to assess the product range. An ABC analysis is done and the raw data is order in decreasing order of ACV. How have they classified the product group in A, B and C category items?

G1 – A items G2 – B items G3 – C items

G1 – B items G2 – C items G3 – A items

G1 – C items G2 – A items G3 – B items

G1 – C items G2 – C items G3 – A items

a

topic 6: materials management - wordpress.com · sixth semester management mcq’s materials...

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