plan?
a. Linear programming b. Linear Decision Rules
c. Pre-determined Motion Time Study d. Heuristic models
45. Operations planning activities can be long-range, medium-long-range, or short-range in nature. Process planning typically falls under which category?
a. Long-range planning b. Medium-range planning c. Short-range planning d. Both b & c
46. As the Master Production Schedule (MPS) is based on an estimation of overall demand for the end product, the actual production output is not always equal to the actual demand. Operations managers can modify the MPS to adjust to these deviations. Which of the following is not the correct approach to adjust deviations?
Fo r I BS U se On ly Cl ass of 20 09
a. Allowing inventory level to increase when demand is low and vice-versa
b. Modifying the size or composition of the product temporarily
c. Sub-contracting additional capacity requirements
d. Maintaining product prices to influence the demand level
47. When a firm achieves economies of scale, production costs reduce considerably. This results due to which of the following?
i. Decrease in per unit cost ii. Decrease in fixed costs iii. Decrease in variable costs iv. Decrease in inventory costs a. i and ii
b. i and iii b. ii and iii c. i, ii and iii
48. A master production schedule of make-to-order organizations contains information about which of the following?
a. Quantities and required delivery dates of the final product
b. Quantities and required delivery dates of all sub-assemblies
c. Inventory on hand for each component
d. Scheduled receipts for all components 49. Operations planning activities can be
long-range, medium range or short range in nature. Under which category do order scheduling and workforce scheduling typically fall?
a. Long-range b. Medium-range c. Short-range d. Both a & b
50. Which of the following is the basic objective of economic order quantity purchasing?
a. Minimizing total inventory cost b. Minimizing transport cost c. Minimizing storage cost d. Minimizing ordering costs
51. “Large shipments can result in reduced incoming freight costs and material handling costs.” This statement, given by manufacturing firms, refers to which type of inventory?
a. Raw material inventory b. Work-in-progress inventory c. Finished products inventory d. None of the above
52. Which of the following statements correctly describe the P-System?
a. Orders are placed at equal intervals of time b. Inventory is monitored continuously c. The order is placed so that total cost of
maintaining inventory is less d. Lead time for replenishment is zero 53. Which type of cost does a firm incur if the
rate of inventory replenishment is less than demand rate?
a. Stock-out costs b. Replenishment costs c. Production costs d. Direct costs
54. Which inventory model is also referred to as the reorder point system?
a. P system b Q system c. EOQ
d. None of the above
55. Before taking make-or-buy decisions, organizations take into account factors like availability of raw materials in the long-run, ability to monitor and control quality, etc. Which of the following is not an argument in favor of ‘buy’ decisions (outsourcing production)?
a. Take advantage of suppliers know-how and expertise
b. Quantity required is too low to justify in-house production
c. Helps maintain multiple supply sources d. Maintain control over supply chain
activities
56. What precedes a typical make-or-buy decision?
Fo r I BS U se On ly Cl ass of 20 09
a. Value analysis b. ABC analysis c. Break-even analysis d. Vendor analysis
57. The purchase department acts on behalf of the user departments and interacts with the suppliers to purchase materials at economic prices. This is associated with which activity of the purchase department?
a. Vendor analysis and development b. Supplier selection
c. Value analysis
d. Contract negotiation and communication interface
58. Which of the following purchasing instruments authorizes suppliers to supply goods for a firm?
a. Organizational document b. Purchase quotation c. Purchase requisition d. Purchase order
59. Identify conditions that influence a firm for a ‘buy’ decision.
i. The cost of purchasing the item is less than for manufacturing it
ii. The company does not have required manpower to make the item
iii. Expected returns on investment in manufacturing items are attractive
iv. The demand for the item (to be manufactured) is seasonal and there is risk in storing and maintaining it.
a. i, ii, iv b. ii, iii, iv c. i, ii, iii d. i, ii, iii, iv
60. Which of the following studies prompted management thinkers and organizations to take up in-depth research into human behavioral aspects at work?
a. Moving assembly lines b. Hawthorne studies c. Operations research d. Scientific management
61. Ingersoll Rand manufactures a limited variety of horizontal compressors and the customer has to select from the available models. What type of production policy is the company following?
a. Varying workforce production b. Standardized production c. Employee focused production d. Customized production
62. A tires supplier to the Maruti assembly line prides itself on providing the required quantity and types needed for every day production. What type of competitive advantage strategy is described here?
a. Differentiation strategy b. Straddling strategy c. Response strategy d. Level production strategy
63. Which of the following forecasting methods is an example for causal models?
a. Simple moving average b. Weighted moving average c. Exponential smoothing d. Regression analysis
64. What is the value of the mean forecast error for an accurate forecast model that is unbiased? commodity when the price of the commodity is reduced, keeping other things constant?
a. Increases continuously b. Decreases continuously c. Increases to a certain point d. Does not change
66. Proportionality is an assumption made in linear programming. It indicates that contribution of individual decision variables in the objective function is proportional to their numeric value. Which of the following can be derived from this assumption?
Fo r I BS U se On ly Cl ass of 20 09
a. Economies of scale play an important role in linear programming
b. Economies of scale do not play any role in linear programming
c. Finished products are not proportional to the amount of raw material consumed d. Does not consider any synergistic or
anti-synergistic effects among decision variables
67. The generalized objective function of a linear programming problem is ‘minimize Z = C1x1 + C2x2 + … + Cnxn.’ If X2 is decreased by one unit, what will the value of objective function be?
a. The value will increase by C2
b. The value will decrease by C2
c. The value will increase by one unit d. The value will decrease by one unit
68. Which of the following systems is the most appropriate for a production organization producing large volumes with very little scope for product variety?
a. Process focused system
b. Process focused batch production system c. Product-focused production system d. Cellular manufacturing system
69. A manufacturer decides to buy its marketing and distribution channels. What type of integration strategy is the manufacturer adopting?
a. Product expansion b. Forward integration c. Backward integration d. Diversification
70. The cost incurred in transporting raw materials and other components from different places must be considered while deciding on the location of a facility.
Which among the following methods helps analyze these costs?
a. Break-even analysis b. Point-rate method c. Transportation method d. All of the above
71. Identify the statement that does not