Inventory Production Control

The two basic questions in inventory management are

• how much to order and when to order

Work measurement is not useful for choosing between two alternate methods of production.

• True
• False

The reorder point is the:

• Highest amount of stock
• Lowest amount of stock
• Average daily use
• Historical data

Total storage cost = ?

• average inventory x ordering cost per unit
• average cost x storage cost per unit
• storage cost + carrying cost
• number of times orderd x cost per order

Of all the work measurement techniques the most widely used techniques is________.

• Time study
• Production study

The effectiveness of sequencing model technique ________ if the company has backlog of

• Decreases
• Increases

Forecasting is function of ________.

• Chief Executive officer
• Marketing department

In alternate routing, the delayed job may be routed to a ________ machine where rate of production is faster.

• Costlier
• New

As the quantity increases, the procurement cost :-

• Reduces
• Increases

Annual Ordering cost is inversely related to the order quantity.

• TRUE
• FALSE
• No relationship between the two

Flexibility and product variety are not inter-related with each other.

• True
• False

C type items would never be vital under VED analysis.

• True
• False

Transit time for manufactured items should be considered only when it is insignificant.

• True
• False

In check list approach, ________ rating indicates that existing PPC system requires some major improvements in indicated areas.

• Good
• Poor
• Fair
• Bad

The sourcing of vendors in case of 'B' type of items is :-

• Medium
• Minimum

The tooling data is prepared in respect of following measuring instruments :-

XYZ analysis helps to identify few items which account for large amountof money locked up in the stock and take steps for liquidation /reduction.

• True
• False

PERT terminology uses words like :-

________ is the sum of set up time and run time.

• Lead time
• Manufacturing time

Generally for ________ flow system, Heuristic method is preferred.

• Intermittent
• Continuous

Given a decision for designing a line layout, major problem issubdividing a work so that smooth flow can result. The subdivisionprocess is called :-

• Line balancing
• Assembly line
• Load balancing
• Step or task constraint

________ inventories help to balance company's supply with market demand.

• Unfinished goods
• Finished goods

Which of the following is not an element of a distribution system?

• Purchasing
• Receiving
• Storage
• Patient charging

LOB has advantage that it is more ________ oriented than MRP.

• Practical
• Customer

Subsidiary orders include :-

In CPM, use of dummy activities is much essential .

• True
• False

The non-mathematical rationale of the assignment method is one of minimizing opportunity costs.

• True
• False

The software for CPA would require the following parameters:-

Random fluctuation is addition of cyclical fluctuation and seasonal fluctuation.

• True
• False

Reorder level determines how low inventory should be before reordering occurs.

• TRUE
• FALSE

Using the basic EOQ model, if the ordering cost triples, then the new order quantity will

• Increase about 73%
• Increase about 3%
• Decrease about 73%
• Decrease about 3%

CONCLUSION CHAPTER 7?

• ERROR
• percentages of a whole purchase
• control process to the production
• reduce labor costs involved

In replenishment system, the fixed order quantity system is also called by following names :-

Buying for C quantities should be made in ________ quantities .

• Small
• Large

WHAT A COUNT TO USED BY FOODSERVICE?

• PORTION SIZE
• DESIRE
• CONTROL BUDGET
• INVENTORY CONTROL

The variable costs per unit of holding an item in inventory for a specific period of time.

• order costs
• carrying costs
• total cost of inventory
• transaction cost

Orders with ________ slack time remaining per operation are run first.

• Shortest
• Longest

The minimum requirements for application software for line balancing are as follows :-

YIELD IN CULINARY TERMS REFERS?

• FINISH AND PROCESS
• PROCESS AND FINISH
• APPEARANCE PRODUCT
• STANDARD PORTION

The cost involved in subcontracting some of the operations of item outside the home plant is called :-

• Outside operations cost
• Outdoor cost

LOB is a manual planning and scheduling technique similar in nature to MRP [Material Resource Planning].

• True
• False

Scheduling can be considered as a process of :-

• Determining time required for each operation
• Fitting shop order into uncommitted time available for a machine

Move orders, released for material movement from stores to first work center are used for following types of organizations :-

Installed capacity :-

• Can be equal to or less than licensed capacity
• Cannot be equal to or less than licensed capacity

Following difficulties are faced by SDE analysis :-

HML Analysis helps to :-

The make-or-buy decision is not taken only at starting of a factory but has to be reviewed continuously.

• True
• False

An effective case cart system requires:

• Little space
• Infrequent cleaning of carts
• The user to enter a code
• Good communication

Effective capacity per period is calculated as :-

• Multiplication of net capacity with labour efficiency
• Multiplication of net capacity by utilization index

Supplies should never be stored

• On wire carts
• In a closed cabinet
• 8 inches off the floor
• On the floor

In ABC analysis, the classification is based on :-

• Carrying cost
• Cumulative cost

The 'G' group of GOLF analysis involves moderate delivery time and availability of credit usually in the range of 30 to 60 days.

• True
• False

Good quality and ________are the two main requirements to secure maximum business from a customer.

• Fixed rates
• Competitive rates

Among different types of costs associated with inventory, the opportunity cost of the investment tied up in inventory is a(n) ________.

• purchasing cost
• ordering cost
• stockout cost
• carrying cost

PERT uses linear programming and probability concepts for planning and controlling activities.

• True
• False

Work measurement is responsibility of :-

If more variety is to be manufactured, the manufacturing facilities would have to be :-

• Expanded
• Commonised

In PERT, use of dummy activities is not much essential.

• True
• False

What shall be the consequence of acceptance of frequent rush orders by sales department?

• Delivery failure
• Disturbed scheduling

On completion of work the job card is returned to production planning and control department for reference and record.

• True
• False

To operate fixed order quantity system, following parameters are required to be fixed:-

The Heuristics approach has a base of binary number theory.

• True
• False

Negative value of critical ratio :-

• Indicates shortfall in scheduled delivery period
• Is meaningless

The ordering cost per order is $400, and the carrying cost per unit is $10. What is the optimal order size considering an annual demand of 2000 units?

• 400
• 200
• 800
• More info is needed.

Detachable ticket, after filling in required information is :-

• Placed in a tray/box
• Given to progress section

Overtime can be avoided in many ways and they are :-

________ is a production line made up of operations that form or changethe physical or sometimes chemical characteristics of a product.

• Fabrication line
• Assembly line

Stock of finished goods are based on :-

• Marketing forecast
• Sales forecast

A progress card normally contains ________ squares.

• Less than 25
• Less than 35
• Less than 40
• Less than 55

Process Sheet contains following information :-

Transportation carts should be claned at least

• Daily
• Weekly
• Monthly
• Hourly

Steps involved in process planning include the following :-

DISADVANTAGE OF STANDARDIZED RECEPI

• LOST A TASTE
• HIGH VALUE
• LESS CREATIVITY
• LOW COST CONTROL

Moving average method lags behind the latest trend.

• True
• False

If efficiency is more, the manufacturing time required for completion of job would be generally :-

• More
• Less

The queue time is intended to compensate for the time for which the job has to :-

Earliest possible occurrence time [ I.e. stray time ] of activity [ies ] emanating from the

• Event time
• Mean time
• Lead time
• Earliest event time

If Kwh consumption per 100 pieces is 8.01 and cost/kwh is Rs 0.80 thecost of power over the year for 40000 pieces with 2000 numbersrejection would be Rs ________.

• 2691
• 2692
• 2693
• 2695

The make-or-buy decision is not related with profit of the factory.

• True
• False

Short term forecasts are for ________.

• Material Planning
• Sales forecasting

A type items are always vital under VED analysis.

• True
• False

Increase in inventory carrying cost increases EOQ.

• True
• False

The most efficient distribution system is the:

• Par level
• Total exchange cart
• Demand
• Just-in-time

In replenishment system, the type of ordering is either according to "stock level" or "pre-fixed time scale".

• True
• False

Physical Count method of collecting information from manufacturing shops is applicable in following situation :-

• Workshops employing few machines
• Workshops producing small parts in huge quantities

The assignment algorithm was developed by a Hungarian mathematician named :-

• Denes Konig and Jeno Egervary
• Kuhn-Munkres
• Ford and Fulkerson
• Carl Gustav Jacobi

Progressing is only a substitute for poor planning.

• True
• False

Finished goods inventory is the amount of manufactured product in stock that is available for sale.

• TRUE
• FALSE

Smoothing performs following activities:-

The assignment method is also called as :-

• Weighted average method
• Heuristics method
• Physical count method
• Hungarian Method

The light engineering company has one special purpose facing ¢ering machine And one copying lathe. The foreman has five workorders for processing . The operation Sequence is fixed [ each job isfirst faced and centered and then copy turned ] . The standard Hoursrequired for each machine to process each work order are shown in thefollowing Table :- Work Order Processing Time [Hours ] Facing ¢ering machine Copying Lathe I 16 40 II 30 60 III 20 6 IV 15 16 V 2512 find sequence to minimize requirements of machine hours.

• IV-I-II-V-III
• II-III-IV-I-V

In precedence diagram the length of arrow has very high degree of significance.

• True
• False

The computerized locked supply system is a variation of the :

• Just-in-time system
• Case cart system
• Par level system
• Demand system

In order to complete a project on time, each critical activity need not be completed in time.

• True
• False

Exponential smoothening is weighted average method.

• True
• False

Some of significant characteristics of fixed order quantity system under replenishment systems are as follows :-

5 jobs are to be processed on machines M1 and M2 , first on M1 and thenon M2. The processing times in hours are as follows.Find the sequencefor 5 jobs that will minimize total elapsed time .also find idle time& total elapsed time. Job Processing time [ hours ] Machine M1Machine M2 1 5 2 2 1 6 8 9 7 6 3 8 5 10 4

Production Planning and Control makes the supervisor ineffective.

• True
• False

The LOB technique is most appropriate for assembly operations involving number of distinct components.

• True
• False

The 'G' group of GOLF analysis covers items procurement from Government suppliers such as :-

In an organization, poor material handling system may result in the following :-

What is EOQ?

• Economics Order Quality
• Economics Output Order
• Economics Order Quantity
• Ergonomics Order Quantity

The make-or-buy decision becomes necessary when the current source ofsupply is not able to supply the material in accordance with buyer'squality requirements.

• True
• False

Just-in-time distribution systems are also known as:

• First in first out
• Stockless distribution system
• Specialty carts
• Centralized exchange systems

The assembly work content [ Wi ] of the i'th station having n work stations is given by :- Correct Answer

• A Wi from i=1 to n
• Wi / n

Which of the following is not an assumption for the EOQ model?

• Only one product is involved
• Annual demand requirement may be unknown
• Demand is spread evenly throughout the year
• Lead time is always constant

To solve "n jobs - 3 machines" sequencing problem, the largest of timeof any job on the second machine must be smaller than or equal to thesmallest time of any job on first machine or third machine.

• True
• False

Among different types of costs associated with inventory, the costs of obtaining purchase approvals are ________.

• purchasing costs
• ordering costs
• stockout costs
• carrying costs

Development of additional vendors/suppliers depends upon :-

• Marketing forecast
• Sales forecast

When shop floor scheduling problem larger than 3 machines arise theanalytical solution procedures leading to optimality are complex anddifficult.

• True
• False

The batch production requires ________ capital investment as compared to job production.

• Low
• High

Material control function embraces a following techniques :-

What factors affect the status of PPC department in the company for achieving informal status?

If set up time for four operations involved is 2 ,1.5, 2 , 2.5 hours respectively, total set up time would be 10 hours.

• True
• False

________items should be excluded from ABC Analysis.

• Seasonal
• Non-moving

In assignment matrix, it is a must to determine Jacobean of the determinant.

• True
• False

The ideal order quantity a company should purchase for its inventory given a cost set of production, demand rate, and other variables is known as:

• Reorder point
• Economic order quantity
• Anticipation stock
• Inventory control

As per a study on materials management practices, a typical firm spendsalmost half of its rupee sales on goods purchased from vendors.

• True
• False

Which area is the first to accept the responsibility for all supplies in the facility

• Receiving
• Requisitioning
• Distribution
• Sterile storage

A company where different personnel give conflicting delivery promises need to improve its scheduling and processing function.

• True
• False

Computerisation of line balancing involve following requirements :-

Proper Production Planning and Control can reduce cost in :-

• Overtime cost
• Procurement cost

They are type of analytical estimate :-

The maximum order level is:

• The amount of inventory that the business should not fall below
• The amount of inventory that the business should not rise above
• The time that it will take for the stock to be delivered to the business
• The maximum amount of stock that the customer is allowed to order

In linear programming method of line balancing, there are three types of constraints namely :-

Rational figure on utilization index can be obtained by carrying out ________ study.

• Work sampling
• Production

The LOB technique is made more accurate and fast by using ________.

• Log-tables
• Computers

Work sampling is ________

• Done continuously without interval
• Done at random interval

Demand distribution systems are :

• Predeterminized
• Computerized
• Labor intensive
• Centralized

Due to the following emergent events, the queue time has to compensatefor the time for which the job has to undergo an extra time :-

At any level of inventory, the total ordering cost and and total carrying cost are always equal.

• TRUE
• FALSE

Which of the following is not a necessary requirement of a requisition

• It must be legible
• It must have the facilitys phone number
• It must specify the quantity needed
• It must specify where items are to be delivered

There are five manufacturing systems. However, many manufacturers combines two or more systems to produce a final product.

• True
• False

If actual demand far exceeds forecast, it will result into :-

Activity R can not start unless activities P & Q are completed .And activity S can not start unless activity Q is over [ I.e. activityP may not be even over ]. Activity R is therefore succedding toactivity P & Q while activity S is succeeding to activity :-

• P
• Q
• R
• S

Standard time accounts for :-

Total lead time is the summation of following factors :-

Curve fitting method of statistical forecasting uses curve line approach.

• True
• False

The inventory of medical and surgical supplies can represent up to what percentage of a facility's operating budget?

• 20%
• 30%
• 40%
• 50%

Important considerations in scheduling are :-

Overlapping of operations helps in compressing manufacturing time.

• True
• False

LOB technique was devised by US army in the year :-

• 1951
• 1952
• 1955
• 1958

Classification of items on basis of their capital lock up is called ________ analysis.

• VED
• XYZ
• ABC
• HML
• MNG/SOS

Production output in night shift is :-

• More than I shift production
• Less than I shift production

While communicating to customer on delays in delivery following information should be given :-

To solve "n jobs - 2 machines" sequencing problem, it is assumed thateach machine can perform only one type of operation and can undertakeonly one job at a time.

• True
• False

The commonly used network techniques other than PERT and CPM are as follows :-

Heuristics approach gave very good results when Wester and Kilbridge applied it to ________ assembly line.

• TV
• Car

If the annual usage of a material is 1200 units and the reorder point is at 120 Units, find the lead time.

• 1 month
• 2 months
• 3 months
• 4 months
• 5 months

DEFINE WEIGHT?

• Predictable yield
• expressed in ounces
• to produce a quantity
• establish consistency

Labour efficiency depends upon ________

• Training
• Experience
• Split up
• Training and experience

Under economic-order-quantity decision model, it is assumed that ________.

• the quantity ordered can vary at each reorder point
• demand, ordering costs, and carrying costs are uncertain
• the purchasing cost per unit is affected by the order quantity
• no inventory stockouts occur

Fluctuation due to changes in season are called cyclical fluctuation.

• True
• False

Keeping procurement cost and carrying cost constant, if annual usage of certain product becomes 4 times, the EOQ would be :-

• Doubled
• Halved

What is the shape of the inventory usage when all EOQ assumptions are met?

Random fluctuation is considered for deciding ________.

• Seasonal fluctuation
• Analytical estimate

A firm has 6 jobs to be processed on three machines A,B and C in theorder ABC. The processing time of each job is given in the tablebelow:- Find the idle time on different machines . Job Processing time[ hours ] Machine A Machine B Machine C J1 25 16 20 J2 26 20 19 J3 2417 18 J4 22 20 21 J5 24 21 17 J6 28 18 13

• 74 , 31 , 58
• 31 , 58 , 60

Ordering of raw material is based on :-

• Marketing forecast
• Sales forecast

The earliest start time of an activity equals to earliest event time of :-

• Head event
• Tail event

The main characteristics of mass and flow production are :-

Responsibility of smooth flow of work through different work centers or departments of company rests with :-

• Material department
• Production control department

Line staff can assist PPC by manufacturing some of their needs in theirown shops rather than making PPC to tool room or purchase.

• True
• False

Time study is useful method of measurement for :-

• Long cycle time operations
• Short cycle time operations

________ analysis mainly helps to identify non-existing items for whichstore keeps bin cards, wastes computer memory or wastes computerstationary while preparing stores ledger.

• MNG Analysis
• SOS Analysis

The ROI of the company can be increased by :-

• Increasing investment/sales ratio
• Increasing profit & decreasing inventory

The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable.

• True
• False

Ordering the optimum quantity of an item based on historical data is known as:

• Reorder point
• Minimum stock quantity
• Maximum stock quantity
• Economical order quantity

Inventory management technique for determining an item’s optimal order size, which is the size that minimizes the total of its order costs and carrying costs.

• economic order quantity model
• two-bin method
• ABC inventory system
• minimization method

Mass & flow production and process production are categorized under :-

• Continuous production
• Random production

An ongoing inventory management system is known as a:

• Perpetual inventory system
• Manual inventory system
• Total inventory system
• Computerized inventory system

Detachable Card contain following information :-

Which distribution system requires the using department to be responsible for maintaining inventory levels?

• Fixed inventory levels
• Centralized exchange systems
• Demand distribution
• Total inventory control

Process plan is the process of establishing the ________ and mosteconomical path that each part is to follow from raw material stage tofinished product stage.

• Optimum
• Shortest

Price orientation

• HML Analysis
• SDE Analysis
• ABC analysis
• XYZ analysis
• VED Analysis

________ are grouped so that their total time is preferably equal to or little lesser than the time available each work station.

• Tasks
• Assembly lines

Weaknesses of PPC department can be studied on following grounds :-

Bar-coding of an instrument sets and integral part of:

• Case carts systems
• Exchange cart systems
• Tracking systems
• Just-in-time systems

Long termed forecasts are for the period of :-

• One year
• Two year
• 3 to 5 years
• 5 to 10 years

Total inventory cost =

• carrying cost
• ordering cost
• carrying cost + ordering cost
• carrying cost - ordering cost

Find EOQ in Rs from the following data :-Annual consumption = 20, 000units, Ordering and receiving cost of material = Rs 20 per order,Annual carrying cost or storage cost = 10% of unit cost of material,Cost of material = Rs 50.

• 10000
• 20000

A simple but labor intensive system is the:

• Par-level
• Exchange-cart
• Just in time
• Demand

WHAT U HAVE TO UNDERSTAND PORTION COST?

• CALCULATED PORTION, PLANNED PORTION
• STANDARD RECEPI
• INVENTORY CONTROL
• PREDICTABLE YIELD

Keeping available time per day constant, if the desired production rateper day is to be doubled ,cycle time will be reduced by :-

• 0.2
• 0.75
• 0.5
• 1.0

Sequencing helps management to determine the most economical job sequence the one that consumes minimum :-

• Elapsed time
• Lead time

In a mass production assembly shop following work measurement techniques are used :-

Inspection operations is a part of process plan for a part.

• True
• False

The following are salient features of the fixed order quantity system :-

Given the following data :- procurement cost per order = Rs 30 ;frequency of ordering per year =4 ; number of suppliers = 3 . Form theabove data, total procurement cost would be Rs ________.

• 40
• 360
• 320
• 300

PERT is suitable in defense projects and R&D where activity times can not be really predicted.

• True
• False

Which of the following is not considered a specialty cart?

• Disaster
• Exchange
• Dialysis
• Code

Being capable to adjust their production facilities shortly just afterchange in demand for products and without incurring heavy expenses,greater flexibility in production is provided by ________.

• Continuous production
• Job & batch production

The data in respect of spindle nose pertains to :-

• Tooling
• Raw material data

Which of the following formula is used to compute the annual carrying cost?

• EOQ * holding cost
• Average Inventory * carrying cost
• Annual demand * holding cost
• Annual demand * ordering cost

Purchase department must keep PPC informed regarding lead time of different items specially where lead times are extended.

• True
• False

WHAT A FORMULA PORTION SIZE?

• quantity x yield percentage (number of portion)

Stores issue order for an item is prepared as soon as the route sheet is ready.

• True
• False

Job production requires ________ capital investment.

• Low
• High
• Lowest
• Highest

Which type of inventory distribution system requires the use of a predetermined inventory list?

• Demand
• Par level
• Exchange cart
• Just-in-time

The administrative lead time e.g. time involved in processing theorder, which may be in periodical review system including the perioduntil next review is called ________ lead time.

• Internal
• Cumulative

Identify the costs and risks of OVERstocking:

To keep facilities busy, waiting time due to non-availability of work should be kept at :-

• Maximum
• Minimum

Methods for recording actual progress of work for shop orders are :-

The expected time can be minimised by minimising following parameters :-

One of the causes of inability to meet delivery date originally promised :-

• Lack of availability of material in time
• Lack of availability of supervisor in time
• Lack of staff in shift
• Load balancing not done properly

Because of uncertainty of activity timings, PERT acquired a shape of ________ model.

• Probabilistic
• Realistic

If number of work stations is 8 and work content of all stations is 32 , the cycle time would be ________.

• 1
• 2
• 4
• 6
• 8

How much Portion of a given menu item

• 3
• 10
• 4
• 7

The purchase-order lead time is the ________.

• time between placing an order and its delivery
• time between receiving a customer order and producing the products
• time between receiving a customer order and delivering the items
• time required to correct errors in the defective products

WHAT A ADVANTAGE STANDARDIZE YIELD?

• ERROR
• yield percentages and weight to volume
• yields are not as accurate as in house calculation
• yields do not take into consideration standard purchase specifications

Par levels should be based on:

• Actual use
• Weekly average
• Monthly average
• Budget

Lead time is ________ for different items.

• Same
• Different

Labour efficiency factor is applied after capacity requirement of equipment is calculated.

• True
• False