Inventory Production Control

Installed capacity :-

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

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

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

• True
• False

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

• VED
• XYZ
• ABC
• HML
• MNG/SOS

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

• Head event
• Tail event

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

• TRUE
• FALSE

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

• Work sampling
• Production

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

Computerisation of line balancing involve following requirements :-

Demand distribution systems are :

• Predeterminized
• Computerized
• Labor intensive
• Centralized

Detachable Card contain following information :-

Total lead time is the summation of following factors :-

Detachable ticket, after filling in required information is :-

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

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

The computerized locked supply system is a variation of the :

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

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

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

• Unfinished goods
• Finished goods

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 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

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

• True
• False

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

• True
• False

Following difficulties are faced by SDE analysis :-

Production Planning and Control makes the supervisor ineffective.

• True
• False

Transportation carts should be claned at least

• Daily
• Weekly
• Monthly
• Hourly

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

Total inventory cost =

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

The most efficient distribution system is the:

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

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

• Costlier
• New

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

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

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

• TRUE
• FALSE

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

Process Sheet contains following information :-

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

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

• True
• False

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

• True
• False

Fluctuation due to changes in season are called cyclical fluctuation.

• True
• False

Development of additional vendors/suppliers depends upon :-

• Marketing forecast
• Sales forecast

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

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

Stock of finished goods are based on :-

• Marketing forecast
• Sales forecast

They are type of analytical estimate :-

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

• True
• False

Lead time is ________ for different items.

• Same
• Different

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

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

• True
• False

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

CONCLUSION CHAPTER 7?

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

Important considerations in scheduling are :-

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

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

• True
• False

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

• 1951
• 1952
• 1955
• 1958

Effective capacity per period is calculated as :-

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

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

• Doubled
• Halved

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

Par levels should be based on:

• Actual use
• Weekly average
• Monthly average
• Budget

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

Short term forecasts are for ________.

• Material Planning
• Sales forecasting

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

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

• Shortest
• Longest

WHAT A COUNT TO USED BY FOODSERVICE?

• PORTION SIZE
• DESIRE
• CONTROL BUDGET
• INVENTORY CONTROL

Steps involved in process planning include the following :-

The Heuristics approach has a base of binary number theory.

• True
• False

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

How much Portion of a given menu item

• 3
• 10
• 4
• 7

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

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

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

An ongoing inventory management system is known as a:

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

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

• True
• False

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

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 progress card normally contains ________ squares.

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

Identify the costs and risks of OVERstocking:

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

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

• Fabrication line
• Assembly line

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

Exponential smoothening is weighted average method.

• True
• False

Standard time accounts for :-

The reorder point is the:

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

Time study is useful method of measurement for :-

• Long cycle time operations
• Short cycle time operations

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

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

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

• 20%
• 30%
• 40%
• 50%

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

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

Production output in night shift is :-

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

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

• True
• False

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

In CPM, use of dummy activities is much essential .

• True
• False

Curve fitting method of statistical forecasting uses curve line approach.

• True
• False

Generally for ________ flow system, Heuristic method is preferred.

• Intermittent
• Continuous

DEFINE WEIGHT?

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

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

Long termed forecasts are for the period of :-

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

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

• More
• Less

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

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

Material control function embraces a following techniques :-

An effective case cart system requires:

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

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

• True
• False

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

• True
• False

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

• True
• False

Job production requires ________ capital investment.

• Low
• High
• Lowest
• Highest

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

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

• Time study
• Production study

Proper Production Planning and Control can reduce cost in :-

• Overtime cost
• Procurement cost

Subsidiary orders include :-

________items should be excluded from ABC Analysis.

• Seasonal
• Non-moving

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

DISADVANTAGE OF STANDARDIZED RECEPI

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

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

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

The software for CPA would require the following parameters:-

C type items would never be vital under VED analysis.

• True
• False

Progressing is only a substitute for poor planning.

• True
• False

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

• Good
• Poor
• Fair
• Bad

Increase in inventory carrying cost increases EOQ.

• True
• False

Smoothing performs following activities:-

________ 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

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

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

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

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

• Expanded
• Commonised

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

• Lead time
• Manufacturing time

Negative value of critical ratio :-

• Indicates shortfall in scheduled delivery period
• Is meaningless

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

The assignment method is also called as :-

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

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

• Elapsed time
• Lead time

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

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

• Material department
• Production control department

WHAT U HAVE TO UNDERSTAND PORTION COST?

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

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

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

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

• Tasks
• Assembly lines

The ROI of the company can be increased by :-

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

What is EOQ?

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

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

• Purchasing
• Receiving
• Storage
• Patient charging

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

Moving average method lags behind the latest trend.

• True
• False

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

• True
• False

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

The main characteristics of mass and flow production are :-

As the quantity increases, the procurement cost :-

• Reduces
• Increases

PERT terminology uses words like :-

HML Analysis helps to :-

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

• Medium
• Minimum

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

• Maximum
• Minimum

YIELD IN CULINARY TERMS REFERS?

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

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

• True
• False

Price orientation

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

Supplies should never be stored

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

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

• True
• False

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

• Receiving
• Requisitioning
• Distribution
• Sterile storage

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

• True
• False

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

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

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

• Log-tables
• Computers

In ABC analysis, the classification is based on :-

• Carrying cost
• Cumulative cost

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

• 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%

Random fluctuation is addition of cyclical fluctuation and seasonal fluctuation.

• True
• False

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

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

Ordering of raw material is based on :-

• Marketing forecast
• Sales forecast

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

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

Overlapping of operations helps in compressing manufacturing time.

• True
• False

The data in respect of spindle nose pertains to :-

• Tooling
• Raw material data

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

• Practical
• Customer

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

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

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

• TV
• Car

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

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

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

• Delivery failure
• Disturbed scheduling

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

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

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

• True
• False

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

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

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.

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

• Low
• High

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

Work sampling is ________

• Done continuously without interval
• Done at random interval

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

• True
• False

The two basic questions in inventory management are

• how much to order and when to order

Scheduling can be considered as a process of :-

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

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

• Fixed rates
• Competitive rates

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

A simple but labor intensive system is the:

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

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

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

• Probabilistic
• Realistic

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

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

• Continuous production
• Random production

Buying for C quantities should be made in ________ quantities .

• Small
• Large

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

A type items are always vital under VED analysis.

• True
• False

Forecasting is function of ________.

• Chief Executive officer
• Marketing department

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

• TRUE
• FALSE

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

• Decreases
• Increases

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

• True
• False

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

Which of the following is not considered a specialty cart?

• Disaster
• Exchange
• Dialysis
• Code

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

• True
• False

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

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

Random fluctuation is considered for deciding ________.

• Seasonal fluctuation
• Analytical estimate

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

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

• True
• False

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

• True
• False

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

• Outside operations cost
• Outdoor cost

Work measurement is responsibility of :-

Labour efficiency depends upon ________

• Training
• Experience
• Split up
• Training and experience

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

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

WHAT A FORMULA PORTION SIZE?

• quantity x yield percentage (number of portion)