Cpim Certification Exam

137 Questions

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IT Certification Quizzes & Trivia

A compilation of the practice questions from the cd and the practice questions in the book and maybe even some vocab.


Questions and Answers
  • 1. 
    Which of the following is generally a characteristic of a product focused layout?
    • A. 

      Large queues @ workstations

    • B. 

      Fixed Flow of work

    • C. 

      Production to a work order

    • D. 

      General purpose workstations

  • 2. 
    Which of the following is generally a function of the physical distribution system?
    • A. 

      Production Activity control

    • B. 

      Production Planning

    • C. 

      Packaging

    • D. 

      Bill of material

  • 3. 
    A forecast is typically more accurate for
    • A. 

      Groups of items rather than for individual items

    • B. 

      Daily rather than monthly periods of time

    • C. 

      Physical Units rather than monetary units

    • D. 

      Far out in the future rather than nearer time periods

  • 4. 
    Which of the following is most likely to be a dependent demand item?
    • A. 

      A Manufactured subassembly

    • B. 

      An item in a grocery store

    • C. 

      A service part

    • D. 

      An office supply item

  • 5. 
    A lean production 5S System is designed to:
    • A. 

      Recycle

    • B. 

      Discover defects

    • C. 

      Identify work method deviations

    • D. 

      Create a visual workplace

  • 6. 
    The setup time for an operation is two hours and the run time is 10 minutes per piece. The scheduled operation time for 100 units is
    • A. 

      130 minutes

    • B. 

      1000 minutes

    • C. 

      1100 minutes

    • D. 

      1120 minutes

  • 7. 
    Material requirements planning (MRP) schedules a planned order receipt when
    • A. 

      A gross requirement exists

    • B. 

      A net requirement exists

    • C. 

      An exception is generated

    • D. 

      Safety stock is zero

  • 8. 
    A purpose of holding extra inventory is to
    • A. 

      Allow production to select what to run

    • B. 

      Minimize the bill of material levels

    • C. 

      Reduce the number of purchased items

    • D. 

      Buffer production from demand variation

  • 9. 
    Which of the following provide a buffer for seasonal demand?
    • A. 

      Lot-size inventory

    • B. 

      Fluctuation inventory

    • C. 

      Anticipation inventory

    • D. 

      Decoupling inventory

  • 10. 
    Owner's equity is 
    • A. 

      Revenue less liabilities

    • B. 

      Revenue less expenses

    • C. 

      Assets less liabilities

    • D. 

      Assets less expenses

  • 11. 
    Sales = 16 millCOGS= 10 millGenearl admin expenses= 4millAvg Inventory=2.5 millInv turnover ratio is:
    • A. 

      1.5

    • B. 

      1.6

    • C. 

      4.0

    • D. 

      6.4

  • 12. 
    An item has a lead time of six weeks and an average demand of 150 units per week. The safety stock for the item is 300 units and the order quantity is 2,000 units. the order point for the item is.
    • A. 

      300 un

    • B. 

      900

    • C. 

      1,200

    • D. 

      2,000

  • 13. 
    In a decentralized distribution system, the role of the central supply organization is to
    • A. 

      Determine when to replenish stock at the distribution centers

    • B. 

      Respond to demands from the distribution centers

    • C. 

      Coordinate communications among distribution centers

    • D. 

      Forecast demand at each distribution center.

  • 14. 
    The primary purpose of a cycle count program is to
    • A. 

      Correct inventory errors

    • B. 

      Result in fewer counts per year

    • C. 

      Require less skilled counters

    • D. 

      Identify causes of inventory errors

  • 15. 
    In the Toyota Production System, which of the following concepts was key to breaking down the silos that cripple an organization?--- is this on?!?
    • A. 

      The cross functional structure mix

    • B. 

      Cross-functional training

    • C. 

      The control department concept

    • D. 

      Kanban

  • 16. 
    • A. 

      A separate planning department comprised of forecasting and marketing experts continually assesses and reassesses marketing trends to respond effectively to new customers' needs

    • B. 

      Significant data is collected and mined to determine trends and how to respond as a company to results of econometrics models

    • C. 

      An extension of MBO, which focuses on objectives and process, long- and short-term plan-do-check-act cycles, consensus building and alignment, catch ball, and people focus.

    • D. 

      ERP and supply chain software collects the data for analysis, the planning dept. analyzes the data, top management analyze the results and develop a plan, which is reviewed by key workers.

  • 17. 
    Which of the following statements is correct?
    • A. 

      The lot size affects the product mix cycle

    • B. 

      The stock out ratio frequently depends on the lot size quantity

    • C. 

      The lot size should always be equal to one

    • D. 

      The EOQ is the best method to calculate lot size

  • 18. 
    A primary advantage of electronic data interchange (EDI) with suppliers is that it
    • A. 

      Reduces paperwork

    • B. 

      Bypasses the buyer

    • C. 

      Employs the latest technology

    • D. 

      Supports unlimited forms of communications

  • 19. 
    In most cases, the fastest way to increase capacity to meet a short-term requirement is to
    • A. 

      Hire addtl workers

    • B. 

      Use overtime

    • C. 

      Acquire more equipment

    • D. 

      Subcontract work

  • 20. 
    The demand at a workstation in a lean system typically comes from
    • A. 

      A pull signal

    • B. 

      A dispatch list

    • C. 

      The production plan

    • D. 

      A control chart

  • 21. 
    Which of the following best describes a Kanban system?
    • A. 

      A quality conrol system

    • B. 

      Push production

    • C. 

      Requires Operator flexibility

    • D. 

      Visual Reorder point

  • 22. 
    The master production schedule (MPS) is
    • A. 

      An anticipated build schedule

    • B. 

      An input to the production plan

    • C. 

      A statement of forecast demand

    • D. 

      Driven by material requirements planning

  • 23. 
    The balance sheet for a firm shows which of the following?
    • A. 

      Profit or loss for the period

    • B. 

      Sources and uses of funds

    • C. 

      Long- and short-term debt

    • D. 

      Cost of products sold

  • 24. 
    Which of the following is an advantage of a decentralized distribution center?
    • A. 

      Easy coordination between distribution centers

    • B. 

      Does not react quickly to local demand

    • C. 

      Reduce coordination and communication expenses

    • D. 

      Reduce the system safety stock

  • 25. 
    Which of the following costs are associated with variable transportation cost?
    • A. 

      Pickup and delivery

    • B. 

      Terminal handling

    • C. 

      Line haul costs

    • D. 

      Billing costs

  • 26. 
    Which of the following is the most likely impact of doubling the ordering costs for an item
    • A. 

      The order quantity will increase

    • B. 

      The order point will increase

    • C. 

      The order quantity will decrease

    • D. 

      The order point will decrease

  • 27. 
    Work in process inventory serves to decouple which of the following?
    • A. 

      Production from suppliers

    • B. 

      Finished good inventory from customer demand

    • C. 

      An operation from succeeding operations

    • D. 

      Production distribution channels

  • 28. 
    Which of the following defines the sequence of operations to be performed to manufacture a part?
    • A. 

      Item master

    • B. 

      Bill of material

    • C. 

      Routing

    • D. 

      Shop calendar

  • 29. 
    Which of the following is used to manage queues and lead times?
    • A. 

      Forward scheduling

    • B. 

      Rough-cut capacity planning

    • C. 

      Material requirements planning

    • D. 

      Input/output control

  • 30. 
    Which of the following is used to rank the frequency of problems?
    • A. 

      Pareto analysis

    • B. 

      Cause-and-effect diagram

    • C. 

      Process flow diagram

    • D. 

      Root Cause analysis

  • 31. 
    Driver costs usually appear as what type of transportation costs?
    • A. 

      Fixed transportation cost

    • B. 

      Burdened into line haul cost

    • C. 

      Variable transportation cost

    • D. 

      Expensed as a portion of terminal cost

  • 32. 
    Which of the following is used to determine the feasibility of material requirements plan?
    • A. 

      Resource requirements planning

    • B. 

      Rough-cut capacity planning

    • C. 

      Capacity requirements planning

    • D. 

      Work center capacity control

  • 33. 
    Which of the following combinations is best suited for developing customer promise dates in the make-to-order environment?
    • A. 

      Forward scheduling and infinite loading

    • B. 

      Forward scheduling and finite loading

    • C. 

      Backward scheduling and infinite loading

    • D. 

      Backward scheduling and finite loading

  • 34. 
    Which of the following is a benefit to the supplier of a long-term customer-supplier relationship?
    • A. 

      An improved ability to plan

    • B. 

      Improved product quality

    • C. 

      More frequent shipments

    • D. 

      Reduced transportation costs

  • 35. 
    Manufacturing has a primary responsibility for which of the following dimensions of quality? ON THE TEST????
    • A. 

      Product performance

    • B. 

      Aesthetics

    • C. 

      Conformance

    • D. 

      Aftermarket service

  • 36. 
    Which of the following is an advantage of point-of-use inventory over central storage?---DID WE LEARN POINT OF USE???
    • A. 

      The ease of control

    • B. 

      Reduced material handling

    • C. 

      The ease of maintaining inventory records

    • D. 

      Reduced safety stock

  • 37. 
    The line-haul costs vary directly with which of the following
    • A. 

      The weight shipped

    • B. 

      The distance shipped

    • C. 

      Carrier used

    • D. 

      The degree of hazard associated with the product shipped

  • 38. 
    Total employee involvement will result in an increase in which of the following roles for first-line supervision?--- MAYBE?
    • A. 

      Controlling

    • B. 

      Coaching

    • C. 

      Disciplining

    • D. 

      Reporting

  • 39. 
    Which of the following is typically characterized as an element of the supply chain?
    • A. 

      Finance

    • B. 

      Distribution

    • C. 

      Quality control

    • D. 

      Engineering

  • 40. 
    Which of the following groups should be the first to receive education on six-sigma concepts?
    • A. 

      Senior Management

    • B. 

      Quality inspectors

    • C. 

      Production operators

    • D. 

      Production supervision

  • 41. 
    Which of the following would most likely serve as an effective measure of supplier performance?
    • A. 

      Component price

    • B. 

      Internal Scrap rate

    • C. 

      Transportation mode

    • D. 

      Delivery Time

  • 42. 
    In projecting demand for a standard design commodity, which of the following factors is typically most important?
    • A. 

      Post-sales service

    • B. 

      Product features

    • C. 

      Competitive pricing

    • D. 

      Quality controls

  • 43. 
    Providing customers with what they want at low cost describes the relationship between which of the following
    • A. 

      Quality management and lean

    • B. 

      Quality management and production planning

    • C. 

      ERP and lean

    • D. 

      Quality management and CRP

  • 44. 
    Which of the following is a good measure of customer focus?
    • A. 

      High organizational turnover

    • B. 

      High quality levels

    • C. 

      Many performance measures

    • D. 

      Many supplier contracts

  • 45. 
    Which of the following is a major consideration when selecting a supplier?
    • A. 

      Supplier employee benefits

    • B. 

      Supplier forecast accuracy

    • C. 

      Supplier manufacturing reliability

    • D. 

      Supplier pre-sales marketing success

  • 46. 
    Which of the following is typically the largest element of physical distribution costs?
    • A. 

      Order processing

    • B. 

      Material handling

    • C. 

      Transportation

    • D. 

      Protective packaging

  • 47. 
    Why is manufacturing important to the economy?
    • A. 

      It adds value to products to generate wealth.

    • B. 

      B. It uses natural resources and prevents waste.

    • C. 

      It decreases employment and generates wealth.

    • D. 

      It prevents waste and decreases employment.

  • 48. 
    In a traditional manufacturing environment, which of the following objectives are in conflict?
    • A. 

      Maximizing customer service and increasing inventory investment

    • B. 

      Minimizing production costs and increasing inventory investment

    • C. 

      Minimizing production costs and decreasing inventory investment

    • D. 

      Minimizing customer service and decreasing inventory investment

  • 49. 
    • A. 

      The objectives of marketing and production can be met with higher inventories.

    • B. 

      The objectives of marketing and finance can be met with higher inventories.

    • C. 

      The objectives of marketing and production can be met with lower inventories.

    • D. 

      The objectives of marketing and finance can be met with lower inventories.

  • 50. 
    Which of the following production environments (manufacturing strategies) produces the longest delivery lead time?
    • A. 

      Make-to-order

    • B. 

      Assemble-to-order

    • C. 

      Make-to-stock

    • D. 

      Continuous manufacturing

  • 51. 
    Which of the following is a major objective of materials management?
    • A. 

      Provide sufficient equitable employment.

    • B. 

      Provide the required level of customer service.

    • C. 

      Support cost accounting by decreasing inventory turns.

    • D. 

      Provide cost information for management decisions.

  • 52. 
    Which of the following are primary activities of manufacturing planning and control?
    • A. 

      Inventory management and cost information

    • B. 

      Sales support and cost information

    • C. 

      Production planning and inventory management

    • D. 

      Sales support, implementation, and control

  • 53. 
    Which of the following is the performance measure that relates to daily work routines, such as cycle time and utilization?
    • A. 

      Tactical

    • B. 

      Strategic

    • C. 

      Operational

    • D. 

      Reliability

  • 54. 
    Which of the following systems is unique in its focus on the reduction of defects by reducing variation?
    • A. 

      Lean/JIT

    • B. 

      Six sigma

    • C. 

      ERP systems

    • D. 

      Theory of contraints

  • 55. 
    Which of the following statements is true about the product layout (continuous process)?
    • A. 

      Workstations are located according to the type of machinery.

    • B. 

      Workflow is lumpy

    • C. 

      A wide variety of different products can be produced.

    • D. 

      There is little buildup of work-in-process inventory.

  • 56. 
    Which of the following statements is true regarding process layout (intermittent manufacturing)?
    • A. 

      Capital costs are generally higher than for product layout.

    • B. 

      Special-purpose machinery is used

    • C. 

      Each workstation must be flexible.

    • D. 

      There is little buildup of work-in-process inventory

  • 57. 
    Which of the following is a characteristic of demand?
    • A. 

      Mean absolute variation

    • B. 

      Seasonal variation

    • C. 

      Average variation

    • D. 

      Standard Deviation

  • 58. 
    Product A is made from components B and C. Component B is made from parts D and E. Which items should be forecast?
    • A. 

      Only A

    • B. 

      A B and C

    • C. 

      D and E

    • D. 

      B C D and E

  • 59. 
    Which of the following is the best statement about the general principles of forecasting?
    • A. 

      Forecasts are more accurate for individual items than for groups of items.

    • B. 

      Forecasts are more accurate for distant periods of time.

    • C. 

      Every forecast should include an estimate of error.

    • D. 

      Forecasts are usually accurate.

  • 60. 
    What important assumption is made about quantitative forecasting methods? a. b. c. d.
    • A. 

      The past is a valid indicator of the future.

    • B. 

      Demand trend is seldom linear.

    • C. 

      Seasonal variations are small.

    • D. 

      Random variations are small.

  • 61. 
    Which forecasting technique takes the average demand for some past number of periods? a. b. c. d.
    • A. 

      Trend time average

    • B. 

      Moving average

    • C. 

      Demand smoothing

    • D. 

      Qualitative analysis

  • 62. 
    Why is it important to monitor the forecast?
    • A. 

      To compare the actual sales with the forecast

    • B. 

      To improve our forecasting methods

    • C. 

      To utilize actual sales data

    • D. 

      To satisfy marketing’s need to know

  • 63. 
    Which of the following statements is most accurate?
    • A. 

      Demand fluctuations that depend on the time of the year, week, or day are called trend.

    • B. 

      The seasonal index is an estimate of how much the demand during the season will be above or below the average demand.

    • C. 

      Seasonality always occurs in summer, winter, spring, and fall.

    • D. 

      Random variation is constant from period to period.

  • 64. 
    Which of the following causes forecast error?
    • A. 

      Random variation from the average demand

    • B. 

      Errors in monitoring the forecast

    • C. 

      Differences in lead times

    • D. 

      Differences between sales and demand

  • 65. 
    Which of the following statements is most accurate?
    • A. 

      Independent demand items should be forecast.

    • B. 

      A forecast for sales next year will not be as accurate as a forecast for a year from now.

    • C. 

      Forecasts for families of products should be built up from individual product forecasts.

    • D. 

      Forecasts are almost always accurate.

  • 66. 
    Which of the following statements is most accurate?
    • A. 

      If we wish to forecast demand, past sales must be used for the forecast.

    • B. 

      Forecasts made in dollars for total sales should be used by manufacturing.

    • C. 

      Forecasts should be made for individual items in a group.

    • D. 

      The circumstances relating to demand data should be recorded.

  • 67. 
    Which basic production planning strategy will build inventory and avoid the costs ofexcess capacity?
    • A. 

      Chase strategy

    • B. 

      Level production strategy

    • C. 

      Cycle Counting strategy

    • D. 

      Demand matching strategy

  • 68. 
    For the purposes of production planning, product families should be established on thebasis of
    • A. 

      Market segments

    • B. 

      Similarity of manufacturing process

    • C. 

      The availability of materials

    • D. 

      The availability of machinery

  • 69. 
    If the opening inventory is 100 units, sales are 500 units, and the ending inventory is200 units, what will manufacturing produce?
    • A. 

      300

    • B. 

      400

    • C. 

      500

    • D. 

      600

  • 70. 
    Under which of the following circumstances will firms generally make-to-stock?
    • A. 

      Demand is unpredictable

    • B. 

      Many product options exist

    • C. 

      Required delivery times are shorter than the time needed to make the product

    • D. 

      Customers require special engineering

  • 71. 
    The information needed to develop a master schedule will come from which of thefollowing?
    • A. 

      The capacity requirements plan

    • B. 

      The forecast of individual end items

    • C. 

      Production activity control

    • D. 

      The material requirements plan

  • 72. 
    Which of the following is a characteristic of the MPS?
    • A. 

      It facilitates forecasting

    • B. 

      It works with families of products

    • C. 

      It is an agreed-upon plan between production and marketing/sales

    • D. 

      It cannot be used for order promising

  • 73. 
    Which of the following is an objective of an MPS? MASTER PRODUCTION SCHEDULEa. To maximize utilization of equipmentb. To keep the sales department happyc. To maintain the desired level of customer serviced. To minimize inventory investment
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 74. 
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 75. 
    What is the portion of inventory or production that is not committed to customerorders called?a. Free stockb. Available-to-promisec. Excess productiond. Waste
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 76. 
    Which of the following is true about time fences in a master schedule system?a. Changes far out in the planning horizon can be made with little or no cost tomanufacturingb. In the “frozen zone,” capacity and materials can easily be committed to new ordersc. Changes in the near future on the planning horizon are less costly to make thanchanges in the distant futured. The master planner should be authorized to make changes in the frozen zone
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 77. 
    Which of the following is an objective of material requirements planning?a. Keep the factory busyb. Keep priorities currentc. Determine the forecastd. Minimize inventory investment
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 78. 
    What is the name of the set of priority planning techniques for planning componentitems below the end-item level?a. Master schedulingb. Material requirements planningc. Capacity planningd. Production control
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 79. 
    Which of the following is a major input to an MRP system?a. The production planb. The capacity planc. Shop floor activity planning and controld. The master production schedule
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 80. 
    What is the name of the document that shows the component parts and the number ofparts needed to make one of an assembly or subassembly?a. A route sheetb. A material requirements planc. A bill of materiald. A material requisition
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 81. 
    Which of the following statements is true?a. The same part number can be used to identify similar products.b. A part has one, and only one, part number.c. The same part on different bills of material will have a different number.d. An item can be either a parent or a component, but not both.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 82. 
    What is the term for the ability to relate the demand for an item shown on an MRPrecord back to the parent causing the demand?a. Where-usedb. Relatingc. Peggingd. Item planning
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 83. 
    Which statement is correct?a. Planned order receipts show when the order is needed.b. When an order is released, it becomes a planned order.c. Scheduled receipts show when goods were put into inventory.d. Gross requirements come from the planned order receipt of the parent.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 84. 
    A work center consists of 2 machines working 8 hours a day and 5 days a week.Historically, utilization has been 80%, and efficiency has been 90%. To the nearesthour, what is the rated capacity?a. 80 hoursb. 58 hoursc. 40 hoursd. 30 hours
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 85. 
    What term indicates the percentage of time the work center is active compared to theavailable time?a. Efficiencyb. Effectivenessc. Utilizationd. Uptime
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 86. 
    What term is used for the ratio of standard hours of work produced to hours actuallyworked?a. Efficiencyb. Effectivenessc. Utilizationd. Uptime
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 87. 
    What term is used for calculating (available time) × (utilization) × (efficiency)?a. Effectivenessb. Useful capacityc. Demonstrated capacityd. Rated capacity
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 88. 
    Which of the following shows the capacity required at each work center based onplanned and released orders for each time period of the plan?a. Work center profileb. Load profilec. Scheduled order profiled. Work-to-be-done report
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 89. 
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 90. 
    Which of the following is concerned with very short-term detailed planning of theflow of orders through manufacturing?a. Production planningb. Master production schedulingc. Material requirements planningd. Production activity control
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 91. 
    Which of the following is an element of manufacturing lead time?a. Design timeb. Delivery lead timec. Wait timed. Purchase lead time
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 92. 
    What is the name given to a scheduling system in which the last operation on a routingis scheduled first and for completion on the due date?a. Forward schedulingb. Backward schedulingc. Infinite schedulingd. Finite scheduling
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 93. 
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 94. 
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 95. 
    What is the name of materials used in the production process that do not become partof the product?a. Raw materialsb. Work in processc. Finished goodsd. Maintenance, repair, and operating supplies
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 96. 
    What is the name given to inventories of items that are purchased or manufactured inquantities greater than needed immediately?a. Fluctuation inventoryb. Lot-size inventoryc. Transportation inventoryd. Scheduled receipts
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 97. 
    Which of the following company objectives are in conflict?a. Maximum customer service and low-cost plant operationb. Low-cost plant operation and cash flowc. Maximum inventory investment and customer serviced. Cash flow and profitability
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 98. 
    Which of the following costs will increase if order quantity is increased?a. Annual cost of carrying inventoryb. Cost of orderingc. Cost of manufacturing operationsd. Cost of customer service
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 99. 
    Which of the following are costs of carrying inventory?a. Capital costs and production control costsb. Capital costs and storage costsc. Production control costs and purchase costsd. Storage costs and purchasing costs
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 100. 
    Which of the following are considered ordering costs?a. Production control costsb. Capital costsc. Risk costsd. Obsolescence costs
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 101. 
    Which of the following equations is correct?a. Assets = liabilities – owner’s equityb. Income = revenue – liabilitiesc. Owner’s equity = assets – liabilitiesd. Revenue = cost of goods sold – general and administrative expenses
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 102. 
    If the annual cost of goods sold is $10 million and the average inventory is $2.5million, what is the inventory turnover ratio?a. $7.5 millionb. .25c. 2.5d. 4
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 103. 
    Which of the following costs is relevant to inventory management decisions?a. Run costsb. Storage costsc. Marketing costsd. New product development costs
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 104. 
    Which of the following statements best describes stockkeeping units?a. Sodas in a 6-pack and 12-pack are the same SKU because the cans are the sameSKU.b. White shirts of different sizes but in the same size box are the same SKU.c. Wires of different gauges that are stocked in reels are the same SKU.d. Two white shirts in the same inventory but of different sizes or styles would bedifferent SKUs.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 105. 
    If the order quantity is increased, which of the following occurs?a. The cost of carrying inventory decreases, and the cost of ordering increases.b. The cost of carrying inventory increases, and the cost of ordering decreases.c. The cost of carrying inventory increases, and the cost of ordering increases.d. The cost of carrying inventory decreases, and the cost of ordering decreases.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 106. 
    In developing the standard economic order quantity (EOQ) formula, which of thefollowing assumptions are made?a. Demand for the item is relatively uniform.b. Replenishment is in lots or batches that arrive all at once.c. Ordering and carrying costs are constant and known.d. All the above are assumed.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 107. 
    Which of the following statements is best?a. Order point = DDLT + SSb. Average inventory = (Q + SS)/ 2c. Safety stock is always needed.d. Safety stock = order point + order quantity
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 108. 
    Safety stock will depend on which of the following?a. Variability of demandb. Cost of carrying inventoryc. Cost of placing an orderd. Product obsolescence
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 109. 
    Which of the following statements is most accurate?a. About 20% of the items will usually account for about 80% of the total value.b. A items should have the loosest possible control.c. The general rule for using the ABC approach is to have plenty of everything instock.d. C items account for about 50% of the total value.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 110. 
    Which of the following statements is best?a. A items usually account for about 50% of the total usage.b. About 50% of the items usually account for 5% of the value.c. C items should be given top priority in inventory management.d. All inventory items should be managed in the same way.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 111. 
    What type of inventory record system keeps a continuous account of transactions asthey occur?a. Perpetual inventory systemb. Periodic inventory systemc. Two-bin systemd. Safety stock system
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 112. 
    If the lead time is one week, the review period one week, the average demand 100units per week, and the safety stock 50 units, the target level will be:a. 150 unitsb. 200 unitsc. 250 unitsd. 300 units
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 113. 
    Which of the following is an advantage of cycle counting?a. Timely detection and correction of problemsb. Reduction of direct labor costsc. Use of spare labord. Replenishment of inventory
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 114. 
    Which of the following is an objective of purchasing?a. To keep many sources of supply available to ensure competitive pricingb. To control budgetary expenditures of all employees through sound purchase ordercontrolc. To obtain goods and services of the required quality and right costd. To ensure that goods are always purchased at the lowest price
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 115. 
    In a purchasing system, which of the following originates with the department orperson who will be the ultimate user?a. A purchase requisitionb. A purchase orderc. Vendor selectiond. A request for quotation
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 116. 
    Which type of sourcing is set up when a product is unique and available from only onesource?a. Single sourcingb. Sole sourcingc. Multiple sourcingd. Double sourcing
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 117. 
    Which of the following is the next step in the purchasing cycle after a requisition isgenerated?a. Follow upb. Approve paymentc. Receive goodsd. Issue purchase order
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 118. 
    Which of the following categories of a supplier agreement covers specifications,allowable defects, and grade?a. Priceb. Termc. Qualityd. Quantity
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 119. 
    Which of the following is a major objective of distribution inventory management?a. To provide the required level of customer serviceb. To minimize the costs of warehouse spacec. To always have enough of everything on hand so there are no stockoutsd. To minimize labor costs
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 120. 
    Which of the following is not considered a function of physical distribution?a. Transportationb. Production controlc. Distribution inventoryd. Warehousing
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 121. 
    Which of the following four Ps influences how physical distribution planning andexecution addresses product volume, location of demand, and demand fluctuations?a. Productb. Pricec. Placed. Promotion
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 122. 
    Considering the service desired and the relative cost of the items, which of thefollowing would you most likely ship by truck?a. Regular shipment of cut flowers direct to a florist shopb. Regular shipments of iron orec. Regular shipments of graind. Emergency maintenance parts
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 123. 
    Total line-haul costs will vary with which of the following?a. Distance movedb. Packagingc. Customer discountsd. Perishability of the goods
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 124. 
    A fishbone diagram is an example of which of the following?a. A cost buildup methodb. A method to determine root causec. Capability analysisd. Another name for Pareto analysis
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 125. 
    Which of the following is most likely to improve quality at the source formanufactured parts?a. Applying as much automation as possibleb. Inspecting all parts for known defectivesc. Improving customer warranty coveraged. Reducing the variation in manufacturing process
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 126. 
    Which of the following statements is best regarding employee empowerment?a. Management is relieved of the responsibility for decisions the company makes.b. Employees are empowered to set their wage rates and hours of work.c. Line employees are given more authority to make decisions.d. Decision-making power is concentrated in a small, upper-level management group.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 127. 
    Which of the following statements is true regarding Pareto analysis?a. It separates the significant few from the trivial many.b. It uses the six categories of quality.c. It is an extension of the 50-50 rule of quality.d. It assigns weighted costs associated with internal versus external failure costs.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 128. 
    Which of the following statements is true?a. Cost buildup and storage add value to a product.b. Value starts with the customer.c. Cost and value are interchangeable terms.d. Lean/JIT manufacturing means always having product ready for the customer.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 129. 
    Which of the following is an advantage of work cells?a. Maximum machine utilizationb. Reduced material movementc. Larger batches and lower unit costsd. Reduced worker skills required
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 130. 
    Which of the following statements is true regarding total productive maintenance?a. Skilled mechanics are used to perform routine machine maintenance.b. Inspectors are used to ensure that every machine is ready for work at all times.c. Operators regularly report maintenance productivity to management.d. Machine operators take responsibility for most of the routine machinemaintenance.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 131. 
    Which of the following statements is true regarding the relationship with suppliers in alean/JIT environment?a. All cost reductions will be awarded directly to the buyer.b. Short-term contracts for multiple small deliveries will be used.c. Planning becomes more erratic and difficult.d. The supplier is viewed as an upstream work center.
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 132. 
    Which of the following describes the DMAIC methodology?a. A method for implementing plan-do-check-actb. A six-sigma process-improvement methodologyc. A method for lowering manufacturing expensesd. A lean/JIT methodology for implementing flow
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 133. 
    A control chart is primarily used to determine which of the following?a. The highest frequency of an eventb. The specification limitsc. Detect special causes of variation in a process, as opposed to random variationd. The cost of implementing quality systems
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 134. 
    Which of the following best specifies the flow of material through the productionprocess of manufacturing an orbital satellite?a. Vb. Ac. Td. I
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 135. 
    In a simplified drum-buffer-rope system, what is the throughput-based constraint?a. Raw materialsb. Shipping pointc. The active bottleneckd. The market
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 136. 
    What is the throughput if sales revenue = $250 million and true variable costs = $100million?a. $350 millionb. $150 millionc. $100 milliond. $2.5 million
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 137. 
    Which one of these steps from the five focusing steps represents the likely point wherean organization would add more resources to the capacity-constrained resource?a. Identify the constraintb. Exploit the constraintc. Subordinate everything elsed. Elevate the constraint
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D