M4L7 Exam Questions Flashcards
1
Q
- Opening stock, work in progress and closing stock are all types of?
a. Pareto analysis
b. Inventory classification
c. Inventory comparison
d. Material planning
A
c. Inventory comparison
2
Q
- ABC classification comes from which analysis?
a. Kraljic
b. Porter
c. Pareto
d. Carter
A
c. Pareto
3
Q
- What is the opposite of closing stock?
a. Opening stock
b. Work in progress
c. Obsolete stock
d. Finished Stock
A
a. Opening stock
4
Q
- What term completes the cycle: raw materials, work in progress….?
a. Closing stock
b. Finished stock
c. Inventory level
d. Redundant stock
A
b. Finished stock
5
Q
- What is the name of the stock that is held to cover unpredicted demand?
a. Buffer stock
b. MRO stock
c. JIT stock
d. Redundant stock
A
a. Buffer stock
6
Q
- What is the term used to describe when there is no demand for stock?
a. Obsolescent stock (this means its going obsolete)
b. Redundant stock
c. Obsolete stock
d. Slow moving stock
A
c. Obsolete stock
7
Q
- What is the term used to describe when one organisation has no further demand but another company may be able to use a stock item?
a. Obsolescent stock
b. Redundant stock
c. Obsolete stock
d. Slow Moving Stock
A
b. Redundant stock
8
Q
- Being able to do what accurately can help directly with the issues of holding obsolescent stock?
a. Planning
b. Forecasting
c. Benchmarking
d. Stock replenishment
A
b. Forecasting
9
Q
- Which supplies are those which are 100% incorporated into the finished product.
a. Indirect
b. Variable
c. Direct
d. Fixed
A
c. Direct
10
Q
- Bottlenecks in warehousing can be a feature of
a. poor stock rotation
b. poor lighting
c. poor flow
d. poor construction
- Bottlenecks in warehousing can be a feature of
A
c. poor flow
11
Q
- Product code 833/1256 is an example of a
a. Alpha-Numeric Code
b. Structured Code
c. Sequential Code
d. Random Code
A
b. Structured Code
12
Q
- Industry standard codes are not used for
a. specific dangerous substances
b. car light bulbs
c. steel cables and chains
d. books
A
c. steel cables and chains
13
Q
- Vehicles are weighed before and after entry a facility to determine load weight using a
a. load cell
b. weighbridge
c. crane scales
d. counting scales
A
b. weighbridge
14
Q
- Stationery in a manufacturing environment is most likely to be which type of stock?
a. Indirect
b. Direct
c. Fixed
d. Variable
A
a. Indirect
15
Q
- Pareto is also known as what rule?
a. 80/20
b. 20/80
c. 70/30
d. 60/40
A
a. 80/20
16
Q
- In relation to an ABC analysis, which category of product takes up 50% of the warehouse?
a. Z
b. B
c. C
d. A
A
c. C
17
Q
- The requirement for a stock item which is directly related to and therefore depending upon the rate of production is known as?
a. Independent stock
b. Interdependent stock
c. Dependent stock
d. Indirect stock
A
c. Dependent stock
18
Q
- Preparing an RFQ, expediting and handling are all aspects of what?
a. Stock management
b. Acquisition
c. Quality control
d. Holding Costs
A
b. Acquisition
19
Q
- Preliminary, post and which other cost comprise the three costs of acquisition?
a. Purchase
b. Procurement
c. Placement
d. Planning
A
c. Placement
20
Q
- Heating, insurance and bank interest are examples of which types of warehouse costs?
a. Selling
b. Stock
c. Rejecting
d. Holding
A
d. Holding
21
Q
- MRP, JIT and LEAN are all types of what?
a. Inventory planning
b. Inventory reduction
c. Inventory control
d. Inventory procurement
A
c. Inventory control
22
Q
- Ohno’s 7 wastes best fit in with which theory?
a. LEAN
b. MRP
c. JIT
d. Six Sigma
A
a. LEAN
23
Q
- ? forecasting uses qualitative information that is based on human opinion and insights that are not shown by hard data
a. Objective
b. Subjective
c. Quantitative
d. secondary
A
b. Subjective
24
Q
- What is a decision making tool businesses use to help budgeting, planning and estimating future growth”
a. Procuring
b. Planning
c. Forecasting
d. ERP
A
c. Forecasting
25
Q
- Trends are
a. Short cyclical moments
b. One off observations
c. An increase or decrease over time
d. Forecasting tools
A
c. An increase or decrease over time
26
Q
- Which of the below descriptions is one for a weighted average?
a. A calculation which attaches more importance to some elements of the data than others
b. A calculation to analyse data by creating series of averages of different subsets of the full data set
c. A calculation which attaches the same importance to all elements of the data set
d. A calculation which allows a set of data to be averaged over a set time period
A
a. A calculation which attaches more importance to some elements of the data than others
27
Q
- What is the term used when the same amount of product is repeatedly ordered?
a. Variable quantity
b. Fixed quantity
c. Economic quantity
d. Reorder point
A
b. Fixed quantity
28
Q
- Economic order quantities are calculated based on?
a. Demand, stockout and holding cost
b. Demand, supply and procurement cost
c. Demand, purchase and inventory cost
d. Demand, ordering and holding cost
A
d. Demand, ordering and holding cost
29
Q
- Which is a time-based stock replenishment system
a. Periodic
b. Specific
c. Regular
d. Fixed order
A
a. Periodic
30
Q
- Which of the below is the most recent system?
a. MRP
b. ERP
c. MRP II
d. ERP II
A
d. ERP II
31
Q
- Which company was Just In Time (JIT) pioneered by?
a. Motorola
b. Nissan
c. Toyota
d. Honda
A
c. Toyota
32
Q
- Which system allows no scrap or defects?
a. Kiazen
b. MRP
c. ERP
d. JIT
A
d. JIT
33
Q
- The scheduling signal to the next operator to deliver the next batch is known as what?
a. Reorder
b. Kanban
c. Lean
d. Six sigma
A
b. Kanban
34
Q
- Lean relates to
a. 7 purchases
b. 7 wastes
c. 7 factors
d. 7 costs
A
b. 7 wastes
35
Q
- Define, measure, analyse, control, improve equate to which theory?
a. Porters Five Forces
b. STEEPLE
c. Six Sigma
d. Lean
A
c. Six Sigma
36
Q
- LEAN = creating “???” for customers by reducing wastes?
a. Savings
b. Value
c. Benefits
d. Outcomes
A
b. Value
37
Q
- Which theory cannot deal with turbulence in the supply chain?
a. Six Sigma
b. LEAN
c. MRP
d. ERP
A
b. LEAN
38
Q
- A method that illustrates, analyses and improves the steps required to deliver a product or service is
a. Value engineering
b. Value analysis
c. Value stream mapping
d. Kano method
A
c. Value stream mapping
39
Q
- Fixed, discounted and promotional are examples of what?
a. Procurement price
b. Cost price
c. Purchase price
d. Pre-acquisition cost
A
c. Purchase price
40
Q
- Prices that are based on published indices such as the CPI are known are?
a. Reference indices
b. Referral indices
c. Regulated indices
A
a. Reference indices
41
Q
- A price that is based on a fixed price for part of the procurement and a variable change for another element is referred to as?
a. Variable pricing
b. Multi-part pricing
c. Indirect pricing
d. Discounted pricing
A
b. Multi-part pricing
42
Q
- 30, 60 or 90 days nett are examples of what?
a. Service Credits
b. Damage clauses
c. Warranty requests
d. Payment terms
A
d. Payment terms
43
Q
- In a pro-forma arrangement, when does the payment take place?
a. After confirmed receipt of the goods
b. After confirmed despatch of the goods
c. Before the order of goods is despatched
d. Before a purchase order is placed
A
c. Before the order of goods is despatched
44
Q
- Hire and lease are very similar. Which one of the two is usually for the shortest period of time?
a. Hire
b. Lease
c. Both the same
A
a. Hire
45
Q
- The process whereby suppliers are involved with manging stock is known as?
a. Vendor managed inventory
b. Vendor maintained inventory
c. Vendor measured inventory
d. Consignment stock
A
a. Vendor managed inventory
46
Q
- Which of the following would you consider conducting a TCO analysis on?
a. A routine procurement
b. A risk averse product
c. A CAPEX item
d. An OPEX item
A
c. A CAPEX item
47
Q
- Teams are made up of a variety of internal and external stakeholders. They are called
a. Expert
b. Cross-functional
c. Experienced
A
b. Cross-functional
48
Q
- Decommissioning and removal relate to which element of TCO?
a. Installation
b. End of life
c. Logistics
d. Decontamination
A
b. End of life
49
Q
- Whether to scrap or resell, health and safety considerations and the environmental impact should be considered when doing what to an item?
a. Disposing
b. Deregulating
c. Decommissioning
d. Dismantling
A
a. Disposing
50
Q
- When removing an asset, it is important to try and ………..the value of the asset reflecting in the accounts
a. Remove
b. Identify
c. Recover
d. Retain
A
c. Recover
51
Q
- Stock redundancies can be avoided in all situations if buyers purchase items more frequently in smaller quantities. Is this true or false? Why?
A
False, what the customer wants can change at any time.
52
Q
- Manufacturers should reduce packaging of plastics and other oil-based products in line with responsible environmental practice. What other factor should a manufacturer try to minimise in line with this practice?
a) Purchase of raw materials overseas
b) Hazardous substances when waste is incinerated
c) Purchase price of the raw materials
d) The amount spent on media advertising
A
b) Hazardous substances when waste is incinerated
53
Q
- Which of the three following factors influence stockholding policy for slow moving items?
a) Item cost
b) Surplus cost
c) Shortage cost
d) Lead time
A
c) Shortage cost
d) Lead time
54
Q
- Is it correct to say that the type of goods that a warehouse will be required to hold affect the way that the warehouse is designed and built? Why?
A
Yes, racking, temperature, security
55
Q
- Which of the following features should be considered following the purchase of a capital asset? Select two:
a) Who owns the equipment
b) Compatibility with existing equipment
c) Contribution to turnover
d) Cost of maintenance
A
c) Contribution to turnover
d) Cost of maintenance
56
Q
6.Which of the following are required in order to calculate the rate of stock turn? Choose two:
a) Total stock usage for the period
b) Average stock for the period
c) Average sales for the period
d) Closing stock for the period
e) Purchases for the period
A
a) Total stock usage for the period
b) Average stock for the period
57
Q
- The time period between placing an order and its receipt in stock is known as what?
a) Lead time
b) Carrying time
c) Shortage time
d) Overtime
A
a) Lead time
58
Q
- Which of the following should be included in an informal business case document? Choose two:
a) Introduction and background
b) Preferred supplier details
c) Associated costs and risks
d) Decommissioning process
A
a) Introduction and background
c) Associated costs and risks
59
Q
- An organisation has decided to use a freight forwarder to transport a large piece of equipment from overseas. Is this the best course of action to take?
a) No, as the freight forwarder will have little control over schedules or shipments
b) Yes, as the freight forwarder will be aware of hidden costs such as insurance and overseas documentation
A
b) Yes, as the freight forwarder will be aware of hidden costs such as insurance and overseas documentation
60
Q
- Which of the following are dependant demand items of stock? Choose two:
a) They depend on the production levels of the user departments
b) They depend on the production capacity of the supplier
c) They can be managed using JIT systems
d) They become obsolete within a short time
A
a) They depend on the production levels of the user departments
c) They can be managed using JIT systems
61
Q
- The main purpose of the Bill of Materials (BOM) is that it is used by the inventory manager to ensure that materials are issued to production using the first in first out approach. Is this true?
a) Yes, because the BOM is more detailed than the inventory records
b) Yes, because the BOM is developed from the inventory system and records
c) No, because the first in first out method can still be applied without the BOM
d) No, because the BOM is used only for stock evaluation purposes
A
c) No, because the first in first out method can still be applied without the BOM
62
Q
- A buyer has discovered that two pallets of items in the storeroom are obsolete. If these components are written off which of the following are true?
a) Stock levels will decrease
b) Profits will increase
c) Profits will decrease
d) Stock levels will increase
A
a) Stock levels will decrease
c) Profits will decrease
63
Q
- A procurement manager is assessing the cost of a proposed new machine. He has taken account of the purchase price, the expected life of the machine in years, the annual running costs such as the wages of the operator, the cost of training staff to operate the machine, fuel consumption and both the cost and availability of spares. What other factor will the manager have to take into account?
a) Disposal value of the machine
b) The costing system used by the company
c) Whether the costs are fixed or variable
d) Whether the costs are direct or indirect
A
a) Disposal value of the machine
64
Q
- The only reason that stocks become obsolete is because it has been held in stock for a very long time. Is this a valid statement?
a) Yes, because all obsolete items result from overstocking
b) Yes, because the users assume that the items are no longer in stock
c) No, because stock held for a long time are called buffer stock
d) No, because some items can become obsolete because of changing consumer needs
A
d) No, because some items can become obsolete because of changing consumer needs
65
Q
- In which of the following situations would a total cost of ownership model be appropriate?
a) A stock item for resale where the annual expected sales are more than 30% of total sales
b) A logistics contract over a five year term with annual reviews of service performance
c) A capital asset with a five year expected lifespan replacing a similar piece of equipment
d) A contract for the design of a new warehouse
A
c) A capital asset with a five year expected lifespan replacing a similar piece of equipment
d) A contract for the design of a new warehouse
66
Q
- JIT has several objectives in the control of inventory, such as:
a) That the cost of inventory is directly proportional to the value of the inventory
b) All products will be free from defects
c) Increase the level of buffer stocks to reduce stockouts
d) Reduction of work in progress and finished goods inventories to zero
A
d) Reduction of work in progress and finished goods inventories to zero
67
Q
- What does TCO include?
A
Maintenance, operating, acquisition, disposal
68
Q
- Why is it important to consider the value of opening stock in the accounts?
a) It allows the calculation of the acquisition costs of the stock items
b) It provides information to calculate the rate of stock turnover in the organisation
c) If unsold stock is not included, it can create an inflated profit or even a loss in the organisation’s finances
d) It indicates the number of days the current stock will last if sales continue at the unanticipated rate
A
c) If unsold stock is not included, it can create an inflated profit or even a loss in the organisation’s finances
69
Q
- What factors should you consider when decommissioning and disposing of a machine at the end of its useful life?
A
Environmental impact, cost of disposal, residual value, health and safety, can we reuse recycle or recover, legislation, hazardous materials
70
Q
- In order for an environmental policy to be effective, which two must apply?
a) It must be an energy saving policy
b) It must reflect the nature of the business
c) Full account must be taken of the cost of the policy
d) It must be endorsed by senior management
A
b) It must reflect the nature of the business
d) It must be endorsed by senior management
71
Q
- What are the advantages of using automation in a warehouse?
A
Removal of labour costs, create efficiencies, reduces the risk of pilferage
72
Q
- What are the holding costs of inventory?
A
Insurance, rent, stock management
73
Q
- What is pilferage?
A
Theft – stealing small things
74
Q
- What is the most important environmental consideration when designing packaging?
A
Recyclability, environmental cost or creating it
75
Q
- the maintenance manager has decided to implement a Planned Preventative Maintenance Programme on a number of key pieces of equipment which takes 30 minutes at the beginning of each shift. Is this an advantage to the company? Why?
A
To pre-emptively carry out repairs before things fail, ultimately reduces downtime later. Should lower maintenance cost
76
Q
- Name three advantages of using RFID tagging.
A
They hold the most data, allows items to be tracked in real time, helps with security of stock, you can scan multiple tags at the same time
