Production and Operations Management

161. Which of the following is not a trend in job design?

  1. Temporary Workers
  2. 9 to 5 scheduling
  3. Alternative workplaces (telecommuting, shared offices, etc)
  4. Automation of manual work
Correct answer: (B)
9 to 5 scheduling

162. Work measurement techniques include all of the following except:

  1. On the job training
  2. Time study
  3. Work sampling
  4. Predetermined motion-time data systems
Correct answer: (A)
On the job training

163. One use of inventory is

  1. To ensure that item cost is maximized.
  2. To tightly link production and distribution processes.
  3. To provide a hedge against inflation.
  4. To tightly link a firm's production with its customers' demand.
Correct answer: (A)
To ensure that item cost is maximized.

164. The appropriate level of safety stock is typically determined by

  1. Minimizing expected stockout cost.
  2. Taking the square root of the economic order quantity.
  3. Choosing the level of safety stock that assures a given service level.
  4. Carrying sufficient safety stock so as to eliminate all stockouts.
Correct answer: (C)
Choosing the level of safety stock that assures a given service level.

165. Inventory carried for the purpose of providing flexibility to each decision-making unit to'manage its operations independently is known as

  1. Safety inventory
  2. Cycle inventory
  3. Seasonal inventory
  4. Decoupling inventory
Correct answer: (D)
Decoupling inventory

166. Higher number of stock points required for risk pooling results in higher savings in terms of

  1. Decoupling inventory
  2. Pipeline inventory
  3. Cycle inventory
  4. Safety inventory
Correct answer: (C)
Cycle inventory

167. A system that triggers ordering on a uniform time basis is called a

  1. Fixed-quantity system.
  2. Reorder point system.
  3. Fixed-period system.
  4. EOQ.
Correct answer: (C)
Fixed-period system.

168. Extra units that are held in inventory to reduce stockouts are called

  1. Just-in-time inventory.
  2. Reorder point.
  3. Demand variance.
  4. Safety stock.
Correct answer: (D)
Safety stock.

169. ABC analysis divides an organization's on-hand inventory into three classes based upon

  1. Annual demand.
  2. The number of units on hand.
  3. Unit price.
  4. Annual dollar volume.
Correct answer: (D)
Annual dollar volume.

170. In the probabilistic model, increasing the service level will

  1. Cannot be determined.
  2. Have no impact on the cost of the inventory policy.
  3. Increase the cost of the inventory policy.
  4. Reduce the cost of the inventory policy.
Correct answer: (C)
Increase the cost of the inventory policy.
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