Production and Operations Management

111. Which of the following statements is correct regarding profit maximization as the primary goal of the firm?

  1. Profit maximization considers the firm's risk level.
  2. Profit maximization will not lead to increasing short-term profits at the expense of lowering expected future profits.
  3. Profit maximization does consider the impact on individual shareholder's EPS.
  4. Profit maximization is concerned more with maximizing net income than the stock price.
Correct answer: (D)
Profit maximization is concerned more with maximizing net income than the stock price.

112. __________________ is concerned with the maximization of a firm's stock price.

  1. Shareholder wealth maximization
  2. Profit maximization
  3. Stakeholder welfare maximization
  4. EPS maximization
Correct answer: (A)
Shareholder wealth maximization

113. ___________________ is the scientific technique for planning the ordering and usage of materials at various levels of production and for monitoring the stocks during these transaction.

  1. MPS
  2. MRP
  3. BOM
  4. None of these
Correct answer: (B)
MRP

114. Procuring an item in staggering deliveries according to the delivery schedule finished to the supplier by the buyer.

  1. Seasonal Buying
  2. Hand to mouth buying
  3. Scheduled Buying
  4. Tender Buying
  5. Speculative Buying
Correct answer: (C)
Scheduled Buying

115. Which of the following statements is not correct regarding earnings per share (EPS) maximization as the primary goal of the firm?

  1. EPS maximization ignores the firm's risk level.
  2. EPS maximization does not specify the timing or duration of expected EPS.
  3. EPS maximization naturally requires all earnings to be retained.
  4. EPS maximization is concerned with maximizing net income.
Correct answer: (D)
EPS maximization is concerned with maximizing net income.

116. __________________ is the time that elapses between issuing replenishment order and receiving the material in stores.

  1. Replenishment time
  2. Lead time
  3. Idle time
  4. All of these
Correct answer: (B)
Lead time

117. __________________ is concerned with the maximization of a firm's earnings after taxes.

  1. Shareholder wealth maximization
  2. Profit maximization
  3. Stakeholder maximization
  4. EPS maximization
Correct answer: (B)
Profit maximization

118. The first activity of Purchasing cycle is

  1. Communicating requirement to the purchase
  2. Source Selection and development
  3. Recognizing the need for procurement
  4. Inspection of goods
Correct answer: (C)
Recognizing the need for procurement

119. What is the most appropriate goal of the firm?

  1. Shareholder wealth maximization.
  2. Profit maximization.
  3. Stakeholder maximization.
  4. EPS maximization.
Correct answer: (A)
Shareholder wealth maximization.

120. __________________ is the task of buying goods of right quality, in the right quantities, at the right time and at the right price.

  1. Supplying
  2. Purchasing
  3. Scrutinizing
  4. None of these
Correct answer: (B)
Purchasing
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