1. Business cycle, price trends, National Economy are …………….

a. Micro Factors
b. Macro Factors
c. Controllable Factors
Answer: b
2. ……………………….also called part lists or building lists is the document generated at the design stage.
a. MRP (Material Requirement Planning)
b. BOM (Bill of Materials)
c. MPS (Master Production Schedule)
Answer: b
3. ………………………………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.
a. MPS
b. MRP
c. BOM
Answer: b
4. …………………………is the time that elapses between issuing replenishment order and receiving the
material in stores.
a. Replenishment time
b. Lead time
c. Idle time
Answer: c
5. …………………is the task of buying goods of right quality, in the right quantities, at the right time and
at the right price.
a. Supplying
b. Purchasing
c. Scrutinizing
Answer: b
6. Which is not a part of 5R’s of buying?
a. Right Quality
b. Right Quantity
c. Right Source
d. Right Price
e. None of the above
Answer: e
7. Purchasing responsibilities can be divided into Buying, Clerical and ………..division.
a. Packing
b. Traffic
c. Record
d. Follow up
Answer: b
8. The first activity of Purchasing cycle is
a. Communicating requirement to the purchase
b. Source Selection and development
c. Recognizing the need for procurement
d. Inspection of goods
Answer: c
9. Buying according to the requirements is called …………
a. Seasonal Buying
b. Hand to mouth buying
c. Scheduled Buying
d. Tender Buying
e. Speculative Buying
Answer: b
10. Procuring an item in staggering deliveries according to the delivery schedule finished to the
supplier by the buyer.
a. Seasonal Buying
b. Hand to mouth buying
c. Scheduled Buying
d. Tender Buying
e. Speculative Buying
Answer: c
11. Buying of the annual requirements of an item during its season.
a. Seasonal Buying
b. Hand to mouth buying
c. Scheduled Buying
d. Tender Buying
e. Speculative Buying
Answer: e
12. Raw Materials and WIP can be classified under-
a. Indirect Material
b. Direct Material
c. Finished Material
d. Standard Parts
Answer: b
13. …………..are the basic materials which have not undergone any conversion since their receipt from
suppliers.
a. WIP
b. Raw Material
c. Finished Parts
d. Work Made Parts
Answer: c

14. Product life cycles for many products are ________, forcing companies to not only become ________ in design
but also to communicate changes and needs to suppliers and distributors. 
1. shrinking rapidly, more flexible
2. shrinking rapidly, less flexible
3. growing rapidly, more flexible
4. growing rapidly, less flexible

15. All portions of the material production from __________ to ___________ are considered to be a linked chain
under the supply chain concept. 
1. work in process, final customer
2. raw material, work in process
3. work in process, raw material
4. raw material, final customer

To get the most profit, a company should________ 

1. Provide little customer service
2. Provide high production costs
3. Provide the lowest inventory investment
4. Provide the highest distribution costs

Finance must keep investment and costs low. This can be done by___________ 
1. Increasing inventory so inventory investment is at a maximum
2. Decreasing the number of plants and warehouses
3. Producing small quantities
4. Using short production runs
Today the concepts of ______ manufacturing stress the need to supply customers with what they want when
they want it and to keep inventories at a _______. 
1. TQM, maximum
2. Six Sigma, maximum
3. JIT, minimum
4. ISO 9000, minimum
The concept of having ____ department(s) responsible for the flow of materials, from supplier through
production to consumer, is relatively new.
1. one
2. multiple
3. functional
4. none of the above

Materials management is also called____________ 

1. Distribution planning
2. Control and logistics management
3. Both of the above
4. Neither of the above

Materials management is a coordinating function responsible for planning and controlling materials flow. Its
objective(s) is/are: 
1. Maximize the use of the firm's resources
2. Provide the required level of customer service
3. Both of the above
4. Neither of the above

_______ and ______ are costs that increase or decrease with the quantity sold. 
1. Direct labor, indirect material
2. Direct labor, direct material
3. Indirect labor, indirect material
4. Indirect labor, direct material

Inventory not only makes up a portion of the cost of goods sold but has to be purchased at the beginning of
production to be processed into finished goods. This type of inventory is called _____________. 
1. work-in-process
2. finished goods
3. raw materials
4. none of the above

A good planning system must consider:

1. What are we going to make?
2. What does it take to make it?
3. What do we have and need?
4. All of the above
_______ is the capability of manufacturing to produce goods and services.
1. Capacity
2. Priority
3. Planning
4. Control
________ is responsible for analyzing the marketplace and deciding the firm's response, the markets to be
served, the products supplied, and desired levels of customer service.
1. Marketing
2. Finance
3. Production
4. Engineering
______ must satisfy the demands of the marketplace. It does so by using plants, machinery, equipment, labor,
and materials as efficiently as possible.
1. Marketing
2. Finance
3. Production
4. Engineering

The _____________________ is a plan for the production of individual end items.

1. MPS
2. JIT
3. MRP II
4. MRP
Purchasing and ___________ represent the implementation and control phase of the production planning and
control system.
1. production activity control (PAC)
2. material requirements planning (MRP)
3. just-in-time (JIT)
4. marketing
A _________ strategy means producing the amounts demanded at any given time.
1. production leveling
2. chase
3. subcontracting
4. TQM
In the _____________ environment, several product options exist (e.g., automobiles) and the customer is not
willing to wait until the product is made. Therefore manufacturers produce and stock standard component
parts.
1. make-to-order
2. assemble-to-order
3. level production
4. make-to-stock
____________ is the first step in a manufacturing planning and control system.
1. Production planning
2. Achieving the forecast
3. Maintaining the required inventory levels
4. Maintaining the planned backlog
The cost of a _________ that is too large equals the cost of turning away business.
1. production plan
2. backlog
3. resource plan
4. capacity plan
The MRP forms a vital link between sales and production as follows:
1. The MRP makes possible valid order promises.
2. The MRP is a plan of what is to be produced and when.
3. The MRP is a contract between marketing and manufacturing.
4. All of the above
The information needed to develop an MPR includes:
1. The production plan
2. Forecasts for individual end items
3. Actual orders received from customers and for stock replenishments.
4. All of the above
A schedule is satisfactory when:
1. Capacity is greater than the production plan
2. It doesn't specify to the plant when to start production
3. Capacity is consistent with the production plan
4. It doesn't specify to the plant when to stop production
The objectives in developing an MRP include:
1. To maintain the desired level of customer service by maintaining finished goods inventory levels or
by scheduling to meet customer delivery requirements
2. To make the best use of material, labor, and equipment
3. To maintain inventory investment at the required levels
4. All of the above
To reach its objectives, the master production schedule must:
1. Satisfy customer demand
2. Be outside the capacity of manufacturing
3. Be outside the guidelines of the production plan
4. Be outside both the capacity of manufacturing and the guidelines of the production plan
The first step in preparing an MPS is:
1. Resolve differences between the preliminary MPS and the capacity available.
2. Check the preliminary MRP against available capacity.
3. Develop a preliminary MRP.
4. Develop a rough-cut capacity plan.
Critical resources in rough-cut capacity planning include:
1. Bottle-neck operations
2. Labor
3. Critical materials
4. All of the above
It is possible to increase the available capacity by:
1. Using fewer workers
2. Scheduling overtime
3. Limiting subcontracting
4. Rerouting away from other work centers
In the __________________ environment, many different end items are made from a small number of components.
1. make-to-stock
2. make-to-order
3. assembly-to-order
4. engineer-to-order
In the __________________ environment, many end items can be made from combinations of basic components
and subassemblies.
1. make-to-stock
2. make-to-order
3. assembly-to-order
4. engineer-to-order
The sides, ends, legs, and tops of tables are ________ demand items.
1. dependent
2. independent
3. forecast
4. calculated
Since _______ demand is not related to the demand for any other assemblies or products, it must be ___________.
1. dependent, forecast
 2. dependent, calculated
3. independent, forecast
4. independent, calculated
All major inputs to the MRP system include:
1. Master production schedule and bill of material
2. Bill of material and inventory records
3. Inventory records and master production schedule
4. Master production schedule, inventory records, and bills of material
The ___________ is a statement of which end items are to be produced, their quantity, and the dates they are to
be completed.
1. MRP
2. MPS
3. inventory record
4. bill of materials
The bill of materials shows all the parts required to make __________.
1. one item
2. the MPR
3. work-in-process inventory
4. raw materials inventory
A _________ is used when companies usually make more than one product and the same components are often
used in several products.
1. single-level bill
2. multiple bill
3. multilevel bill
4. product tree
Financially, inventories are very important to manufacturing companies and represent _________ of total
assets on the balance sheet.
1. 10% to 45%
2. 25% to 40%
3. 20% to 60%
4. 50% to 80%
__________ are purchased items received that have not entered the production process. They include
purchased materials, component parts, and sub-assemblies.
1. Raw materials
2. Work-in-process
3. Finished goods
4. MRO supplies
___________ include hand tools, spare parts, lubricants, and cleaning supplies. 
1. Raw materials
2. Work-in-process
3. Finished goods
4. MRO supplies
Inventory serves as a buffer between:
1. Supply and demand
2. Finished goods and component availability
3. Customer demand and finished goods
4. All of the above
__________ inventory is held to cover random unpredictable changes in supply and demand or lead time.
1. Anticipation
2. Fluctuation
3. Lot-size
4. Transportation
_______is a measure of customer service.
1. Percentage of orders shipped on schedule
2. Percentage of line items shipped on schedule
3. Order-days out of stock
4. All of the above
Storing inventory requires ___________________ and as inventory increases, so do these costs.
1. space and workers
2. workers and equipment
3. space and equipment
4. space, workers, and equipment
Liabilities are obligations or amounts owed by a company and include:
1. Accounts payable
2. Wages payable
3. Long-term debt
4. All of the above
The risks in carrying inventory are: 
1. Obsolescence and damage
2. Damage and pilferage
3. Pilferage and deterioration
4. Obsolescence, damage, pilferage, and deterioration
________ is the costs incurred in the process of making revenue.
1. Income
2. Cost of goods sold
3. Expenses
4. Retained earnings
A(n) _____________ lists all the parts needed to make one complete assembly.
1. summarized parts list
2. indented bill
3. multilevel bill
4. single-level bill
___________ is the process of multiplying the requirements by the usage quantity and recording the
appropriate requirements throughout the product tree.
1. Offsetting
2. Planning orders
3. Lead time
4. Exploding
_______________ means that authorization is given to purchasing to buy the necessary material or to
manufacturing to make the component.
1. Planned order release
2. Releasing an order
3. Scheduled receipts
4. Open orders
____________ are orders placed on manufacturing or on a vendor and represent a commitment to make or buy.
1. Planned order releases
2. Releasing orders
3. Scheduled receipts
4. Open orders
______________involves long-range capacity resource requirements and is directly linked to production
planning.
1. Resource planning
2. MRP
3. Capacity requirements planning
 4. Rough-cut capacity planning
Resource planning involves changes in staffing, capital equipment, product design, or other facilities that
take a ________ time to ___________.
1. short, acquire and eliminate
2. long, acquire and eliminate
3. short, utilize and change
4. long, utilize and change
The inputs needed for a CRP include:
1. Open shop orders
2. Planned order released
3. Routings
4. All of the above
The Gregorian calendar:
1. Has an equal number of days per month
2. Spreads holidays evenly throughout the year
3. Works on a decimal base
4. Presents problems for manufacturing planning and control
Capacity needs to be measured:
1. At the machine or individual worker level
2. At the work center level
3. At the plant level
4. All of the above
_____________ is the number of hours a work center can be used.
1. Demonstrated capacity
2. Rated capacity
3. Available hours
4. Utilization
Rated capacity is calculated by taking into account the work center ___________.
1. utilization and efficiency
2. utilization and demonstrated capacity
3. efficiency and production
4. efficiency and demonstrated capacity
The term _____________means that the work center is overloaded and the term ________________ means the work
center is under loaded.
1. undercapacity, overcapacity
2. overcapacity, under capacity
3. overcapacity, utilization
4. utilization, under capacity
In the _________ run, capacity ________ be adjusted.
1. short, can
2. short, cannot
3. long, cannot
4. none of the above
If the workload in a manufacturing plan cannot be changed, an alternative is to:
1. Schedule overtime
2. Schedule undertime
3. Adjust the workforce by hiring
4. All of the above
______________is concerned with the production of high-volume standard products.
1. Flow manufacturing
2. Intermittent manufacturing
3. Product manufacturing
4. All of the above
Routings are fixed and work centers are arranged according to the routing in ________________.
1. flow manufacturing
2. intermittent manufacturing
3. product manufacturing
4. all of the above
Flow of work through the shop is varied and depends on the design of a particular product. In _____________, as
orders are processed, they will take more time at one workstation than at another. Thus, the work flow is not
balanced.
1. flow manufacturing
2. intermittent manufacturing
3. product manufacturing
4. all of the above
An example of project manufacturing is:
1. Gasoline
2. Automobiles
3. Appliances
4. Large shipbuilding
The __________________ contains a list of the single-level components and quantities needed to assemble a
parent item.
1. work center master file
2. item master file
3. product structure file (bill of material file)
4. routing file
The _________________ collects all of the relevant data on a work center.
1. work center master file
2. item master file
3. product structure file (bill of material file)
4. routing file
Each active manufacturing order has a record in the _____________________.
1. work center master file
2. item master file
3. product structure file (bill of material file)
4. shop order master file
_________ is the amount of time the job is waiting at a work center before an operation begins.
1. Queue time
2. Setup time
3. Run time
4. Wait time
The transit time between work centers is ____________.
1. setup time
2. run time
3. wait time
4. move time
_______________ is a method of reducing manufacturing lead time. The order is split into two or more lots and
run on two or more machines simultaneously.
 1. Operation overlapping
2. Operation splitting
3. Infinite loading
4. Backward scheduling
On average, manufacturing firms spend about ________ of their sales dollars on the purchase of raw materials,
components, and supplies.
1. 20%
2. 50%
3. 30%
4. 40%
The objectives of purchasing include:
1. Obtaining the goods and services at the highest price
2. Obtaining goods and services of the lowest quality
3. Ensuring the best possible service and prompt delivery by the supplier
4. Obtaining goods and services at any quantity
A ________________ is a legal offer to purchase.
1. quotation
2. purchase order
3. receiving order
4. supplier's invoice
When the supplier's invoice is received, the following should agree:
 The purchase order, the receiving report, and the invoice
 The purchase order, the work order, and the production report
 The receiving report, the quotation, and the material specification
 The material specification, the purchase requisition, and the invoice
In purchasing an item or service from a supplier, which factor is not included when specifications are being
developed?
1. Delivery requirement
2. Quantity requirements
3. Price requirements
4. Functional requirement
________ is the systematic use of techniques that identify a required function, establish a value for that
function, and finally provide the function at the lowest overall cost.
1. Cost analysis
2. Functional analysis
3. Value analysis
4. Functional specifications
_______ is most often used in wholesale or retail businesses but is also used extensively in manufacturing.
1. Description by brand
2. Description by specification
3. Description by function
4. Description by buyer
___________specifications and standard specifications are the two major sources of specifications or ways of
describing a product.
1. Functional
2. Buyer
3. Marketing
4. Production
______ sourcing is the use of more than one supplier for an item.
1. Single
2. Multiple
3. Sole
 4. Engineering
Materials such as copper, coal, wheat, meat, and metals are:
1. Standard products
2. Items of small value
3. Made-to-order items
4. Commodities
_______________ occurs when a customer's order is received.
1. Demand management
2. Forecasting
3. Random variation
4. Order processing
Trends:
1. Are level
2. Have no change from period to period
3. Can rise or fall
4. All of the above
______________ is usually thought of as occurring on a yearly basis, but it can also occur on a weekly or even
daily basis.
1. Seasonality
2. Random variation
3. A cycle
4. A trend
Over a span of several years and even decades, wavelike increases and decreases in the economy influence
demand and are called _________.
1. seasonality
2. random variation
3. cycles
4. trends
______________ demand items need to be forecast.
1. Independent
2. Dependent
3. Both independent and dependent
4. Neither independent nor dependent
The near future holds _____ uncertainty than (as) the far future.
1. less
2. more
3. the same
4. all of the above
_______________ techniques are projections based on judgment, intuition, and informed opinions.
1. Extrinsic forecasting
2. Quantitative forecasting
3. Intrinsic forecasting
4. Qualitative forecasting

The Delphi method:

1. Uses a panel of experts who give their opinion on what is likely to happen
2. Consists of projections based on external indicators that relate to the demand for a company's
products
3. Uses economic indicators, such as housing starts and gasoline consumption, to forecast demand
4. Uses historical data to forecast demand
Products likely to have seasonal or periodic demand patterns include:
1. Toilet paper and paper towels
2. Toothpaste and deodorant
3. Skis and lawnmowers
4. Milk and meat
______________ exists when the cumulative actual demand varies from the cumulative forecast.
1. Forecast error
2. Random variation
3. Mean absolute deviation
4. Bias