OPERATION MANAGEMENT

1. Manager (operations) of a manufacturing factory is planning to set the production target for the month
of July (2005). He uses first-order exponential smoothing technique to forecast the demand. Actual and
forecasted demand for last four months (in 2005) is as follows:
Month |March |Apr |May |June
Forecast |52.o |43.s |44.s |47.8
Actual |4o.o |45.o |49.2 |52.o
The demand forecast for the month of July (2005) would be
[A] 47.9
[B] 48.6
[C] 49.3
[D] 50.7

2. Roshni Ltd... A bulb manufacturing company has earned a reputation in the market because of the long
life of its bulb filaments. This is an appropriate example of which of the following quality dimensions?
[A] Features
[B] Conformance
[C] Serviceability
[D] Durability

3. The categories of decisions that are taken by operations managers are

l. Strategic decisions.
ll. Tactical decisions.
lll. Technical decisions.
Iv. Operational decisions.
[A] (I). (II) and (III) above
[B] (I). (II) and (IV) above
[C] (I). (III) and (IV) above

[D] (II). (III) and (IV) above

4. Which of the following is a function of Directing?

[A] issue job assignments and instructions
[B] Guide by informing correct work methods
[C]Give more challenging job assignments
[D]Support employees in training programs

5. Which of the following constitutes the development of new products?

l. idea generation.
ll. Economic evaluation.
lll. Market testing.
[A]Only 1 above
[B] both 1: and 2 above
[C] Both 1 and 3 above
[D].All 1, 2 and 3 above

6._____ is the average of the errors made by the forecast over a period of time without considering the
direction of error.
[A]mean Square Error
[B] Mean Forecast Error
[C] Mean Absolute Deviation
[D] Mean Absolute Percentage Error

7. Demand for a product X' for Jan to June is given in the table. Calculate the demand for the product
using 3 month simple moving average for July in units Months Jan Feb March April May June
Demand (in units) 100 150 160 120 180 140

[A] 127
[EI] 137
[C] 147
[D] 157

8. Revathi Works Private Limited earns a prot of Rs.75,000 by selling 25,000 units. The selling price
and variable cost per unit is Rs.25 and Rs.10 respectively". Then the Breakeven point occurs at
[A] 12,000 units
[B] 15,000 units
[C] 20,000 units
[D] 25,000 units

9. Which of the following is an objective function for the information provided? A trader sells chairs and
tables at Rs.230 and Rs.580 each respectively", he procures them at Rs.180 and Rs.480 respectively".
[A] Maximize Z = 230x1+ 480 x2
[E] Minimizes =1B0 x1+ 580 x2
[C] Minimize Z = 230 x1 + 580 x2
[D] MaximizeZ = 50 x1 +100 x2

10. A rm achieved sales of 1000 units in the month of May when the forecast was for 900 units. The
estimated sales for the month of June for a smoothing constant of 0.1 are
[A] 850 units
[E] 870 units
[C] 890 units
[D] 910 units

11. If a company works for 3 shifts of 8 hours each a day and setup time of each machine is one hour in
each shift. The daily demand is 3,780 units. The sum of task times [T1] is 100 seconds. Then the
theoretical number [NT] of machines required is
[A] 2 work stations
[E] 13 work stations
[C] 4 work stations
[D] 5 work stations

12. Which of the following is not a reason for holding nished goods as inventory?
[A]Larger shipments can result in reduced incoming freight costs and material handling cost
[B]Production of products as and when the customers demand them can be uneconomical
[C]Quantity discounts can result from larger purchase quantities
[D]Black logs in customer orders may not always be allowed

13. Which of the following constitute functions of M aster Production Schedule?

l. Translate aggregate plans.
ll. Evaluate alternative schedules.
lll. identify material requirements.
iv. Generate capacity requirements.
[A] 1, 2 and 3 above
[B] 1, 2 and 4 above
[C] 1, 3 and 4 above
[D]All 1, 2, 3 and 4 above

14. Which of the following is not an advantage of Job Specialization?

[A] It results in lower production time and higher productivity by the Learning Curve Effect due to
repetition

[B] lt results in simpler work instructions and easy production control because of consistence in work
assignment
[C] It always results in higher work satisfaction
[D]There is ease in recruiting new workers because fewer skills are required

15. in which of the following work measurement Techniques. Managers generally determine reasonable
standards for new common tasks, basing on the standards previously set for old Common tasks, and
usually maintain a database of the standard time required for work elements with information obtained
through previous studies?
[A]Historical Analysis
[B]Predetermined Motion Times
[C] Work Sampling
[D]Standard Data

16. Over the years, different approaches to job design have developed. Put these 4 approaches in
chronological order.
a. Ergonomics, Scientific Management, Behavioral Approach, Division of Labor.
b. Scientific Management, Division of Labor, Ergonomics, Behavioral Approach.
c. Division of Labor, Scientific Management, Behavioral Approach, Ergonomics.
d. Division of Labor, Scientific Approach, Ergonomics, Behavioral Approach.

17. Frederick Winslow Taylor is best known for the introduction of which approach to job design?
a. Scientific Management
b. Behavioral Approach. Division of Labored. Ergonomics

18. In Work Measurement terms Standard Performance is defined as:

a. The rate of output which qualified workers will achieve without over-exertion as an average over a
working day provided they are motivated to apply themselves to their work.

b. The rate of output which qualified workers will achieve as an average over a working day provided
they are motivated to apply themselves fully during the whole day.
c. The rate of output which trained workers will achieve as an average over a working day provided they
are motivated to apply themselves to their work.
d. The rate of output which average workers will achieve without over-exertions an average over a
working day.

19. Ergonomics is not concerned with which of the following aspects:

A. Noise levels
b. Illumination levels
c. Working Temperature.
d. Supervisory Skills

20. In Behavioural Approaches to Job Design which approach adds greater tasks and greater control over
the job?
a. Job Enrichment
b. Job Enlargement
c. Job Rotation
d. Empowerment

21. The father of Scientific Management is:

a. Henry Ford
b. Henri Gantt
c. W. Edwards Deming
d. Tom Peterse. Frederick W. Taylor

22. Job rotation:

a. is a programmed through which management seeks greater productivity from workers.

b. involves giving employees work with a greater degree of responsibility and autonomy.
c. is another term for employee empowerment.
d. means that staff are moved periodically from task to task in order to increase variety and interest.

23. Job Enrichment:

a. Increases the amount of money employees are paid for completing a unit of work.
b. involves giving employees work with a greater degree of responsibility and autonomy.
c. involves allocating a wider range of similar tasks to individuals
d. is a programme through which management seeks greater productivity from workers

24. Within a typical behavioural model of job design, which of the following would be considered as
representing core job characteristics?
a. Quality / Cost / Mutuality
b. Vertical Loading / Skill Variety / Output
c. Task Combination / Task Identity / Autonomy
d. Task Identity / Task Significance / Autonomy

25. If all persons had identical preferences and productivity factors (ability, skill level, education,
experience, e(c.), the highest paying jobs would be the most
[A] Prestigious.
[B] Convenient.
[C] undesirable.
[D] Easily learned.

26. Automated production methods are only attractive when they

[A] Are undertaken in heavily unionized sectors of the economy.
[B] Reduce per-unit costs.

[C] Replace workers.

[D] Decrease labor productivity.

27. The fact that some people will work hard to earn a lot of money while others will be content with
much less income indicates that
[A] Worker preferences are an important source of earning g differentials.
[B] Economics ranks one set of worker preferences as more desirable than another.
[C] Some people can be paid less for doing hard work while others have to be paid a premium for doing a
similar task.
[D] Skill levels of laborers are a minor consideration in wage rate determination.

28. Which of the following is most likely to reduce the nominal market wage in a job category?
[A] The job requires employees to work the night shift from 1 l P.M. to 7 AM.
[B] The job is prestigious, and the work is quite interesting.
[C] The job is widely viewed as dangerous.
[D] The job requires employees to move from city to city quite often.

29. Wages in the United States are higher than those in India primarily because
[A] The weather is better in the United States.
[B]larger proportion of the labor force is unionized in the United States.
[C] Less capital per employee is required in the United States.
[D] The human and physical capital of American workers exceeds (hat of their Indian counterparts

30. Economic theory suggests that the standard of living of American workers would rise if
A] The minimum wage was doubled.
[B] Automation was outlawed.
[C] Workers were forced to retire earlier.

[D] Technological improvements increased output per Worker-hour.

31. The earnings of all employees in a competitive economy would be equal if

A. all individuals were homogeneous.
B. all jobs were equally attractive.
C. workers were perfectly mobile among jobs.
D. all of the above are true.

32. When employment discrimination results from the personal prejudices of employers, economic theory
suggests that
a. it is costless for employers to discriminate against groups they do not like.
b. the wages of employees who are discriminated against will actually rise.
c. an employer who discriminates will experience higher costs.
d. disc1'imination by an employer will reduce production costs since the employer can pay lower wages.

33. In a market economy, which of the following is most important if one is going to achieve high
Earnings?
a. hard work
b. provision of goods and/or services that others value highly
c. having a graduate degree in a field like history or sociology
d. membership in a labor union

33. Both buyers and sellers are protected by market competition. Competition is the great regulator that
protects consumers against high product prices (relative to costs) and productive workers against low
wages. These statements are
A. essentially true.
B. false: competition protects consumers but cannot protect workers.
C. false: competition protects workers but cannot protect consumers.

D. true. When consumer protection organizations are active and labor unions are powerful; otherwise it is
false

34. Which of the following is not a key activity of an operations manager?

a. Understanding the needs of customer
b. Continually learning
c. Managing cash flows
d. Exploiting technology to produce goods and services

35. Which one of the following best represents a pure service?

a. Bank loans
b. Computer diagnosis and repair
c. Attending a play
d. Fast food restaurant

36. Which one of the following best represents a pure good?

a. Salt
b. Fast food
c. Attending a play
d. Vehicle repair

37. Which of the following is not true regarding the differences between goods and services?
a. Demand for services is easier to forecast
b. Customers participate in many services
c. Services cannot be stored as physical inventory
d. Patents do not protect services

38. Service organizations generally

a. Locate in close proximity to the customer
b. Rely on physical inventory
c. Take advantage of patents
d. Can delegate human behaviour and marketing skills

39. The following terms - interchangeability of parts, division of labour, highly repetitive tasks - best
focus on ____.
a. Quality
b. Cost and efficiency
c. Quality
d. Time

40. Which of the following is generally related to service operations?

a. Tangible product
b. Need for flexible capacity
c. Separation of production from consumption
d. Large amount of inventory

41. A service encounter includes

a. Face-to-face interaction
b. Customers and a building
c. Customers and advertising
d. All of the above

42. Which function typically employs more people than any other functional area?
a. Information Systems

b. Operations
c. Marketing
d. Finance

43. A measure of the success of an operation in producing outputs that satisfy customers is
a. Efficiency
b. Effectiveness
c. Quality
d. Profitability

44. A measure of the success of an operation in converting inputs to outputs is

a. Efficiency
b. Effectiveness
c. Quality
d. Profitability

45. The inputs to a transformation process include all of the following except
a. Materials
b. People
c. Assembly
d. Information

46. Characteristics of services include which of the following?

a. Close proximity to the customer
b. Simultaneous production and consumption
c. Inability to inventory

d. All of the above

47. Which of the following would not be an operations activity in a fast-food restaurant?
a. Advertising new salad dishes
b. Purchasing tomatoes
c. Planning the layout of the serving areas
d. Cooking hamburgers and fries

48. ____ is an example of a pure good.

a. Restaurant
b. Dentist
c. Coal mining
d. Education

49. Which term defines the process of project compliance with policies and procedures?
A. Quality control
B. Quality assurances
C. Quality audits
D. Quality control management

50. Which process does QA provide and umbrella for?

A. Continuous process improvement
B. Quality assurance
C. Project management plan
D. Quality baseline

51. Which of the processes includes all activities of the performing organization that determines policies
and responsibilities of a project?
A. Performance quality control
B. Project quality management
C. Performance plan management
D. Quality control management

52. Which of the following are negative possibilities if quality requirements are not met?
A. Overworking team members and poor product quality
B. Customer complaints and late product
C. Poor quality
D. Termination

53: Which of these terms apply to identifying quality standards and how to satisfy them?
A. Quality projections
B. Quality management
C. Quality planning
D. Quality overview

54. Which of the following definitions apply to the cost of quality?

A. Left over product
B. Total cost of all project efforts
C. Customer satisfaction
D. Redoing entire project

55. EOQ model is based on the assumption that unit price is fixed.
True

False
Statement is wrong

56. Obsolescence cost is :A. Due stock on hand

B. Due stock on hand, part no. / Name

57. Set-up cost comprises of :A. Idle time cost

B. work-order cost
C. work order cost, idle time cost

58. Quantity discounts reduce:A. Procurement cost

B. Marginal cost
C. Total cost

59. The document which is prepared by the engineering department is :A. Above statement is wrong
B. There is no bill required
C. Bill of material

60. Which of the following is not the external factor influencing materials planning?
A. corporate objective
B. planning objective

61. Down time means ________.

A. Time required by equipment to become none of use
B. time required by equipment to become not ok
C. Time required by equipment to become OK

62. Security deposit means :A. Amount as reserve-part kept by scarp contractor for final adjustment
B. Amount as received-part kept by scarp contractor for first adjustment
C. Amount reserve-part was not kept by scarp contractor

63. Identifying technical, financial, managerial and quality assurance capability of the vendors and
thereby generate data to serve basis for preliminary source selection is:A. Source of investigation stage
B. only Investigation stage
C. Both above
D. None of these

64. ________specification is usually flexible and can be altered during consultation with different
manufacturers of the equipment.
A. Material
B. wood Equipment
C. Equipment
D. All of the above

65. Issues to top up supply to pre-fixed levels of items are:A. Legal issues
B. Imprest issues

C. Financial issues

66. Requests for price increase are received on account of the following reasons :A. Increase in cost of raw materials and bought out parts
B. Changes in tax structure
C. Added work content
D. Increase in cost of raw materials and bought out parts , Changes in tax structure , Added work content

67. Select the Blank Stock held by company represents ________.

A. House
B. Money
C. Measurements
D. All of above

68. Method suitable for items which is either of purely Seasonal is ________.
A. Sometimes buying
B. Weekly buying
C. Seasonal buying

69. The buying which is received in staggered lots, each lot at times may equal EOQ is :A. Contract buying
B. contract selling
C. Both

70. Supplier's request for price increase should be analyzed patiently by the buyer. A curt 'no' or 'negative'
reply spoils relationships.
A. True

B. False

71. In instantaneous replenishment system, production rate is________.

A. Minimum
B. Little bit
C. Infinite

72. In MRP-1, manufacturing cycle of finished product is________.

A. Long
B. short
C. Medium

73. Materials department is service department.

A. True
B. False

74. Value analysis is necessary when company's profits soars.

A. True
B. False

75. Following special schemes are announced by Indian Government Under which import can be
permitted at zero duty or at less duty:A. Export promotion capital goods scheme
B. Diamond & Jewellary promotion scheme
C. Import by 100% export oriented units
D. Export promotion capital goods scheme, Diamond & Jewellary promotion scheme, Import by 100%
export oriented units

1-d

2-d
14-c
26-b
38-a
50-a
62-a
74-b

3-b
15-d
27-a
39-b
51-b
63-a
75-d

4-a
16-c
28-b
40-b
52-a
64-c

5-d
17-a
29-d
41-d
53-c
65-b

6-c
18-d
30-d
42-b
54-b
66-d

7-c
19-a
31-c
43-b
55-a
67-b

8-c
20-d
32-b
44-c
56-b
68-c

9-d
21-d
33-a
45-c
57-c
69-a

10-d
22-d
34-c
46-d
58-a
70-a

11-d
23-b
35-a
47-a
59-c
71-c

12-c
24-a
36-a
48-c
60-a
72-a

13-d
25-c
37-a
49-c
61-c
73-a