1.

Which one of these forecasts is a quantitative forecast method

B. Jury method

C. Delphi method

D. Market research

Answer: A

2. In the time series forecasting method, the level, trend and season factor are 8000, 540 and 0.75,
then the systematic component in the mixed method is

A. 8540.75

B. 3240000

C. 6405

D. 8405

Answer: C

3. The monthly demand of 100 gm Cinthol Soap experienced by a supermarket for the last six
months happens to be 176, 168, 202, 220, 166 and 180. Demand 180 is for the most recent
month. What will be the forecast of 100 gm Cinthol Soap in the coming month if a 3-period
moving average method is employed?

A. 182

B. 196.66

C. 196

D. 188.66

Answer: D
4. In trend – corrected exponential smoothing method, with no seasonality, then the systematic
component of demand is equal to

A. Level + trend
 B. Level X trend

C. Level – Trend

D. Level / Trend

Answer: A
5. For products exhibit random fluctuations, seasonal fluctuations, both seasonal and trend growth
or decline , then the forecasting techniques used should be

A. Trend and Seasonality adjusted forecasting, simple moving average or simple exponential
smoothing, seasonality-adjusted exponential smoothing

B. Seasonality-adjusted exponential smoothing, Trend and Seasonality adjusted forecasting,

C. Simple moving average or simple exponential smoothing, seasonality-adjusted exponential

D. None of these

Answer: C
6. In Vendor rating benefits, which one of these is NOT true

A. Comparison of Vendors

B. To identify Best performing suppliers with rewards

C. Identify the non performing suppliers and remove them

D. None of these

Answer: D
7. Which one of these is NOT an inventory based on physical characteristics

A. Raw Materials and purchased parts

B. Work in process goods

C. Finished goods

D. Machinery
 Answer: D
8. The inventory that is carried to buffer against the event that may not happen is called as

A. Safety Inventory

B. Seasonal Inventory

C. Pipeline inventory

D. Hedge inventory

Answer: D
9. When the customer is willing to wait for his order to be fulfilled, then the shortage cost incurred
due to additional administrative, transportation and handling cost is called

A. Lost sales cost

B. Backorder cost

C. Carrying cost

D. Demand cost

Answer: B

10. Calculate the ordering cost for 2liter coco cola bottles in a supermarket, where the annual
demand is 3000 bottles, lot size of delivery is 180 bottles/ lot and the order cost involved is Rs.60.

A. Rs.1000

B. Rs. 9000

C. Rs. 3.60

D. Rs. 60

Answer: A

11. Calculate the optimum order size for Britannia biscuits in a supermarket, when the total demand
for an year is 2500, order cost is Rs.18 per order and Inventory carrying cost is Rs 16

A. 5625
 B. 720000

C. 2812.5

D. 75

Answer: D

12. For a product X, the Safety stock calculated is 6, the average daily demand is 4pcs and the lead
time is 3 days, then what is the ROP for the product X?

A. 18

B. 27

C. 22

D. 13

Answer: A

13. What is the average demand during the lead time, when average weekly usage is 25 and the lead
time of the product is 7 days?

A. 105

B. 25

C. 7

D. 175

Answer: B

14. The “newsvendor problem” is a generic term used in managing inventory for

A. Products with Multiple period with certain demand

B. Determining the right number of stock

C. Long life cycle scenario

D. Seasonal selling
 Answer: B

15. Which one of these is NOT a technique in Selective inventory control

A. FSN

B. VED

C. VMI

D. ABC

Answer: C
16. Which one of these is NOT an objective of MRP system?

A. Maintain lowest possible level of inventory

B. Ensure inputs are available on time

C. Prepare delivery schedules and plan accordingly the manufacturing and purchasing

D. Supplier owns the inventory

Answer: D
17. To manufacture a chase, it requires 2 handles and 1 mould. The lead time for handle is 2 days
and for mould is 4 days. In one day 10 chases could be assembled. Then what would be the lead
time to produce 6 chases?

A. 24 days

B. 25 days

C. 4 days

D. 5 days

Answer: D
18. In logistics activity, the movement of finished goods from processing plant to the distribution
centers and retail stores is called as

A. Inbound logistics

B. Outbound logistics
 C. Network logistics

D. Driver logistics

Answer: B
19. In a decision of responding quick o the customers, a firm set ups more facility in terms of
warehouses and retail stores, which will

A. Minimize the operation and Maximize the transportation

B. Minimize the operation and Minimize the transportation

C. Maximize the operation and Maximize the transportation

D. Maximize the operation and Minimize the transportation

Answer: D
20. What would be the inventory carrying cost, when the total cost is Rs 67500, transportation cost is
Rs 26000 and cost incurred of losses and damages is Rs.7000

A. Rs 34,500

B. Rs 100,500

C. Rs 48,500

D. Rs 86,500

Answer: A
21. When a truck of Coco cola Starts from distributor carrying crates of new bottles to retailers in a
sequence by delivering the new ones and carrying the empty bottles in the same truck back to the
distribution center. This kind of shipping method is called as

A. Direct shipping network

B. Direct shipping with Milk run

C. Shipping via central distribution center

D. Third party logistics

Answer: B
22. The process of using a central facilitating center for collecting product from a suppliers and
carries again the filled containers with different products to the destination is called

A. Cross-docking

B. Hub and Spoke method

C. Milk run method

D. Distribution network design

Answer: A
23. The simplest way of sorting the pallets is

A. Floor storage

B. Rack storage

C. Container storage

D. Double deep storage

Answer: A
24. In simple exponential smoothing method, the range of the smoothing constant should be between

A. 0 to 10

B. 0 to 1

C. 1-9

D. 1-99

Answer: B
25. Which one of the below is NOT an assumption made when deriving an Economic Order Quantity
EOQ model?

A. Lead time does not vary

B. No quantity discounts

C. Each order is received in a single delivery

Answer: D
26. A company wants to generate a forecast for unit demand for year 2013 using exponential
smoothing. The actual demand in year 2012 was 120. The forecast demand in year 2012 was
110. Using this data and a smoothing constant alpha of 0.1, which of the following is the Forecast
for 2013?

A. 100

B. 110

C. 111

D. 114

E. 120

Answer: C

27. The actual demand of December month is 286 and the forecasted demand for December month
is 292, then by Naïve forecasting method, what is the forecast of the next month?
A. 266
B. 286
C. 310
D. 311

Answer: B

28. What is the forecasted error for the fourth month, when the actual demand for 1 st month is 322,
2nd moth is 262, 3rd month is 226, 4th month is 230.
A. -40
B. 40
C. 24
D. -24

Answer: A
29. Calculate a three-month weighted moving average forecast for April when demand for Jan is 21,
feb is 17 and Mar is 22, using a 0.4, 0.3, 0.2 waiting for March, February, and January,
respectively. Which of the following identifies the correct forecast for April using this method?
A. 18.1
B. 17.9
C. 20
D. 19

Answer- A

30. Which of the following statements about ABC analysis is NOT TRUE?

A. ABC analysis is based on the presumption that controlling the few most important items
produces the vast majority of inventory savings.

B. In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular
review by major decision makers.

C. In ABC analysis, "C" Items have minimal records, periodic review, and simple controls.

D. ABC analysis is based on the presumption that all items must be tightly controlled to produce
important cost savings.

Answer- D

31. JIT will fail if

ii. Difficulties in improving business operations of suppliers

iii. Business of suppliers is not understandable

iv. Storage space is high

A. i , ii, iii, iv

B. i,iii,iv

C. i,ii,iv

D. i,ii,iii
 Answer: D
32. ‘Self Certified’ suppliers or Green Channel status suppliers are the one

A. Whose products will not be quality inspected

B. Whose quality is consistent

C. Whose delivery performance is consistent

D. All the above

Answer: D
33. An example for high inventory turnover rate is

A. Book Stores

B. Super market

C. Electronic store

D. Automobile spare part dealers

Answer: B
34. Which one of these is NOT an inventory based on physical characteristics

A. Raw Materials and purchased parts

B. Work in process goods

C. Finished goods

D. Machinery

Answer: D
35. Work in process inventory or the inventory in transit is called as

A. Cycle inventory

B. Safety inventory

C. Pipeline inventory

D. Decoupling inventory
Answer: C