101. Which of the following constitute the elements of storing and warehousing costs?
1. Investment in store space and storage and retrieval systems
2. Software for updating the inventory status
3. Insurance costs for warehouse
4. Cost associated with ordering material
2. Software for updating the inventory status
3. Insurance costs for warehouse
4. Cost associated with ordering material
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 3 and 4
(d) 1, 2 and 3
(a) 1 and 2 only
(b) 2 and 3 only
(c) 3 and 4
(d) 1, 2 and 3
Answer: (d)
102. Additional investment in inventory to buffer against uncertainties in demand and supply of raw material and components is in the nature of:
(a) cyclic inventory.
(b) pipeline inventory.
(c) safety stock.
(d) decoupling inventory.
(a) cyclic inventory.
(b) pipeline inventory.
(c) safety stock.
(d) decoupling inventory.
Answer: (c)
103. In the context of maintenance, the spare parts repaired, reconditioned and put to use are categorized as:
(a) rotable spares.
(b) capital spares.
(c) maintenance consumables.
(d) insurance spares.
(a) rotable spares.
(b) capital spares.
(c) maintenance consumables.
(d) insurance spares.
Answer: (a)
104. Material Department reported Operation Manager that orders have Critical Ratio (CR) greater than 1. What does it mean?
(a) Order is behind schedule
(b) Order is on schedule
(c) Order is ahead of schedule
(d) Order is already cancelled
(a) Order is behind schedule
(b) Order is on schedule
(c) Order is ahead of schedule
(d) Order is already cancelled
Answer: (c)
105. Which one of the following is NOT correct in relation to ‘transportation inventories’?
(a) These are a part of the ‘transaction stock’
(b) The size of ‘transportation inventory’ is linked to length of the pipeline
(c) The size of the ‘transportation inventory’ is not linked to the rate of sale at the retail stock point
(d) Stock of ‘transportation inventories’ cannot be reduced
(a) These are a part of the ‘transaction stock’
(b) The size of ‘transportation inventory’ is linked to length of the pipeline
(c) The size of the ‘transportation inventory’ is not linked to the rate of sale at the retail stock point
(d) Stock of ‘transportation inventories’ cannot be reduced
Answer: (c)
106. Consider the following statements:
1. All obsolete items are non-moving in nature, while all non-moving items are not obsolete.
2. The problem of obsolete items is more acute with reference to spare parts.
3. Obsolete items cannot be used economically.
1. All obsolete items are non-moving in nature, while all non-moving items are not obsolete.
2. The problem of obsolete items is more acute with reference to spare parts.
3. Obsolete items cannot be used economically.
Which of the statements given above is / are correct?
(a) 1 only
(b) 2 and 3 only
(c) 3 only
(d) 1, 2 and 3
(a) 1 only
(b) 2 and 3 only
(c) 3 only
(d) 1, 2 and 3
Answer: (d)
107. Which one of the following statements is NOT correct?
(a) FIFO issue system cannot work if the items are stored randomly in a large warehouse
(b) The JIT concept of inventory management can prevent accumulation of excess inventory
(c) ZIN (Zero-inventory) system of inventory management does not imply literally ‘nil’ inventory
(d) The term ‘EOQ’ stands for efficient order quantity
(a) FIFO issue system cannot work if the items are stored randomly in a large warehouse
(b) The JIT concept of inventory management can prevent accumulation of excess inventory
(c) ZIN (Zero-inventory) system of inventory management does not imply literally ‘nil’ inventory
(d) The term ‘EOQ’ stands for efficient order quantity
Answer: (d)
108. Which one of the following statements in the context of ‘Letter of Credit’ is correct?
(a) It is an arrangement, whereby the obligation to pay the seller is undertaken by a bank
(b) The Letter of Credit need not necessarily specify any amount
(c) All Letters of Credit are revocable
(d) Revolving Letter of Credit refers to an arrangement whereby the bank undertakes to make payment to multiple sellers
(a) It is an arrangement, whereby the obligation to pay the seller is undertaken by a bank
(b) The Letter of Credit need not necessarily specify any amount
(c) All Letters of Credit are revocable
(d) Revolving Letter of Credit refers to an arrangement whereby the bank undertakes to make payment to multiple sellers
Answer: (a)
109. The duration from recognition of need till the purchase order is triggered off is called:
(a) Transit lead time.
(b) Administrative lead time.
(c) Pre-purchase lead time.
(d) Processing lead time.
(a) Transit lead time.
(b) Administrative lead time.
(c) Pre-purchase lead time.
(d) Processing lead time.
Answer: (b)
110. A.B.C. and V.E.D. analysis were performed for all the stored items in a factory. Three items, M, N and P, were found to be of A-type and vital, A-type and desirable and C-type and vital, respectively. In which one of the following descending order, will their service level be maintained?
(a) M-N-P
(b) N-M-P
(c) P-M-N
(d) P-N-M
(a) M-N-P
(b) N-M-P
(c) P-M-N
(d) P-N-M
Answer: (c)
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