C720 Operations and Supply Chain Management Practice Questions - Set 1 - Part 2

Test your knowledge of Operations and Supply Chain Management concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 21: A forecasting model that involves soliciting input from a group of experts to reach a consensus is known as:

a) Survey method

b) Delphi Technique

c) Buildup method

d) Test market analysis

Question 22: In the context of demand types, what type of demand is most likely driven by holiday events like Christmas?

a) Peak demand

b) Seasonal demand

c) Unexpected demand

d) Chase demand

Question 23: If a company's product has a high cost of failure and customers are highly sensitive to quality, which approach should the company take to ensure quality?

a) Lean production

b) Total Quality Management (TQM)

c) Process improvement

d) Aggregate planning

Question 24: Which type of layout is most suitable for a company that produces large volumes of identical products with minimal variation?

a) Process-oriented layout

b) Product-oriented layout

c) Cellular layout

d) Fixed-position layout

Question 25: What is the main purpose of an Economic Order Quantity (EOQ) model?

a) To minimize total inventory costs

b) To maximize production output

c) To increase vendor relationships

d) To improve order scheduling accuracy

Question 26: When inventory is tracked continuously with real-time updates on inventory levels, the system is known as:

a) Periodic inventory system

b) Perpetual inventory system

c) Economic order quantity (EOQ)

d) Vendor managed inventory (VMI)

Question 27: A manager is working on identifying the bottleneck in a production line. What is the primary characteristic of a bottleneck?

a) It is the most productive part of the process

b) It restricts the overall capacity of the process

c) It produces the least amount of defects

d) It improves production speed

Question 28: When a product is designed to ensure it can perform as intended under a variety of conditions, this focus on reliability is a key aspect of which concept?

a) Performance

b) Conformance

c) Reliability

d) Aesthetics

Question 29: Which of the following is most commonly associated with reducing waste in the production process?

a) Agile methodology

b) Lean principles

c) Capacity planning

d) Forecasting methods

Question 30: Which of the following best describes Vendor Managed Inventory (VMI)?

a) The retailer handles all inventory decisions and orders as needed

b) The supplier manages inventory levels and orders for the retailer

c) Inventory is ordered only when stock reaches a minimum level

d) Inventory levels are checked periodically and adjusted accordingly

Question 31: In a supply chain, the strategy that uses real-time sales data to replenish stock at retail locations is:

a) Vendor Managed Inventory (VMI)

b) Reverse logistics

c) Safety stock

d) Batch processing

Question 32: A business is trying to identify key areas to improve by categorizing inventory items based on their dollar usage. This practice is known as:

a) Economic Order Quantity (EOQ)

b) Just-in-Time (JIT)

c) ABC analysis

d) Capacity utilization

Question 33: A firm wants to align with a supplier on an inventory strategy where the supplier holds stock on behalf of the firm and restocks as needed. Which system is this firm likely implementing?

a) Periodic review system

b) Perpetual inventory system

c) Vendor Managed Inventory (VMI)

d) Order point system

Question 34: Which of the following best describes the purpose of safety stock in inventory management?

a) To maximize order size

b) To serve as a buffer against demand variability

c) To replace outdated products

d) To increase profitability

Question 35: A company identifies an activity in its supply chain that does not add value to the customer and incurs costs. Which technique is used to address such activities?

a) Lean manufacturing

b) ABC analysis

c) Safety stock management

d) Capacity utilization

Question 36: An electronics company has highly unpredictable demand for new models with short product life cycles. Which supply chain strategy is most appropriate?

a) Lean supply chain

b) Agile supply chain

c) Push-based supply chain

d) Vendor Managed Inventory (VMI)

Question 37: In quality management, what does the concept of “fitness for use” refer to?

a) Conformance to design specifications

b) Ensuring products meet customer needs

c) Minimizing production costs

d) Improving delivery speed

Question 38: In a manufacturing setup, what type of layout would best fit an environment producing a high volume of standardized products with little variation?

a) Process-oriented layout

b) Product-oriented layout

c) Fixed-position layout

d) Functional layout

Question 39: A business seeks to lower lead time and enhance efficiency by simplifying the number of suppliers and focusing on long-term relationships. Which strategy is this most aligned with?

a) Agile supply chain

b) Vendor Managed Inventory (VMI)

c) Lean supply chain

d) Strategic alliances

Question 40: A company that prioritizes producing goods "just in time" to fulfill customer orders without holding excess inventory uses which approach?

a) Push system

b) Pull system

c) Vendor Managed Inventory (VMI)

d) Lead system

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