C720 Operations and Supply Chain Management Practice Questions - Set 4 - Part 1

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 1: A company wants to ensure that its production process can handle varying customer demands by utilizing flexible scheduling and cross-trained employees. Which supply chain approach is best suited for this goal?

a) Lean supply chain

b) Agile supply chain

c) Just-in-time (JIT)

d) Vendor Managed Inventory (VMI)

Question 2: Which inventory model is used when a business places orders at regular intervals to maintain stock levels, often used by smaller businesses with less frequent monitoring needs?

a) Perpetual inventory system

b) Periodic inventory system

c) Economic Order Quantity (EOQ)

d) Just-in-time (JIT)

Question 3: In inventory management, what type of discount is applied when a company receives a reduced shipping cost for placing a large order?

a) Volume discount

b) Transportation discount

c) Bulk purchase discount

d) Quantity discount

Question 4: A food manufacturer produces products with very short shelf lives, such as fresh salads. Which supply chain strategy is most effective for minimizing waste and ensuring quick turnover?

a) Lean supply chain

b) Agile supply chain

c) Push system

d) Fixed-position layout

Question 5: Which forecasting method would be most appropriate for predicting demand in a situation with no prior data and high levels of uncertainty?

a) Exponential smoothing

b) Delphi Technique

c) Simple moving average

d) Trend analysis

Question 6: A manufacturer reduces setup times and arranges equipment to facilitate continuous production of similar products with minimal variation. This approach is associated with:

a) Continuous flow

b) Job shop layout

c) Process-oriented layout

d) Fixed-position layout

Question 7: What type of inventory includes goods that are ready to be sold to the end consumer?

a) Raw materials

b) Work-in-process (WIP)

c) Finished goods

d) Safety stock

Question 8: In a supply chain, a bottleneck represents:

a) The most efficient step in production

b) A step with the highest inventory turnover

c) A stage where production is slowed due to limited capacity

d) The point where customer orders are generated

Question 9: A company wants to ensure that its finished goods meet high standards by emphasizing “fitness for use.” This focus aligns with which quality dimension?

a) Durability

b) Conformance

c) Reliability

d) Quality function deployment (QFD)

Question 10: A business implements a safety stock strategy to protect against unexpected demand. What is the primary purpose of safety stock?

a) To increase supplier reliability

b) To reduce lead time

c) To serve as a buffer against stockouts

d) To maximize inventory turnover

Question 11: When using a cause-and-effect diagram to identify the root causes of a quality issue, the categories commonly include:

a) Materials, machinery, methods, and environment

b) Lead time, inventory, transportation, and demand

c) Employees, suppliers, customers, and stakeholders

d) Inventory levels, production rates, supply chain, and sales

Question 12: A company that builds custom-designed furniture with specific customer requirements would most likely use which production layout?

a) Product-oriented layout

b) Continuous flow layout

c) Job shop layout

d) Assembly line

Question 13: A company implementing Kaizen events is primarily focused on:

a) Reducing production capacity

b) Eliminating waste and improving processes

c) Increasing safety stock levels

d) Enhancing customer satisfaction through surveys

Question 14: In which inventory system does the vendor take responsibility for managing the retailer’s stock levels and ensures timely replenishment?

a) Periodic inventory system

b) Perpetual inventory system

c) Vendor Managed Inventory (VMI)

d) Economic Order Quantity (EOQ)

Question 15: Which strategy aims to avoid excess inventory by producing items only in response to actual customer demand?

a) Push system

b) Just-in-time (JIT)

c) Economic Order Quantity (EOQ)

d) Safety stock system

Question 16: In a lean production environment, which tool is used to visually track the flow of materials and information across each stage of production?

a) Value stream mapping

b) Control chart

c) Fishbone diagram

d) Scatter plot

Question 17: A company implements Statistical Process Control (SPC) to monitor the consistency of its product quality. Which tool is commonly used in SPC to track process variation?

a) Run chart

b) Control chart

c) Histogram

d) Pareto chart

Question 18: A company produces items in specific quantities to receive a discount, resulting in lower per-unit costs. This approach aligns with which inventory model?

a) Just-in-time (JIT)

b) Quantity discount model

c) Economic Order Quantity (EOQ)

d) Safety stock system

Question 19: Which type of demand results from planned events like promotional campaigns or holiday sales?

a) Seasonal demand

b) Unexpected demand

c) Peak demand

d) Chase demand

Question 20: A project manager wants to assess whether certain steps in a process contribute to most of the observed defects. Which tool is best suited for this analysis?

a) Scatter diagram

b) Pareto chart

c) Control chart

d) Fishbone diagram

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