Sixth Semester Management MCQ’s Materials Management

TOPIC 6: MATERIALS MANAGEMENT

Sr. No. Statement Option (a) Option (b) Option (c) Option (d) Ans

_____________________________ is the process of planning, procuring,

Financial Materials Operation Marketing
1 storing and providing the appropriate material of the right b
management management management management
quality, right quality at the right place in the right time.

_____________________________ is a detailed list of movable items

which are required for manufacturing products and
2 Inventory Production Purchase None of these a
maintaining the equipment and machines in good working
order.

3 Inventory consists of _______________________________________________. raw material work in progress finished products all of these d

_____________________ inventory includes purchase of raw material,

4 semi-finished components, standard components or/and Raw material In-process Finished product Indirect a
subassemblies from suppliers.

_________________________ inventory includes the finished products

5 Finished product Raw material In-process Indirect a
lying in the warehouse and waiting for dispatch.

_________________________ inventory consists of semi-finished

6 Finished product Raw material Indirect In-process b
components.

Annual Annual Annual Annual

In ABC analysis which inventory is classified into category ‘A’
7 consumption cost consumption cost consumption cost consumption cost b
items?
is around 15-25% is around 70-80% is around 5-10% is around 50%

Annual Annual Annual Annual

In ABC analysis which inventory is classified into category ‘B’
8 consumption cost consumption cost consumption cost consumption cost a
items?
is around 15-25% is around 70-80% is around 5-10% is around 50%

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 Sixth Semester Management MCQ’s Materials Management

Annual Annual Annual Annual

In ABC analysis which inventory is classified into category ‘C’
9 consumption cost consumption cost consumption cost consumption cost c
items?
is around 15-25% is around 70-80% is around 5-10% is around 50%

Complex and expensive parts are items that require strict

10 Items A Items B Items C None of these a
management and control are called ____________.

Low complex and low cost items that are typically commercially
11 available and require little managerial control are called Items A Items B Items C None of these c
______________.

In a car assembly factory, the high value items like engine are
12 Items A Items B Items C Items D a
considered as ___________.

Items like nuts, bolts, screws etc. for a car assembly factory are
13 Items A Items B Items C Items D c
considered as ____________.

_____________ is defined as "the optimal quantity of orders that

14 minimized total variable costs required to order and hold ABC TQM MRP EOQ d
inventory."

How much should

Who should we Whom should we Why should we
While deciding how to manage inventory, the question to be we order and how
15 order and when order and how order and when a
answered is _____________________________________. often should we
should we order? should we order? should we order?
order?

EOQ is a formula that determines the _____________ at which the

16 combination of procurement costs and inventory carrying costs Quality Cost Profit Quantity d
are the least

The purchase
The rate of price of the items
Which of the following is not correct assumption in calculating The ordering cost demand/consump The lead time is does not change
17 c
EOQ? is constant tion does not not fixed with quantity i.e.
change no discount is
available

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 Sixth Semester Management MCQ’s Materials Management

Cost of processing
Cost of following
Cost of receiving quotation and
18 Procurement costs consist of ______________________________. up and expediting All of these d
quotations issuing purchase
purchase order
order
Each event of ordering has a certain cost associated with it
19 Procurement cost Carrying cost Holding cost None of above a
called _________________________________.
Cost of receiving,
Transportation Cost of processing
20 Which of the following is not procurement cost? inspecting and Storage cost d
cost vendor’s invoice
stocking material
Interest on capital Up-keep of
21 Carrying cost consists of __________________________. Storage cost All of these d
investment inventory
increase as you decrease as you increase as you
22 Carrying (holding) cost ________________________________________. hold more and hold more and hold few None of these a
more inventory more inventory inventories
increase as decreases as decreases as
23 The procurement costs _________________________________. quantity ordered quantity ordered quantity ordered None of these c
increases decreases increases
Make-to-stock Purchase-to-stock Departmental
24 EOQ can be used by ________________________________. All of these d
manufacturer distributors stores
To ensure quality To procure To procure
To procure wrong
25 The objective of purchasing is __________________________________. of purchased material in high material at high b
material
material material price

To procure To develop To develop

26 Which of the following is not objective of purchasing? material at reliable sources of alternating To facilitate waste d
reasonable price supply sources of supply

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 Sixth Semester Management MCQ’s Materials Management

The quantity
material and
The quality of the
The specification supplies Inventories
finished product
of the material to purchased must be throughout the
27 Which of the following is wrong? largely depend d
be purchased must such that supply chain are
upon the quality of
be constant production as high as possible
material used
schedule is not
disrupted

The main function of purchasing department is:

1. Keep record of reliable and also alternative source of supply
28 2. Maintain update pricelist of all material All Only 1 and 2 Only 2 and 3 Only 2 and 4 a
3. Ensure uninterrupted supply of material
4. Preparation of purchasing budget

Prepare a
Prepare a list of comparative
Exact quantity of
suppliers who deal Pen the quotations statement of the,
Whenever a department needs an item, it is officially brought to material to be
with the business at prescribed time terms and
29 the notice of the purchasing department by filing a purchase purchased and its a
of the articles to on the prescribed conditions
requisition from. The next step is- specification is
be purchasing and date mentioned in the
decided
are reliable quotation and then
analyze them

Put the following in chronological order while purchasing

material
1. After receiving the purchase requisition forms, exact quality
of material to be purchased and its specification are decided
30 2. Call for quotation at prescribed time 1,2,3,4 1,3,2,4 2,4,3,1 1,4,3,2 b
3. Then prepare a list of suppliers who deal with the business of
the articles to be purchased and are reliable
4. Request for supply is made on prescribe quotation from to all
the selected source of supply

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 Sixth Semester Management MCQ’s Materials Management

Arrange the following in chronological order while purchasing

material
1. Receive purchase requisition from department
31 1,2,,4,3 3,4,2,1 2,1,4,3 4,2,1,3 a
2. Call for quotation
3. Inspect the material
4. Place purchase order

Arrange the following in chronological order while purchasing

material.
1. Place order
32 1,3,2,4 1,2,3,4 1,3,4,2, 4,3,1,2 c
2. Payment of bill
3. Receive material
4. Inspection

Prepare a
If necessary,
comparative
request for Open the
To achieve statement of the
quotation is made quotations at
integration with rates, terms and
33 Which of the following is not a step in purchasing? on prescribed described time on b
other departments condition
quotation form to the prescribed
of the company mentioned in the
all the selected date
quotations and
sources of supply
then analyze then

34 The modern technique of material management is _______________. ISO MRP TQM EOQ b
35 The modern technique of material management is _______________. ISO TQM EOQ ERP d

__________ is a planning technique that calculates material

36 requirement and schedule supply to meet changing demand TQM ISO MRP QA c
across all product and parts.

Inventory record
37 Which of the following is not input to MRP? ERP BOM MPS a
file

To calculate what To calculate how To calculate when

38 Which of the following is function of MRP? parts should be many of these must these parts All of these d
made or bought parts do we need be available

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 Sixth Semester Management MCQ’s Materials Management

MRP insures that

materials and
MRP takes
components are MRP takes
information from
39 Which of the following statement is wrong about MRP? available on the information from None of these d
the bill-of-material
right quantities MPS
(BOM)
and at the right
time

The master production schedule is a list of-

1. What end products are to be produced?
40 Only 1 Only 1 and 2 Only 2 and 3 All of these d
2. How many of each product is to be produced?
3. When the products shall be ready for shipment?

__________ is a list of component part and sub-assemblies needed

41 MPS MRP BOM ERP c
to produce the final product.

The Bill of Materials (BOM) provides-

1. A product structure (tree)
42 Only 1 Only 2 Both 1 and 2 None of these c
2. List of what is needed for each component, sub-assembly and
assembly

____________________ is the time required to manufacturer or

43 EOQ BOM Lead time ERP c
purchase a component or assembly.

The _________________ keeps track of the inventory status for each Inventory record
44 Lead time BOM Product structure c
item in the database. file

Inventory record Production

45 Which of the following output of MRP? BOM MPS d
file schedule

Improved direct
Reduced inventory Improved
46 Which of the following are benefits of MRP? labour All of these d
with fewer storage customer service
productivity

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 Sixth Semester Management MCQ’s Materials Management

Reduced inventory Improved reduced

47 Which of the following is not benefit of MRP? Improved quality c
with fewer storage customer service purchasing cost

____________ is a computer-based system decision to streamline

48 and integrate various operation and information flows in the MRP ERP MPS TQM b
company.
Instead of each department having its own database of
49 information, _____________ puts all of the information into a single MRP MPS BOM ERP d
place.
A sales person can access the warehouse, inventory and
50 delivery to give a customer a quick update on the status of his MRP MPS BOM ERP d
order through _____.

ERP is an
integrated system
which functions in Each module has Each department
It has a common
51 Which of following is not features of ERP? real time not the different look is able to access c
data base
requiring you to and feel the system
depend on
periodic updates
The planning of
the company can
be done with use
ERP synergizes
of this system ERP has common
52 Which of following is feature of ERP? the resources of an All of these d
since it contains all data base
organization
the necessary
decision making
information
Economic order quantity of material takes into account
53 Carrying cost Lead time re- order level Maximum level a
ordering cost and ______________________.

In ABC system of inventory control, the material is divided in A, Consumption Re-order level of Maximum level of
54 Material quantity b
B and C categories on the basis of _________________________. value of material each material material
55 Order cost and carrying cost are _____________ cost in nature. Fixed Variable Semi-variable Indirect b

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 Sixth Semester Management MCQ’s Materials Management

__________________ of ERP gathers financial data from various

Human resource Production Purchasing
56 functional departments, and generates valuable financial Financial module a
module module module
reports.
___________________ of ERP maintains a complete employee data
Human resource Production Purchasing
57 based including contact information, salary details, attendance, Financial module b
module module module
performance evaluation and promotion of all employees.

__________ of EPR streamlines procurement of required of raw Human resource Purchasing Production
58 Financial module c
material. module module module
59 What are the functions of materials management? Material planning Purchasing Store management All of these d
A well-coordinated material management programme may increase in decrease in
60 cost increase cost reduction c
result into ___________________________. inventory inventory

loss due to cost to be paid to cost of handling cost of handling

61 Material handling cost means _____________________________________. d
deterioration costumer material material

cost required for

cost of packing of cost to be paid to
62 Freight cost means ________________________________________________. movement of inspection cost c
material. customer.
material.

information about
Market research is necessary for to get excessive material market condition goods stored in
63 required inventory b
___________________________________. in advance. and availability of plant
material.

cost required for

cost of packing of cost to be paid to
64 Packing cost means ______________________________________________. movement of inspection cost a
goods customer
material.

Cost of insurance Cost required for

Cost to be paid to Cost of packing of
65 What do you mean by insurance cost? of goods while movement of a
costumer. material.
they are in transit. material.

availability of
Inventory control means timely availability value analysis of
66 material at low all of these d
________________________________________________. of materials costly materials
cost

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 Sixth Semester Management MCQ’s Materials Management

Evaluation and development of reliable supplies is a function of materials production

67 sales department None of these a
_______________________________________. management department

Material planning is based on data from ________________

68 sales production purchase finance a
department

A detailed list of all kinds of goods handled by business is called

69 production design inventory operation research c
______________________.
Finished goods means goods waiting for dispatch to
70 customer supplier purchase none of these a
__________________.
Raw material includes semi – finished
71 material in stores sub-assemblies All of these d
_____________________________________________________. components

part which is sub- assemblies

semi- finished
72 What do you mean by finished part? ready to dispatch material in stores purchased from a
components
to customer suppliers
Inventory consists of
73 raw material indirect material work in progress all of these d
_______________________________________________________.
Excess inventory may lead to
74 profit loss less space none of these b
______________________________________________.
75 Excess inventory needs _____________________________________. more funds less funds less space none of these a
Tools, lubricant, cutting fluids are
76 indirect materials direct materials work in progress none of these a
_____________________________________.
ABC analysis helps senior manager to control
77 inventory cost purchase cost total cost none of these a
_________________________.
78 Which are the most important items in ABC analysis? A items B items C items None of these. a
__________________ helps managers to have selective control and
79 focus attention only on important items required for ABC analysis EOQ Inventory control None of these a
production.
80 A' class of items have _____% of total consumption cost. 10 to 20 20 to 30 40 to 50 70 to 80 d
81 C' class of items have ______% of total consumption cost. 50-60 40-50 15-May 70-80 c
82 Annual _______ cost = unit price x annual consumption volume. consumption protection investment none of these a
First step in preparation of ABC analysis is preparation of list determine unit get annual
83 none of these a
______________________________. of all items price consumption

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 Sixth Semester Management MCQ’s Materials Management

Various costs associated with ordering and receiving of goods

84 procurement cost inventory cost holding cost none of these a
are called ________________________________________.
85 Holding cost is also known as __________________________. receiving cost caring cost producing cost design cost b
Procurement cost is obtained by plotting _____________ against
86 cost investment profit none of these a
ordered quantity.

Purchasing is one of the function of ___________________

87 production materials design none of these b
management.
88 _______________________ means procuring goods and services. Purchasing Selling Inventory None of these a
The _______________ provides the information about when to
89 MRP ERP inventory none of these a
order and how much to order.

The expenses on travelling may be an element of

90 holding fixed procurement none of these b
__________________ cost.

The lists of components that make up a final product are called

91 Bill of materials DOL ERP MRP a
_______________________________.
__________________ department floats enquiries and processes
92 Sales Purchase Production Inventory b
quotations.
enterprise reform enterprise enterprise
93 ERP stands for ___________________________________________. none of these b
planning resource planning resource plan
94 ________ is an integrated system to manage business. ERP MRP DOL EOQ a
sales and
95 Which one of the following can be an ERP module? human resource finance All of these d
marketing
96 Which is the function involved in material management. Purchasing Story Distributing All of these d
Inventory Finance Marketing Human Resource
97 _____________________________ is a part of material management. a
management management management management

________________________ is the collective stock of items which is

98 Purchase Inventory Tool room None of these b
required for routine functioning of industry.

The stock of material, maintain in order to avoid ‘no stock’

99 additional stock extra stock buffer stock none of these c
situation is called as _____________________.

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6.10
 Sixth Semester Management MCQ’s Materials Management

Insures
Proper purchasing Preventing stock
100 Which is the function of inventory? availability of All the above d
guidelines out
material
inventory
101 ABC analysis is the _________________________ concept. finance HR administration b
management

Determining unit Arranging item in Deciding the Preparing the list

102 Which is the first step in ABC analysis? d
price deciding order policies of all items
103 In EOQ ________________ quantity is ordered. Minimum Maximum Optimum Average c
Inventory carrying
104 Which is not the cost concerned with EOQ? Procurement cost Total cost Primary cost d
cost

In graphical method of EOQ, the cost which is represented as

105 Procurement cost Inventory cost Total cost Carrying cost b
straight inclined line is _____________________________.

Cost of placing One stock out is Rate of demand is Uniform demand

106 Which is the assumption in EOQ? d
order is variable allowed not known to us of the item

Procurement cost per order includes Cost of calling Cost for receiving
107 Cost of inspection All of these d
___________________________________. quotations material
When any item is out of stock then _________________ cost
108 Overstocking Under stocking Out of stocking None of these b
involves?
When stock is more than the required then ___________ cost
109 Under stocking Over stocking More stock None of these b
involves?
Annual consumption of the item is represented by ________ in
110 A AC S None of these c
EOQ.
111 Economic order quantity is represented by __________. Qo Eo Eq None of these a
confused
112 Buffer stock is nothing but __________________________. new stock safety stock unnecessary stock b
inventory

Production
113 What will happen when there is no buffer stock? Delay in deliveries Loss of reputation All of these d
stoppage

Calling quotations, order follow-up, material receiving, placing

114 quality purchase inventory Marketing b
PO are the functions of ______________________ department.

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 Sixth Semester Management MCQ’s Materials Management

115 PO in materials management means? Placement officer Post officer Purchase order None of these c
The logic of ______ is based on the principle of dependent
116 MRP MRP II ERP SAP a
demand
117 _______ determine quantity and timing for material planning. MRP II ERP SAP MRP d
Current Order history and
118 Which is the input to MRP? Bill of material All of these d
forecasting season

Enterprise Entry restricted Energy resources

119 ERP means _____________________________________ None of these a
resource panning products product
________________ uses all resources of the enterprise in a
120 MRP MRP II ERP None of these c
systematic way.
Storage
121 Which are the functions in materials management? Planning Warehousing All of these d
management

________________________ can be defined as an attempt to balance

Financial Marketing Inventory
122 inventory needs and requirements with the need to minimize None of these c
management management management
costs resulting from obtaining and holding inventory.
_____________ include raw material and semi-finished products
In-process Finished Indirect
123 supplied by another firm and which are raw items for the Raw inventories a
inventories inventories inventories
present industry.
____________________ involves semi-finished goods various stage of In-process Finished Indirect
124 Raw inventories b
manufacturing cycle. inventories inventories inventories
ABC analysis plays a vital role in _____________________
125 Finance Inventory Human Resource Marketing b
management.
Arranging the Determine unit Preparing the list
126 Which is the first step in ABC analysis? None of these c
items price of all item

Economic order Economic order Economics order

127 EOQ stands for _______________________________. None of these a
quantity quality quality

Lead time is
128 What is an assumption in EOQ? known and is Total cost Primary cost All of these a
constant

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 Sixth Semester Management MCQ’s Materials Management

_______________ avoid effects like price fluctuation and shortage of

129 Buffer stock EOQ Bothe a and b None of these b
material in the market.

If the cost of
EOQ avoids Inventory EOQ does not
product is reduced
130 Which of the following options is an advantage of EOQ? running out of maintenance cost support longer a
then EOQ is not
stock is reduced lead time
applicable

EOQ does not work, if _________________ order quantity is

131 maximum minimum smaller None of these b
company.
__________________ function can be defined as procuring different Purchase
132 Purchasing Purchase order All of these a
types of material for an organization from different sources. department

The purchasing function plays the role of mediator between organization, vendors,
133 vendors, control none of these c
____________ and __________________ for purchase of material. control organization

Analysis of
Maintenance of Issuing the Making request for
134 Which is the first step in purchasing? purchase d
records and files purchase order quotations
requisition

The important functions of purchase departments are preparation of track pending issue and follow
135 all of these d
__________________________. purchasing budget purchase order up purchase order

__________________________ is set of activities that ensure right

136 Procurement Purchasing Production Placement a
material at right quality and quantity in right time.
137 Procurement activity is __________________ and takes more time. simple complicated difficult Easy b
________________________ is an intelligent activity includes decision Purchasing
138 Purchasing Procurement Purchase order c
making, selection of vendors etc. department

________________ is just a transaction and is basic activity of

139 Purchasing Placement Procurement Purchase order a
purchase department.

Material Material
Material required Material resources
140 MRP means _________________________________________. requirement requirement b
planning planning
process planning

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 Sixth Semester Management MCQ’s Materials Management

Enterprise Enterprise
Enterprise
141 ERP means ____________________________________. resources resources None of these a
resources process
planning planning
For staffing, inventory production etc. company develops and
142 MPS MRP EPS ERP a
design a plan called as ________.

master production
The inputs to MRP are inventory record
143 schedule and bill-of material file all of these d
______________________________________________________. file
order data

_____________ is a plan that views future production of end of

144 MPR MPS ERP None of these b
product.
_____________________________________ is made up of list of the sub-
Master production Inventory record Material resource
145 assemblies as well as components that makes up the end Bill-of-material c
schedule file Planning
product.
Inventory record file also called as Inventory record
146 Item master file Bill-of-material file None of these a
____________________________________. file

___________ can be defined as an integrated information system

147 MRP MPS ERP SAP c
that serves all departments within an enterprise.

Material Material
The SAP ERP product is very popular for material management Enterprise Material resource
148 requirement management d
called as _____________________________________. Resource Planning planning
planning module

149 Sales and marketing is module of ________. ERP MRP SAP None of these a
___________________ meet regularly, usually once a week for an Quality circle
150 TQM members Quality team 5S members b
hour, under the guidance of their leader. members
financial,
An objective of inventory management includes property operative and
151 financial operational d
________________________ objectives. protection property
protection
Identify the system, which show the essential elements used in
152 Master Production Schedule as its basis for any material control MRP ERP EOQ ABC analysis a
system.

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 Sixth Semester Management MCQ’s Materials Management

ABC analysis divides an organization on hand inventory into annual annual the number of
153 unit price a
three classes based upon __________________________________________. consumption value consumption units on hand
The process or approach as seen in the figure, attempts to
consolidate all of a company’s departments and functions into a
154 single computer system that services each department’s MRP MRP-II ERP EOQ c
specific needs. Identify the system.

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 Sixth Semester Management MCQ’s Materials Management

They are now

They have a
shifting gears to
They have been virtual
They have a huge develop
slow to develop stranglehold on
155 Pick the false statement about ERP vendors installed base of applications for c
offerings related "back-office"
customers good electronic
to e-commerce functions such as
commerce
order fulfillment
websites
(a) Minimum stock (a) Minimum stock (b) Minimum (b) Maximum
In this Stock control chart, label the maximum stock level and level level stock level stock level
156 a
minimum stock level – (b) Maximum (c) Maximum (c) Maximum (c) Minimum stock
stock level stock level stock level level

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 Sixth Semester Management MCQ’s Materials Management

157 Which of the following methods of stock control aims at Perpetual Material turnover
Level setting ABC analysis d
concentrating efforts on selected items of material? inventory system ratio
From the EOQ, label the cost at point 1 and 2.

(1) Ordering cost (1) Storage cost (1) Inventory cost (1) Ordering cost
158 a
(2) Storage cost (2) Ordering cost (2) Ordering cost (2) Inventory cost

The table below shows the list of items as per their annual
159 consumption and annual consumption value. Can you identify Control analysis Cost analysis Pareto analysis None of the above c
which type of analysis is this to have proper inventory control?

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 Sixth Semester Management MCQ’s Materials Management

The figure shows a graphical method for determining the order

quantity which attempts to minimize total inventory cost.
Which is this tool used to answers the following questions.
(1) How much should I order?
(2) How often should I place each order?

160 EOQ ABC analysis Control chart ERP a

Ups and downs in consumption and delivery period are Procurement

161 Buffer stock EOQ None of these a
absorbed by _______________________________. strategy
Between (b) and Between (a) and
162 In this Stock control chart, label the buffer stock – (a) (c) a
(c) (b)

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 Sixth Semester Management MCQ’s Materials Management

________________________________ is set of activities that ensure right

163 Procurement Purchasing Planning Procedure a
material at right quality and quantity in right time.
From the graph of graph of inventory level versus time, the
value Q/2 is called __________________.

Zero value
164 Final inventory Average inventory Total inventory b
inventories

In EOQ, annual ____________________ cost = unit price * annual

165 Consumption Protection Investment None of these a
consumption volume.

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 Sixth Semester Management MCQ’s Materials Management

From the graph, the point Q at which slope = 0, is called

__________________________.

Economic Order
166 Quantity Order Quantity Quality c
Quantity

capacity MRP computer

inventory record,
inventory record, requirements program, master
The principal files that are incorporated into a computerized master file, part-
167 master schedule, planning file, schedule, capacity a
MRP system are: period balancing
BOM. master schedule, requirements
program.
inventory record. planning file.
Identify this basic inventory control technique which is often
applied to almost all aspects of materials management.

168 Pareto analysis Tally Table EOQ Control chart a

A producer of consumer goods wants to analyze its product

range from product 1 to product 13. The management has
G1 – A items G1 – B items G1 – C items G1 – C items
decided to use the annual consumption value (ACV) as the key
169 G2 – B items G2 – C items G2 – A items G2 – C items a
figure to assess the product range. An ABC analysis is done and
G3 – C items G3 – A items G3 – B items G3 – A items
the raw data is order in decreasing order of ACV. How have
they classified the product group in A, B and C category items?

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Sixth Semester Management MCQ’s Materials Management

Designed & Developed by – S. K. Rawat

6.21