i) Which one of the following is not included in the 5 R in purchasing?

a) Quality c) Price Answer: (d) ii) Which of the following is not a function of purchasing management? a) Selecting the source b) Quantity d) None of these

b) Placement of purchase order b) Physical controls of material

d) None of these Answer: (d) iii) The purchase order form is designed by a) Materials Manager

b) Purchase Manager b) Marketing Manager

d) None of them Answer: (b) v) The objective(s) of forward purchasing is / are a) To guard against interruption in supply b) To economize the use of storage space c) To guard against the future rise in price d) All of these Answer: (a) viii) JIT contributed to the a) Reduced inventories and WIP b) Reduced suppliers and vendors

c) Reduced information flows d) Reduced manpower planning Answer: (a) xii) Hedging technique is used a) When there is an organized commodity market b) Where large quantities of a particular commodity are bought and sold c) Both (a) and (b) d) None of these Answer: (c) i) Purchase Budget has an impact on a) b) c) d) Profitability of the company Materials Budget of the company Bill of materials All of these

Answer: (d) ii) Right quality means a) b) c) d) over specifying the quality standards for purchasers under specifying the quality for purchasing buying standard items Buying quality which suits the needs without incurring extra cost to the company

Answer: (d) iii) Purchase order is a legal binding contract only if it is a) accepted by the supplier

b) acknowledged by the supplier b) posted by the buyer

d) none of these Answer: (a) iv) JIT is a concept which means a) b) c) d) Japanese language Making a plan from time to time Getting the items just when they are needed for production Raising purchase order just before delivery.

Answer: (c) vi) The type of purchasing where the purchaser tries to protect himself by entering into two transactions a purchase and a sale contacts in two markets whose prices fluctuate is known as a) Speculative Buying

b) Forward Buying b) Hedging

d) Blanket order Answer: (c) xii) The parameters for vendor rating include a) Price

b) Service b) Delivery

d) All of these Answer: (d) xi) The type of purchasing where the purchaser tries to protect himself by entering into 2 transactions a purchase and a sale contacts in two markets whose prices fluctuate is known as a) hedging c) forward buying Answer: (d) b) speculative buying d) blanket order

iv) The document prepared on receipt of materials in store is known as a) MRN c) Challan Answer: (c) i) The system of purchasing from ones customer preferred to others is known as a) Forward Buying c) Reciprocal Buying Answer: (c) v) A stipulation in a contract of sale pertaining to goods which is essential to the main purpose of the contract is called a) Rejection b) Warranty c) Acceptance d) Condition. Answer: (d) vi) When the contract of agency is in writing it is called a) Law of agency b) Qui facit peractum facit per se c) Power of Attorney d) none of these. Answer: c vii) An arrangement whereby the obligation to pay an exporter is undertaken by a bank is called a) Bill of Landing b) Letter of Credit c) International Credit d) Hundi. b) Tender Buying d) Blanket Order b) GRN d) Bill of materials.

Answer: b viii) The type of buying most suitable for C strategy of items of inventory is a) Forward Buying b) Tender Buying c) Blanket Order d) Systems Contract. Answer: c

PART 2
1. Resources such as labor materials and energy are known as ___ in the transformation process
outputs intangibles factors of production inputs

2. A series of quality assurance standards designed to ensure consistent product quality under many conditions is known as
statistical process control. total quality standards. total quality management. ISO 9000.

3. The raw materials, components, completed or partially completed products, and pieces of equipment a firm uses are often referred to as
Inventory. order quantities. production.

outputs.

4. In a large company, the department charged with determining the actual processes to be used in turning inputs to outputs is
marketing research. engineering. operations product planning.

5. Which of the following brings all resources required to create a product to a central location?
fixed-position layout process layout product layout continuous layout

6. Getting products to customers, obtaining and managing raw materials, and packaging finished products are all activities of
procurement. logistics production. materials management.

7. The development and administration of the activities involved in transforming resources into goods and services is known as
operations management manufacturing. the transformation process. production.

8. Which of the following is NOT a difference between manufacturers and service providers?

nature and consumption of output uniformity of inputs uniformity of outputs nature and consumption of input

9. The process through which inputs are converted into outputs is referred to as
the transformation process. manufacturing. materials management. physical distribution.

10. The degree to which a good or service meets the demands and requirements of customers is called
quality. customer satisfaction. effectiveness productivity.

11. ____ involves building an item in self-contained units that can be combined or interchanged to create different products.
Customization Standardization Process control Modular design

12. Making identical, interchangeable components or complete products is referred to as

customization. standardization. engineering.

mechanization.

13. Unique products are generally produced through

customization standardization. mechanization. personalization.

14. Procurement is another name for?

consumption disposition budgeting purchasing

15. Which of the following is the sequence of operations through which a product must pass?
scheduling critical path transformation process routing

16. A planning system that schedules the precise quantity of materials needed to make a product is called
flexible scheduling cycle time management. material requirements planning economic order quantities.

17. The activities and processes used in making both tangible and intangible products is known as
manufacturing.

production. operations. the transformation process.

18. Customers' perceptions are important in determining

economic order quantities. production schedules. product specifications. quality.

19. The raw materials, components, completed or partially completed products, and pieces of equipment a firm uses are often referred to as
inventory. order quantities. production. outputs.

20. Getting products to customers, obtaining and managing raw materials, and packaging finished products are all activities of
procurement. logistics. production. materials management.

PART 3
Materials Management Multiple Choice Questions with their answers. Answers are indicated in Italic form. 1. Business cycle, price trends, National Economy are .

a. Micro Factors b. Macro Factors c. Controllable Factors 2. .also called part lists or building lists is the document generated at the design stage. a. MRP (Material Requirement Planning) b. BOM (Bill of Materials) c. MPS (Master Production Schedule) 3. is the scientific technique for planning the ordering and usage of materials at various levels of production and for monitoring the stocks during these transaction. a. MPS b. MRP c. BOM 4. is the time that elapses between issuing replenishment order and receiving the material in stores. a. Replenishment time b. Lead time c. Idle time 5. is the task of buying goods of right quality, in the right quantities, at the right time and at the right price.

a. Supplying b. Purchasing c. Scrutinizing 6. Which is not a part of 5Rs of buying? a. Right Quality b. Right Quantity c. Right Source d. Right Price e. None of the above 7. Purchasing responsibilities can be divided into Buying, Clerical and ..division. a. Packing b. Traffic c. Record d. Follow up 8. The first activity of Purchasing cycle is a. Communicating requirement to the purchase b. Source Selection and development c. Recognizing the need for procurement d. Inspection of goods

9. Buying according to the requirements is called a. Seasonal Buying b. Hand to mouth buying c. Scheduled Buying d. Tender Buying e. Speculative Buying 10. Procuring an item in staggering deliveries according to the delivery schedule finished to the supplier by the buyer. a. Seasonal Buying b. Hand to mouth buying c. Scheduled Buying d. Tender Buying e. Speculative Buying 11. Buying of the annual requirements of an item during its season. a. Seasonal Buying b. Hand to mouth buying c. Scheduled Buying d. Tender Buying e. Speculative Buying 12. Raw Materials and WIP can be classified under-

a. Indirect Material b. Direct Material c. Finished Material d. Standard Parts 13. ..are the basic materials which have not undergone any conversion since their receipt from suppliers. a. WIP b. Raw Material c. Finished Parts d. Work Made Parts