PRODUCTION AND OPERATIONS

MANAGEMENT

Unit1 -1 Mark Quiz Questions

1.A measure of productivity which reflects a combination of some or all of the r

esources
used to obtain a certain output is:
a. machine productivity
b. materials productivity
c. labor productivity
d. multi-factor productivity
2.An operations strategy is developed using many sources of input - which is the
least
likely to have input?

a. Planning
b. Quality
c. Suppliers
d. Top Management
3.Distinctive competencies in organizations seldom relate to:
.

a. facilities layout
b. price cost
c. quality
d. time
4.For this set of errors: -1, -4, 0, +2, +3, MAD is:
.

a. 1.6
b. 2.5
c. 2.0
d. 1.0
5. Many factors impact productivity, one factor not generally stated as having a
negative
impact on productivity is:
a. Government regulations
b. Increased emphasis on services
c. Liability claims
d. Emphasis on short-term performance
6.Productivity is calculated by:
.

a. Adding inputs to outputs

b. Dividing outputs by inputs
c. Dividing inputs by outputs
d. Multiplying inputs by outputs
7.Which is the correct hierarchy of operations management decisions (highest fir
st)?

a. Operating, strategic, tactical

b. Goals, missions, productivity
c. Strategic, tactical, operating
d. Operating, tactical, strategic
8.Which of the following forecasting techniques generates trend forecasts?
r.
a. Delphi method
b. Sales force composites
c. None of the above
d. Moving averages
Unit3 -1 Mark Quiz Questions
1.Building a total quality culture does not entail which one of the following?

a. Initiating quality training for most employees and stressing prevention of

mistakes rather than inspection and immediate correction of mistakes
b. Unequivocal management commitment to total quality and continuous
improvement, along with articulation of a quality vision and establishment of
specific, measurable objectives for boosting quality and making continuous
improvements
c. Hiring only those job applicants with the attitudes and aptitudes conducive t
o
quality-based performance
d. Building core competencies in quality control
2.Creating strategy-supportive policies and procedures
a. is an important strategy-implementing tool because good strategy execution ca
n
seldom be achieved by giving employees Ieeway to do tasks the way they think bes
t
(without carefully prescribed policies and procedures, management loses control
over how tasks are being performed).
b. aids the implementation process by channeling actions, behavior, and daily jo
b
performance along avenues that are calculated to improve strategy execution.
c. generally means having many policies rather than few policies (because it usu
ally
takes many policies and procedures to adequately spell out and fully explain how
things are to be done correctly).
d. is the most reliable way to motivate employees to do things in a first-rate f
ashion
(because very few employees will knowingly violate company policies).
3.Identifying and adopting best practices

a. is essential if a company is to effectively and efficiently implement and exe

cute its
strategy.
b. is a prerequisite to effective reengineering of core business processes and t
o creating
strong core competencies.
c. starts with benchmarking how well a company performs specific tasks and activ
ities
against best-in-industry or best-in-world performers.
d. needs to be directed chiefly at manufacturing and customer service activities
, since
these two areas are generally the most critical to successful strategy implement
ation
and execution.
4.Motivational and incentive compensation practices that contribute to high leve
ls of
employee performancetypically
a. incorporate a blend of positive and negative motivational features and also u
tilize
both monetary and non-monetary rewards.

b. entail paying the highest wages and salaries in the industry to high-performi
ng
employees and stressing non-monetary rewards for low-performing employees.
c. emphasize making employees happy and secure in their jobs through both hard
times and good times, involve extensive job rotation to expand employee skill se
ts,
and provide all employees (but especially those on the low end of the performanc
e
scale) with job training and professional development opportunities throughout t
heir
careers.
d. incorporate only positive motivational approaches and are carefully designed
to
avoid subjecting employees to job insecurity, stress, or anxiety.
5.Prescribing policies and operating procedures aid the task of implementing str
ategy by
a. helping managers determine the appropriate size of departmental staffing and
operating budgets in order for organizational units to carry out their assigned
piece
of the strategy in a competent fashion.
b. indicating how reengineering needs to be accomplished and paving the way for
instituting TQM, best practices, and internal support systems.
c. providing personnel with top-down guidance on how certain things are to be do
ne
and what behavior is expected, placing limits on independent action and channeli
ng
individual and group efforts along the intended path, and helping enforce needed
consistency in how particular strategy-critical activities are performed in
geographically scattered operating units.

d. helping empower product champions and work teams and helping prevent the
corporate culture from being unhealthy and weak.
6.Total quality management (TQM)

a. generally works better than reengineering because of quicker employee buy-in,

lower implementation costs, and easier-to-achieve results.
b. is a term used to describe companies that are best-in-industry in most of the
relevant performance indicators.
c. is a philosophy of managing that emphasizes continuous improvement in all
phases of company operations, 100% accuracy in performing activities,
involvement and empowerment of employees at all levels to improve on how things
are done, team-based work design, benchmarking, and efforts to fully satisfy
d. is a philosophy of managing that involves convincing employees that superior
product quality is the most reliable key to competitive success in the marketpla
ce.
7.Which of the following statements regarding the role and importance of interna
l
support systems is inaccurate?
a. State-of-the-art support systems typically have the effect of raising a firm'
s unit
costs because of the high dollar outlays required to develop and install such
systems.
b. Well-conceived, state-of-the-art support systems can help a company mobilize
information, use knowledge effectively, redeploy resources quickly, and respond
faster.
c. Well-conceived, state-of-the-art support systems reduce the need for rigidly
prescribed policies and procedures.
d. Well-conceived, state-of-the-art support systems can strengthen organizationa
l
capabilities enough to provide a competitive edge over rivals.
8. Which one of the following is not a valid reason why strategy-implementers ne
ed to be
deeply involved in the budget-making process?
a. Implementation of a new or revised strategy usually entails budget reallocati
on.
b. Too little funding of strategy-critical organizational units impedes their ab
ility to
execute their pieces of the strategic plan proficiently.
c. Without budget reallocations it is hard, if not impractical, to match organiz
ation
structure to the chosen strategy; moreover, aggressive resource reallocation is
a
prerequisite to creating needed core competencies and organizational capabilitie
s.
d. The funding requirements of any change in strategy need to drive capital
allocations and the size of each unit's operating budget.
Unit4 -1 Mark Quiz Questions
1.Among the following, all are advantages of specialization except:

a. high productivity
b. simplifies training
c. relatively low wages
d. difficult to motivate quality
2.Analysis of therbligs is most closely related to:

a. learning curve effect.

b. motion study.
c. methods analysis.
d. simo chart.
3.Increasing the level of responsibility of an employee is known as:

a. Ergonomics
b. Job enrichment
c. Job enlargement
d. Specialization
4.The need for methods analysis might come from any of these sources except:
a. new products or services.
b. changes in tools and equipment.
c. government regulations.
d. changes in seasonal demanchanges in product design.
5.The symbols of a flow process chart stand for:

a. inspection, delay, transportation, storage, operation.

b. release, transport. store, grasp, search.
c. circle, arrow, pentagon, square, trianglinput, processing and output
d. transportation loaded, search, grasp, store, perform operation.
6.When performing a time study, the analyst converts the observed time into the
time an
average worker would require working at an acceptable pace by using which of the
following?

a. MTM
b. performance rating
c. methods analysis
d. allowance factors
7.Which of the following statements should not characterize an operations strate
gy
toward the design of work systems?

a. A spirit of cooperation can contribute to success.

b. Workers can be a valuable source of insights.
c. Robotics should be used whenever possible to replace most workers
d. Workers can make or break a business.
8.Which one of the following statements concerning work sampling is not true?

a. A detailed description of activities and times is obtaineMultiple observation

s are
necessary.
b. There is little or no disruption of work.
c. It can be used to estimate the percentage of delay.
d. Observations are made at random intervals.
Unit5 -1 Mark Quiz Questions
1. A production line is to be designed for a job with three tasks. The task time
s are 0.3
minutes, 1.4 minutes, and 0.7 minutes. The maximum cycle time in minutes is:
a. 1.4
b. 0.7
c. 0.3
d. 2.4
2. An operations strategy for process selection should recognize that:
a. process selection is easily changed
b. engineering is solely responsible for choosing what process is best
c. flexibility may not the best choice
d. there is little need to manage technology
3. Heuristic rules are usually used when:
a. a problem has only two possible solutions.
b. no optimizing routine is available
c. a computer program isn't available,
d. an optimum solution is necessary.
4. if a line is balanced with 90 percent efficiency, the balance delay would be:
a. 90 percent
b. unknown, since balance delay is not related to efficiency
c. 10 percent
d. 100 percent
5. In a job shop, volume is low, and product variety tends to be:
a. low
b. very low
c. high
d. moderate
6. In a product layout, the process of deciding how to assign tasks to work stat
ions is
referred to as:
a. station balancing
b. process balancing
c. line balancing
d. task allocation
7.The system that has the highest equipment flexibility is:

a. repetitive production
b. a batch system
c. a job shop
d. continuous processing
8. Which one of the following is not generally regarded as an advantage of produ
ct
layouts?
a. The system is fairly flexible to changes in volume of output.
b. Labor costs are low per unit.
c. unit costs may be lower than with other processes
d. Material handling costs per unit are low.
Unit6 -1 Mark Quiz Questions

1. Although closely associated with quality, this name is not on the list of qua
lity gurus:
a. Edwards Deming
b. Malcolm Baldrige
c. M. Juran
d. Philip Crosby
2. The guru associated with the phrase quality is free is:
a. Crosby
b. Baldrige
c. Deming
d. Juran
3. The purpose of the Malcolm Baldrige National Quality Award is to:
a. all of the above
b. stimulate efforts to improve quality
c. recognize quality achievements of U.S. companies
d. publicize successful quality programs
4. Which name is associated with a list of 14 points?
a. Baldrige
b. Crosby
c. Juran
d. Deming
5. Which one of these is the conceptual basis for continuous improvement?
a. The plan-do-check-act cycle
b. Cause-and-effect diagram
c. Benchmarking
d. Pareto analysis
6. Which one of these is the conceptual basis for continuous improvement?
a. Benchmarking
b. The plan-do-check-act cycle
c. Pareto analysis
d. Cause-and-effect diagram
7. Which one of these would not be considered a determinant of quality Warranty
service,
processing of complaints, and costs of litigation are examples of: { ~internal f
ailure costs
=external failure costs ~appraisal costs ~prevention costs }
a. Focus groups
b. Ease of use
c. Design
d. Service after delivery
Unit7 -1 Mark Quiz Questions
1. A companys competitive strategy
a. consists mainly of offensive actions.
b. consists of the business approaches and initiatives it undertakes to attract
customers and fulfill their expectations, to Withstand competitive pressures, an
d to
strengthen its market position.
c. consists mainly of defensive actions.
d. typically is broader and more wide-ranging than a companys business strategy,
involves offensive actions, defensive actions, tactical maneuvers designed to de
al
with immediate conditions, and actions calculated to have longer-term impact.
2. Companies pursuing a low-cost provider strategy can open up a cost advantage
over
rivals by
a. using a high-volume/high-quality strategy keyed to first-mover advantages,
having a more technologically-sophisticated value chain than rivals, reducing th
e
numbers of cost drivers, and having world-class suppliers.
b. creating altogether new, lower-cost value chain systems or revamping the
existing value chain to bypass some cost-producing activities that produce littl
e
value added insofar as customers are concerned.
c. doing a better job than rivals of controlling the cost drivers.
d. lowering buyers switching costs, creating a state-of-the-art value chain, and
having fewer cost drivers than rival firms.
3. Creating buyer value via differentiation
a. can be achieved anywhere along the industry value chain.
b. can involve incorporating product attributes and user features that lower the
costs
of switching to substitute products and is an attractive competitive strategy wh
en
there are few ways to achieve differentiation that have value to buyers.
c. can involve incorporating product attributes and user features that lower buy
ers'
overall costs of using the product or that raise the performance a buyer gets fr
om
the product or that enhance buyer satisfaction in noneconomic or intangible ways
.
d. has to be grounded in providing buyers with unique extras that deliver real v
alue
rather than perceived value.
4. Differentiation strategies
a. are an attractive competitive approach whenever buyers needs and preferences
are too diverse to be satisfied by a product that is essentially identical from
seller to
seller; moreover, a differentiation strategy can produce sustainable competitive
advantage if the differentiating features possess strong buyer appeal and can no
t be
copied or easily matched by rivals.

b. typically result in much greater buyer loyalty than low-cost provider strateg
ies.
c. usually win out over a low-cost provider strategy unless buyers are inclined
to
shop solely on price.
d. work best when the basis for differentiation is superior quality or superior
customer service.
5. To succeed in building a competitive advantage, a companys strategy must
a. aim at becoming the market share leader and having more distinctive
competencies than rivals.

b. aim at charging a premium price for a superior product/service.

c. aim internally at performing value chain activities differently than rivals a
nd
building resources and capabilities that they cannot readily match.
d. aim externally at providing buyers with what they perceive as superior value.
1
6.which of the following characterize a best-cost provider strategy?

a. The marketing emphasis is on matching the prices of rival brands having

comparable features and attributes .
b. A product line consisting of wide selection, many product variations, and
emphasis on differentiating features
c. A competitive advantage based on more value for the money.
d. The strategic target is price-conscious buyers.
7. Which of the following is inaccurate as concerns a strategy of striving to be
the
industrys overall low-cost provider?
a. A low-cost provider strategy works well in market situations where many buyer
s
are price-sensitive and price competition among rival sellers is especially vigo
rous.
0
b. A low-cost provider strategy entails pursuing cost-saving initiatives that wi
ll
yield a sustainable cost advantage over rivals.
c. A low-cost provider strategy is quite suitable for situations where there are
few
ways to achieve product differentiation that have value to buyers, where most
buyers utilize the product in the same ways, and buyer switching costs are low.
d. A low-cost provider strategy entails concentrating on a narrow portion of the
value chain and abandoning all other activities that create costs.
8.
Which of the following is not characteristic of a low-cost provider strategy?
a. The product line consists of a few basic models having minimal frills and
acceptable quality.
b. The production emphasis is on continuously searching for ways to reduce costs
without sacrificing acceptable quality and essential features.
c. The marketing emphasis is on making virtues out of product features that lead
to
low cost.
d. The strategic target is value-conscious buyers and sustaining the strategy de
pends
on frequent advances in technology and occasional product innovations.
Unit8 -1 Mark Quiz Questions

1. A Project is a temporary endeavor with a finite completion date undertaken to

create a
unique ________
a. item of service
b. product or item
c. item or service.
d. product or service
2. DIN 69901 is a standardization from
a. Indian organization
b. British organization
c. German organization
d. American organization
3. It consists of the various activities of operations, resources and the limita
tions imposed
on them.
a. Project Cycle
b. Management
c. Product
d. Process
4. It is a part of the project which consists of simple and routine instructions
to achieve a
desired result of any activity of the project.
a. Process
b. Project Cycle
c. Management
d. Product
5. Management is the technique of understanding the problems, needs and controll
ing the
use of resources, such as cost, time, manpower, materials, etc.
a. CPM
b. Management
c. PERT
d. Project
6. Project management is the application of knowledge, skills, tools and techniq
ues to
project activities to meet project requirements. This definition of Project Mana
gement is
as per :
a. PMBOK
b. BIS
c. DIN 69901
d. ISO
7. Project management is the complete set of tasks, techniques, tools applied du
ring
project execution
a. ISO
b. DIN 69901
c. PMBOK
d. BIS
8. Projects bring form or function to____
a. ideas or needs
b. items or necessity.
c. item or necessity
d. product or necessity
Unit9 -1 Mark Quiz Questions

1.
In this phase information is collected from the customer pertaining to the proje
ct
and the requirements are analyzed.
a. Marketing
b. Design
c. Execution
d. Analysis
2. In this phase the project manager and the teams members work on the project
objectives as per the plan.
a. Design
b. Analysis
c. Execution
d. Marketing
3.One can estimate the start time and the finish time for every event of the pro
ject in its
WBS using the __

a. CPM
b. PERT
c. ICT
d. CPM
4. One can find out the variance and use the variance to analyze the various pro
babilistic
estimates pertaining to the project in ___ method.
a. CPM
b. CPM
c. ICT
d. PERT
5. SRA stands for
a. supprt requirement analysis.
b. systems requirement analysis
c. software requirement analysis
d. speficificaiton requirement analysis
6.. The methods used to analyze the project are :

a. ICT
b. PERT and SRA
c. CPM and PERT
d. CPM and SRA
7. This phase involves the study of inputs and outputs of the various project st
ages.
a. Marketing
b. Evaluation
c. Design
d. Analysis
8. This proposal contains the strategies adopted to market the product to the cu
stomers.
a. Marketing
b. Evaluation
c. Analysis
d. Design
Unit10 -1 Mark Quiz Questions

1. An information system dealing with project management tasks is known as _____

a. Decision Support System
b. Transaction Processing System
c. Knowledge Management System
d. Project Management Information System
2.
Assist the team members, stakeholders, managers with necessary information and
summary of the information shared to the higher level managers is one of the
aspects of ___
a.
PMIS
b. EIS
c. DSS
d.
KBS
3. Assists the managers in doing what if analyses about project staffing, propos
ed staffing
changes and total allocation of resources is one of the aspect of ____
a. KBS
b. PMIS
c. EIS
d. DSS
3.
Help organizational learning by helping the members of the organization learn
about project management is one of the aspects of ___
a. KBS
b. DSS
c. PMIS
d. EIS
4. Provide information to the major stakeholders i.e. the right information at t
he right
time is one of the aspects of ____
a. KBS
b. PMIS
c. DSS
d. EIS
4. The perception of a manager in current trends in project management is to____
a. analyse project
b. obtain result obtain approval
c. analyse product feature
6. involves using various analysis techniques and procedure to identify major ex
ternal
factors or forces which could affect development process.
a. Management Assurance Measure
b. Continusous Business Process Improvement
c. Force field analysis
d. Information Risk Management
7 . _ is a process through which a project team passes on the details of any sys
tem as
recommendation for standardization. It acts as a business process element for th
e
company as a whole.
a. Management Assurance Measure
b. Force field analysis
c. Information Risk Management
d. Continusous Business Process Improvement
Unit11 -1 Mark Quiz Questions

1. Better utilization of resources men, material, equipment and money.

a. SCM
b. MRS
c. EIS
d. TPS
2.
Effective integration of multiple systems like ERP, communication systems ,
documentation system and secure is an objective of __
a. TPS
b. SCM
c. MRS
d. EIS
3.
Enhancement of participation level and empowerment level is one of the
objectives of ___
a. SCM
b. TPS
c. DSS
d. KBS
4.
Increase in functional effectiveness of existing systems like ERP, Accounting
Software and Documentation like Financial reports/ Statements/ ISO 9000
Documents etc. is one of the objectives of ___
a. SCM
b. TPS
c. KBS
d. DSS
5.
Increase in functional effectiveness of existing systems like ERP, Accounting
Software and Documentation like Financial reports/ Statements/ ISO 9000
Documents etc. is one of the objectives of ___
a. KBS
b. TPS
c. DSS
d. SCM
6.
One of the objectives of ____ is enhancement of coverage and accuracy of
management information systems.
a. EIS
b. TPS
c.
MRS
d.
SCM
7. Reduction of inventory is one of the objectives of ___
a. SCM
b. DSS
c. KBS
d. TPS
8. _____ is considered by many experts worldwide as the ultimate solution toward
s
efficient enterprise management.
a. KBS
b. SCM
c. TPS
d. DSS
Unit12 -1 Mark Quiz Questions
1. A point that is outside of the lower control limit on an Rchart:
a. is an indication that no cause of variation is present
b. should be ignored because it signifies better than average quality
c. should be ignored unless another point is outside that limit
2. An x-bar chart is best suited for this type of data:
a. AttributMeasurement.
b. Population enumeration
c. Count.
d. Pass/Fail
3. In which instance would acceptance sampling not be appropriate
a. The cost consequences of passing defectives is low.
b. Destructive testing is required
c. A large number of items must be processed in a short period.
d. All are situations not suggesting that we use acceptance sampling
5. Process capability calculations take into account the process width and
a. Control limits
b. Process standard deviation
c. Process dispersion.
d. Specifications.
6. The number of runs up and down in the data set 8 9 12 10 11 12 is:
a. 5
b. 2
c. 4
d. 3
7. What type of control chart would be used to monitor the number of defects in
the
output of a process for making rope?
a. c chart.
b. x-bar chart.
c. p chart.
d. R chart
8. Which of the following quality control sample statistics indicates a quality
characteristic that is an attribute?
a. variance
b. standard deviation
c. mean
d. proportion
Unit13 -1 Mark Quiz Questions
1. A basic requirement for operating with low inventories in JIT systems is:
a. Inventory investment must be saved.
b. Major problems must have been solved.
c. Adequate space is available to store inventory
d. Major problems must be uncovered.
2. In the JIT philosophy, the ideal lot size is:
a. the capacity of the standard container
b. the economic order quantity
c. one unit
d. the economic run size
3. Inventory management requires two questions to be answered: How many and when
.
JIT answers those two questions with:
a. economic run sizes, reorder point
b. economic order quantities, reorder point
c. exact quantities, when orders are received
d. exact quantity, first of each month
4. JIT II can be described briefly as:
a. empowering suppliers.
b. placing the buyers representatives in the suppliers factory.
c. replacing one supplier with many suppliers for the same supplies to assure
availability.
d. a lower cost replacement for JIT I.
5. Which is not a benefit of JIT?
a. Lower Inventories
b. Work Cells
c. Flexibility
d. Lower total setup costs
6.Which of these groups would be least likely to resist conversion from a ROP/EO
Q
inventory management systems to a JIT system?

a. Management
b. Workers
c. Customers
d. Vendors
7. Which one of these is not generally associated with JIT?
a. Low inventories
b. A push system
c. Preventive maintenance
d. Problem solving
8. Which one of these is not usually associated with JIT?
a. Manufacturing cells
b. Preventive maintenance
c. Large lot sizes
d. Multifunctional workers
Unit14 -1 Mark Quiz Questions

1.
A queuing system has four crews with three members each. The number of
servers is:
a. 4
b. 3
c. 7
d. 12
2.
A system with an arrival rate of two per hour, a service time of 20 minutes, and
one server, would have a utilization of.
a. 10%
b. 40%
c. 67%
d. 33%
3. A three-step repair service with one server at each step would be an example
of a:
a. multiple-phase, multiple-channel system.
b. single-phase, multiple-channel system.
c. multiple-phase, single-channel system.
d. solo server, trio channel
4.
For an infinite-source system with an arrival rate of 6 per hour (Poisson) and
service time of 6 minutes per customer (exponential), the average number being
served is:
a. .60
b. none of these
c. .10
d. 1.0
5. The term queue discipline refers to:
a. the order in which customers are processed
b. having multiple waiting lines without customers switching from line to line
c. the willingness of customers to wait in line for service
d. the reason waiting occurs in underloaded systems
6.Waiting lines tend to form in underloaded systems because:

a. demand sometimes exceeds supply.

b. capacity always exceeds demand.
c. capacity sometimes exceeds demand.
d. demand always exceeds supply.
7. When the cost incurred by all customers is not the same, an appropriate queui
ng model
is:
a. multiple channel, single priority
b. single channel, multiple phase
c. multiple channel, multiple priority
d. single channel, single phase
8.Why is there waiting in an infinite source queuing system?

a. low utilization
b. poor scheduling
c. variability in arrival and service rates
d. slow service
Unit15 -1 Mark Quiz Questions

1.
A decrease in the firms receivable turnover ratio means that __________
a. it is collecting credit sales more quickly than before
b. it is collecting credit sales more slowly than before
2.
A firms inventory turnover (IT) is 8 times on a cost of goods sold (COGS) of
$800,000. If the IT changes to 5 times while the COGS remains the same, a
substantial amount of funds is either released from or additionally invested in
inventory. In fact, __________
a. $100,000 is additionally invested
b. $160,000 is released
c. $60,000 is released
d. $60,000 is additionally invested
3.
If EOQ = 1,000 units, order costs are $200 per order, and sales total 5,000 unit
s,
what is the carrying cost per unit?
a. ~$10
b. ~$100
c. ~$1,000
d. =$2
4.
If EOQ = 40 units, order costs are $2 per order, and carrying costs are $.20 per
unit, what is the usage in units?
a. ~40 units.
b. =80 units.
c. ~16 units.
d. ~10 units
5.
Sixty percent of Basket Wonders annual sales of $900,000 is on credit. If its ye
arend
receivables turnover is 4.5, the average collection period and the year-end
receivables are, respectively __________ Assume a 365day year
a. 81 days and $120,000
b. 73 days and $120,000
c. 73 days and $108,000
d. 81 days and $108,000
6.
The credit policy of Milwaukee Brewski Breweries is 1/10, net 30. At present
25% of the customers take the discount. What would accounts receivable be if all
customers took the cash discount?
a. Unable to determine without more information.
b. Account receivable would be higher than the present level
c. No change from the present level.
d. Account receivable would be lower than the present level.
7. Which of the following statements hold true for safety stock?
a. The greater the uncertainty associated with forecasted demand, the lower the
level of safety stock needed
b. The greater the risk of running out of stock, the larger the safety stock nee
ded.
c. The lower the opportunity cost of the funds invested in inventory, the smalle
r the
safety stock needed.
d. The higher the profit margin per unit, the lower the safety stock necessary.
8.
Which ratio might you be the most concerned with in analyzing a firms financial
leverage position?
a. Inventory turnover.
b. Return on equity.
c. Debt-to-total assets.
d. Acid-test.