Question 1

To minimise inventory, the best ordering decision is-

Select one:
a. Maximum lot size
b. Lot for Lot
c. Average inventory cycle
d. Fixed quantity
e. Average lot size

Question 2
Ordering Cost + Inventory carrying cost is minimum when-
Select one:
a. Inventory carrying cost is greater than one
b. Ordering cost equals Inventory carrying cost
c. Ordering cost is greater than zero
d. Ordering cost is less than Inventory carrying cost
e. Ordering Cost is greater than Inventory carrying cost

Question 3
The formula of Mean Absolute Deviation (MAD). MAD is equal to -
Select one:
a. Number of observations/(Number of observations + Sum of absolute deviations)
b. Number of observations/Sum of absolute deviations
c. (Number of observations+ Sum of absolute deviations)/Number of observations
d. (Number of observations-Sum of absolute deviations)/Number of observations
e. Sum of absolute deviations/Number of observations Book Page No - 236

Question 4
Capital cost forms the part of
Select one:
a. Stock out cost
b. Capacity associated cost
c. Item cost
d. Ordering cost
e. Carrying cost Book Page No - 262

Question 5
When demand is dependent, which method of ordering should be prefered?
Select one:
a. Material Requirements Planning (MRP) based ordering
b. Periodic ordering
https://books.google.co.in/books?id=Hw0pbYlFA14C&pg=PA61&lpg=PA61&dq=When+demand+is+dependent,+which+method+of+ordering+should+be+prefered?&source=bl&ots=z4eK_Ak5YC&sig=Ov2pTawd9rUH3na_cQZMZVk3ikU&hl=en&sa=X&ved=0ahUKE
wiRmN3SoMzSAhUHS7wKHYt5DUsQ6AEILDAD#v=onepage&q=When%20demand%20is%20dependent%2C%20which%20method%20of%20ordering%20should%2 0be%20prefered%3F&f=false

c. Lot for lot ordering

d. ABC analysis based ordering
e. EOQ based ordering
 Question 6
Which of the following is NOT a basic demand pattern-
Select one:
a. Seasonality
b. Chase Slide No L9 - 6
c. Randomness
d. Trend
e. Cycle

Question 7
Which of the following is not considered for computing Economic Order Quantity (EOQ)?
Select one:
a. Ordering cost
b. Production cost
c. Stock out cost
d. Item cost
e. Carrying cost

Question 8
EOQ assumes-
Select one:
a. Demand is uniform (constant)
b. Demand is uniform and replenishment is occurs all at once Book Page No 282 & 283
c. Replenishment occurs after a long time
d. Demand is non uniform and replenishment occurs all at once
e. Demand is non uniform (not constant)

Question 9
It is advisable to carry larger stocks for-
Select one:
a. A class and C class items
b. C class items Book Page No - 273
c. B class items
d. A class items
e. A class and B class items

Question 10
Seasonal index is equal to-
Select one:
a. Period average/average demand of all periods Book Page No - 229
b. Deseasonalised demand/period moving average
c. Period moving average/deseasonalised demand
d. Average demand of all periods/period moving average
e. Average demand of all periods/ deseasonalised demand
 Question 11
Which of the following is an (are) intrinsic technique(s) of forecasting?
Select one:
a. Expert opinion
b. Both Exponential smoothing and Moving average Book Page No 224 to 226
c. Only Moving average
d. Only Exponential smoothing
e. Consensus

Question 12
Setup and teardown cost are part of-
Select one:
a. Ordering cost Book Page No - 263
b. Item cost
c. Interest cost
d. Stock out cost
e. Carrying cost

Question 13
The risk of an item becoming obsolete is considered as a part of-
Select one:
a. Item cost
b. Ordering cost
c. Stock out cost
d. Capacity associated cost
e. Carrying cost Book Page No - 262

Question 14
Tracking signal equals-
Select one:
a. Sum of absolute errors
b. Sum of forecast errors
c. Sum of square of errors
d. Mean Absolute Deviation/sum of square of forecast errors
e. Sum of forecast errors/Mean Absolute Deviation Book Page No - 238

Question 15
When prices are increasing which method of inventory valuation understates the value of inventory?
Select one:
a. Last in First out (LIFO)
b. Standard cost
c. First In Last out (FILO)
d. Average cost
e. First in First out (FIFO) Book Page No - 270
 Question 16
When prices are falling which method of inventory valuation overvalues the value of inventory?
Select one:
a. Average cost
b. First in Last out (FILO)
c. Standard cost
d. First in First out (FIFO)
e. Last in First out (LIFO) Book Page No - 270

Question 17
Mean absolute deviation of error-
Select one:
a. Is always positive
b. Cannot be zero
c. Is always between zero and one
d. Is zero or greater than one
e. Is always greater than one

Question 18
The value of alpha (smoothing constant) in Exponential smoothing should be-
Select one:
a. Equal to one
b. Between zero and one Book Page No - 227
c. More than one
d. Less than zero
e. Less than one

Question 19
Projections based on which of the following is qualitative?
Select one:
a. Seasonality
b. Trend
c. Cycles
d. Informed opinions Book Page No - 223
e. Random

Question 20
Economic Order Quantity (EOQ) will double if-
Select one:
a. Item cost becomes four times
b. Demand doubles
c. Item cost becomes half
d. Demand becomes four times
e. Item cost doubles
 Question 21
Increase in which of the following will lead to increase in Economic Order Quantity (EOQ)?
Select one:
a. Both demand and carrying cost
b. Demand, carrying cost and item cost
c. Only carrying cost
d. Only demand
e. Only Item cost

Question 22
Inventory is valued at the oldest (first) item in-
Select one:
a. Standard cost valuation
b. FIFO valuation Book Page No - 270
c. Average cost valuation
d. Non-standard cost valuation
e. LIFO valuation

Question 23
Increase in which of the following will lead to decrease in Economic Order Quantity (EOQ)?
Select one:
a. Both demand and carrying cost
b. Only demand
c. Only carrying cost
d. Only Item cost
e. Demand, carrying cost and item cost

Question 24
Inventory carrying cost is least for-
Select one:
a. Fixed period quantity
b. ABC analysis based ordering
c. Economic Order Quantity (EOQ)
d. Fixed order quantity
e. Lot for lot orders

Question 25
Period order quality is computed by the formula-
Select one:
a. Square of average weekly usage
b. Average weekly usage/EOQ
c. EOQ/average weekly usage Book Page No - 293
d. Square root of EOQ/average weekly usage
e. Square root of average weekly usage/EOQ