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1. Which of the following is NOT among the three (3) strategies prescribed by Strategic
Cost Management?
a. Focus c. Market segmentation
b. Cost leadership d. Product differentiation
2. The value chain is the sequence of business functions in which
a. Value is deducted from the products or services of an organization
b. Value is proportionately added to the products or services of an organization
c. Products and services are evaluated with respect to their value to the supply
chain
d. Usefulness is added to the products or services of an organization
3. R&D, production and customer service are business functions that are all included as
part of
a. Value chain c. Marketing
b. Benchmarking d. Supply chain
4. Which among the following is a value-added activity?
a. Processing c. Storing
b. Moving d. Inspecting
5. There are four broad classes of activities in the value chain. Research and development
is part of
a. Activities related to getting ready to make the product
b. Activities related to making the product
c. Activities related to dealing with the customer
d. Other activities that support the first three activities
6. There are four broad classes of activities in the value chain. Storing work in process is
part of
a. Activities related to getting ready to make the product
b. Activities related to making the product
c. Activities related to dealing with the customer
d. Other activities that support the first three activities
7. There are four broad classes of activities in the value chain. Billing activity is part of
a. Activities related to getting ready to make the product
b. Activities related to making the product
c. Activities related to dealing with the customer
d. Other activities that support the first three activities
8. There are four broad classes of activities in the value chain. Accounting activity is part
of
a. Activities related to getting ready to make the product
b. Activities related to making the product
c. Activities related to dealing with the customer
d. Other activities that support the first three activities
9. The unyielding and continuing improving effort by everyone in the organization to
understand, meet and exceed the customer expectations and uses front-line workers to
solve problems systematically.
a. Just-in-time manufacturing c. Total quality management
b. Conventional manufacturing d. Total quantity management
10.Which of the following is at the core of the definition of total quality management
(TQM)?
a. Customer surveys c. Employee satisfaction
b. Continuous improvement d. Supplier inspections
11.The primary reason for adopting TQM is to achieve
a. Greater customer satisfaction c. Reduced delivery charges
b. Greater employee participation d. Reduced delivery time
12.TQM should be viewed as
a. Management entered and technology driven
b. Customer centered and employee driven
c. Policy centered and procedure
d. Goal centered and standard driven
13.A characteristic of TQM is
a. Quality by final inspection c. Education and self-
improvement
b. Management by Objectives (MBO) d. On the job training by other
workers
14.In which of the following organizations does total quality management (TQM) work
best?
a. Hierarchal c. Teams of people from the same specialty
b. Specialist working individually d. Teams of people from
different specialties
15.Implementation of total quality management (TQM) in a firm:
a. Takes from three to five years
b. Must follow a rigid, predetermined process to be successful
c. Involves some lower-level managers and all senior executives
d. Is a bottom up process, with management involved only in the final phase
16.A traditional quality control process in manufacturing consists of mass inspection of
goods only at the end of a production process. A major deficiency of this traditional
quality control process is that
a. It is expensive to do the inspections at the end of the process
b. It does not focus on improving the entire production process
c. It is possible to rework defective items
d. It is not 100% effective
17.Under a total quality management (TQM) approach,
a. Measurement occurs throughout the process and errors are caught and
corrected at the source
b. Quality control is performed by well-trained inspectors at the end of production
process
c. Upper management assumes the primary responsibility for the quality of the
products and services
d. A large number of suppliers are used in order to obtain the lowest possible
prices
18. Which is NOT listed as a practice that successful TQM firms use to ensure having
quality suppliers?
a. Forming long-term relationships with suppliers as working partners
b. Setting measures that truly reflect the needs and expectations of suppliers
c. Reducing the supplier base
d. Selecting suppliers based on price and their capability and willingness to
improve quality, cost, delivery, flexibility, and for their dedication to continuous
improvement
19.The process of instituting procedures and then obtaining feedback to ensure that all
parts of the organization are functioning effectively and moving toward overall
company goals.
a. Decentralization c. Planning
b. Benchmarking d. Control
20.A tool that compares how tasks are performed internally against the best practices of
industry leaders is
a. Process value analysis c. Benchmarking
b. Reengineering d. None of the choices
21.It is an approach to developing new ways (i.e., radical redesign) to perform existing
activities is called
a. Process value analysis c. Benchmarking
b. Business Process Reengineering d. None of the choices
22.In Business Process Reengineering (BPR), the main objectives are to simplify and to
possibly eliminate
a. Value-added activities c. Constraint
b. Non-value-added activities d. Non-constraint
23. Which of the following statements is TRUE regarding BPR?
a. It requires a change in the companys products
b. It involves redesigning business and eliminating value-added activities
c. It involves completely redesigning business processes and it is often implemented
by outside consultants
d. It empowers front-line workers to solve problems and it focuses attention on
solving problems rather than on finger-pointing
24.BPR
a. Affects employees in a way that boosts their morale
b. Is less likely to result in employee resistance than total quality management
c. Is more likely to result in employee resistance than total quality management
d. Does not affect employees, hence, no resistance from employees is expected when
it is applied
25. Which of the following quality tools is another term for gradual yet continuous
improvement?
a. Theory of constraints c. Six-sigma
b. Kaizen d. Lean manufacturing
26. The just-in-time manufacturing (JIT) system is also called the
a. Job in training system c. zero cost system
b. Job in transit system d. zero inventories system
27. JIT purchasing can be used by
a. Retailers c. Manufacturers
b. Wholesalers d. All of the choices
28.In JIT, the flow of goods is controlled by a pull approach. It means that:
a. Work is initiated only in response to customer orders
b. Customers are pulled to buy more units to reduce the companys inventory
c. Warehouses should always be full to be sure that customer demands are always
met
d. Production officers see to it that there is always something to do keep everyone
busy
29. All of the following are characteristics of a just-in-time manufacturing environment.
EXCEPT:
a. Frequent deliveries of materials c. Little or no inventory of
finished product
b. Manufacturing cells d. Longer production cycle
30. Just-in-time purchasing (demand-pull system) requires
a. Smaller and more frequent purchase orders
b. Larger and more frequent orders
c. Smaller and less frequent purchase orders
d. Larger and less frequent purchase orders
31. A just-in-time manufacturer is more likely than a conventional manufacturer to
a. Receive more frequent deliveries of materials
b. Hold large inventories to serve as buffers
c. Spend less money on advertising
d. Need workers with fewer skills
32. A conventional manufacturer is more likely than a just-in-time manufacturer to
a. Have a short production cycle c. Hold large inventories to serve as
buffers
b. Produce goods in small batches d. receive more frequent
deliveries of materials
33.Which of the following is a characteristics of just-in-time (JIT) inventory management
systems?
a. JIT users determine the optimal level of safety stocks
b. JIT is applicable only to large companies
c. JIT does not really increase overall economic efficiency because it merely shifts
inventory levels further up the supply chain
d. JIT relies heavily on good-quality materials
34. All of the following are potential financial benefits of JIT, EXCEPT
a. Reducing the risk of obsolescence
b. Reducing manufacturing lead time
c. Lower investments in inventories
d. Lower investments in plant space for inventories
35. Which of the following do just-in-time (JIT) operations try to eliminate?
a. Discretionary fixed costs c. Avoidable costs
b. Non-value-adding costs d. Direct costs
36.Well-implemented just-in-time production and purchasing techniques
a. Result in large stockpiles of inventory to keep production running
b. Strengthen a companys ability to complete in the marketplace
c. Increase a reliance on long-term customer forecasts
d. Reduce a companys competitive edge
37. Under Theory of constraints (ToC),
a. No company has constraints
b. Improvements efforts should be focused on non-constraints
c. Efforts that would improve output of a workstation shall be focused on the
constraints
d. A company that wants to improve its operation shall focus on workstation with
the highest production capacity
SUGGESTED ANSWER:
1. c 11. a 21. b 31. a
2. d 12. b 22. b 32. c
3. a 13. c 23. c 33. d
4. a 14. d 24. c 34. a
5. a 15. b 25. b 35. b
6. b 16. b 26. d 36. b
7. c 17. a 27. d 37. c
8. d 18. c 28. a
9. c 19. d 29. d
10. b 20. c 30. a