Materials Management - 13
True/False
Question Small parcels, Samples, gifts which are received from other
countries provisions of import policy & customs not applied on them.
Correct Answer False
Match The Following
Question -Correct Answer
Delivery time As specified in contract Warranties
Essential stipulations Conditions As per agreement
Collateral stipulations Warranties As specified in contract
Caveat emptor Fundamental principle of- sale of goods Sale of goods act
option
Multiple Choice Single Answer
Question For the inspection of special Cutting tools which department
is responsible?
Correct Answer Planning department & inspection department
Your Answer Planning department & inspection department
True/False
Question Black listing may be for a limited period or for an
indefinite period.
Correct Answer True
Select The Blank
Question Two-bin system supersedes ________.
Correct Answer Perpetual inventory
Multiple Choice Multiple Answer
Question Stores functions include :-
Correct Answer Receiving and issuing of materials , Keeping the
record , Taking precautions to avoid pilferage, theft
Multiple Choice Multiple Answer
Question Analysis of certification correctness of material is
required for :-
Correct Answer Bar stock , Castings
Select The Blank
Question ________ is followed in public sector organizations to
identify the lowest potential bidder.
Correct Answer Tender system
Select The Blank
Question Set-up cost for manufactured item in own plant is ________.
Correct Answer Very high
Select The Blank
Question The ________ is raised by the receiving stores in receipt of
materials and after physical verification of the quantity and quality.
Correct Answer Goods Receipt Report
True/False
Question Metals should be stored at least 15-20 cm above the ground.
Correct Answer True
True/False
Question JIT purchasing is indirectly the activity of pushing
inventory on the suppliers.
Correct Answer True
Multiple Choice Single Answer
Question Annual total cost is :-
Correct Answer Annual Material Cost + Annual Procurement Cost +
Annual ICC
True/False
Question No restrictions are on rail transport.
Correct Answer True
Multiple Choice Multiple Answer
Question Advantages of forward buying are :-
Correct Answer Greater margin of profit on finished goods , Saving
in procurement expenses as purchases are usually consolidated. , Security
against shortages
Multiple Choice Single Answer
Question The purchase of variety of items from single source is
called as :-
Correct Answer Blanket orders
True/False
Question Inventory control technique is suited for low value indirect
materials which are economical to procure them in certain pre fixed
quantities.
Correct Answer True
Multiple Choice Single Answer
Question Contracts of A & B class items should have :-
Correct Answer Value engineering
True/False
Question Reorder quantity in fixed order interval system equal
economic order quantity.
Correct Answer False
Select The Blank
Question Indian railways carry almost ________ goods & passenger
traffic.
Correct Answer 0.75
Select The Blank
Question The purchasing of Weigh bridge is________
Correct Answer Capital purchasing
Multiple Choice Multiple Answer
Question Techniques of Simplification :-
Correct Answer Preferred numbers , Frequency analysis ,
Rationalized codification
Multiple Choice Multiple Answer
Question Correct issues must have :-
Correct Answer Written requisitions , Authorized requisitions
Multiple Choice Multiple Answer
Question Rejection percentage to be allowed to the vendor depends on
the :-
Correct Answer Configuration of component , Number of operations
involved , Tolerances and surface finishes
Select The Blank
Question One of the major pipe-line in India is ________.
Correct Answer Ankaleshwar - Baroda
Select The Blank
Question GRR are sent from ________.
Correct Answer Stores Dept.
Multiple Choice Multiple Answer
Question Continuous Stock-taking is effective due to :-
Correct Answer Planned/scheduled activity , Discrepancies are
noticed & corrected in short spell
Multiple Choice Single Answer
Question Limited competition is associated with higher price while
wider competition enables buying at competitive rates is known as :-
Correct Answer Extent of competition
Select The Blank
Question ________ is an addition of unnecessary cost to product
Correct Answer Poor design
Multiple Choice Multiple Answer
Question The alpha numerical system operates as under :-
Correct Answer Each item is identified and is given a proper
description. , Identical items are classified into groups and each group is
provided a suitable heading. , Codes are assigned to the next group, which
are usually the alphabets.
Multiple Choice Single Answer
Question How much saving in material cost can give benefit equivalent
to eight to nine % rise in sales volume?
Correct Answer 0.01
Multiple Choice Single Answer
Question The purchasing made under contract , usually formal, of
needed materials, the delivery of which is frequently spread over a period
of time is known as :-
Correct Answer Contract buying
Multiple Choice Single Answer
Question Which type of tendering is adopted when the requirements are
urgent?
Correct Answer Limited tender
True/False
Question Continuous stock-taking tends to dislocate the working of
store.
Correct Answer False
True/False
Question PO gives full and complete details of the materials to be
supplied thereby avoiding ambiguities.
Correct Answer True
Multiple Choice Single Answer
Question External lead time is :-
Correct Answer Supplier's lead time
Match The Following
Question -Correct Answer
Supplies -Abrasive materials
Perishable materials Vegetables
Packing materials Carton
Empties Metal containers
Multiple Choice Multiple Answer
Question Primary duties to be performed by purchase department are :-
Correct Answer Receipts, sorting of purchase indents and
determination of method of buying , Performance evaluation and feedback ,
Search for suppliers
Multiple Choice Multiple Answer
Question In F.O.R. contract seller is responsible for :-
Correct Answer Arranging for movement of goods to the transporter's
godown , Safe loading on into the vehicle , Keeping the material in
deliverable state
Multiple Choice Single Answer
Question Primary function means :-
Correct Answer Basics required to make product worth
Multiple Choice Single Answer
Question Who act as a link between company's financial department and
supplier's for timely payment?
Correct Answer Purchase division
Select The Blank
Question Review system-optional replenishment is a modification of
________.
Correct Answer Fixed-order interval system
Multiple Choice Single Answer
Question Value analysis job plan contains :-
Correct Answer 9 steps
Multiple Choice Multiple Answer
Question Functions of Traffic division :-
Correct Answer Tracing missing consignments , Selecting the right
kind of shipping service , Scrutinizing freight bills for payment.
Select The Blank
Question ________Inspects the goods & issues a surveyor report
certificate.
Correct Answer Surveyor
Multiple Choice Multiple Answer
Question Objectives of material research are :-
Correct Answer To improve capability of purchase department to
visualize problems which may be encountered in future. , To make optimum
utilization of available resources , To provide the enterprise a competitive
edge.
True/False
Question Two bin system is better as compared to perpetual inventory
system.
Correct Answer False
Materials Management - 12
True/False
Question
Bulky items impervious to weather is kept at very safe place inside store.
Correct Answer
False
Select The Blank
Question
Petroleum product imports are channealised through________.
Correct Answer
Indian oil corporation
Multiple Choice Single Answer
Question
Procurement by more than one firm by pooling their requirements is :-
Correct Answer
Cooperative buying
Multiple Choice Single Answer
Question
For the inspection of special Cutting tools which department is responsible?
Correct Answer
Planning department & inspection department
Match The Following
Question
Correct Answer
Vendor rating
Right source
Replenishment method
Right time
Competitive bidding
Right price
EOQ
Right quantity
Multiple Choice Single Answer
Question
The cost incurred in providing adequate insurance cover to the materials in
transit and in storage is
Correct Answer
Insurance cost
Multiple Choice Multiple Answer
Question
Import transactions are subject to following additional laws compared to
procurement from sources within the country as :-
Correct Answer
Import trade control act ®ulation , Custom act , Central excise Rules 2002
True/False
Question
Projects are usually subjected to uncertainty & often delay takes place in
completion of projects which results in cost over runs.
Correct Answer
True
True/False
Question
Contract whose object is not lawful are not void.
Correct Answer
False
True/False
Question
Shortage chasing is intended to remind the supplier of the due date and
obtain advance information of expected delays.
Correct Answer
False
Multiple Choice Multiple Answer
Question
Optimal purchase quantity comprises :-
Correct Answer
Annual inventory carrying cost , Annual procurement cost
Multiple Choice Multiple Answer
Question
Steel almirahs are used for storage of :-
Correct Answer
Expensive items , Scarce items
Multiple Choice Multiple Answer
Question
Some of the benefits if materials are supplied by the buyer are :-
Correct Answer
The supplies of goods are guaranteed especially during the periods of
shortages. , The frequent requests for the price revisions are avoided , The
buyer is sure of the quality of materials.
added by the suppliers.
Multiple Choice Multiple Answer
Question
The buyers are asked to adopt the following method for follow up :-
Correct Answer
Telephone , Letters , E-mail, telegram
True/False
Question
Stores is the "Safe Custody" for keeping materials
Correct Answer
True
Multiple Choice Single Answer
Question
Prices of certain commodity may be fixed by the government and thereby
putting a restriction on both buyer and seller is :-
Correct Answer
Government restrictions
Multiple Choice Multiple Answer
Question
A contract terminates under following condition :-
Correct Answer
Discharge by performance , Discharge by Release , Discharge by novation
Select The Blank
Question
________ is followed in public sector organizations to identify the lowest
potential bidder.
Correct Answer
Tender system
True/False
Question
The performance of an equipment can not be verified on the spot if the
equipment is not in operation.
Correct Answer
False
Match The Following
Question
Correct Answer
Speculative buying
Bulk purchasing
Capital purchasing
Plant and machinery
Group purchasing
Hardware materials
Service contract
Typewriters
True/False
Question
Metals should be stored at least 15-20 cm above the ground.
Correct Answer
True
Multiple Choice Multiple Answer
Question
Costs involved in materials management are
Correct Answer
Basic cost of materials , Government tax and levies , Ordering cost
Select The Blank
Question
________ of the department refers to the placement of the department in the
structure of the company.
Correct Answer
Status
True/False
Question
Value analysis is the cost reduction technique.
Correct Answer
True
Multiple Choice Multiple Answer
Question
For large engineering firms main store could be sub divided into :-
Correct Answer
Finished part store , Raw material store , Semi finished item store
Multiple Choice Single Answer
Question
In project procurement what work is covered in detailed engineering stage?
Correct Answer
Cross verification of technical specifications & finalisation of commercial
terms
Select The Blank
Question
Sub contracting decisions must be based on outcome of ________ analysis.
Correct Answer
Cost benefit
Multiple Choice Multiple Answer
Question
Disadvantages of forward buying are :-
Correct Answer
Such a buying may not serve entirely the needs of the production department
, Price expectations if not realised may result in major financial loss to
the firm. , Large scale obsolescence may result if design changes occur
Multiple Choice Single Answer
Question
Who act as a link between company's financial department and supplier's for
timely payment?
Correct Answer
Purchase division
Multiple Choice Single Answer
Question
What is the meaning of stores layout?
Correct Answer
Physical arrangement of space for storage material movement, office etc
which should provide for most efficient receipt storage & issue of material
True/False
Question
If item is manufactured in small quantities, set-up cost is high.
Correct Answer
True
Select The Blank
Question
________is suitable for procurement from non-profit making organization.
Correct Answer
Cost plus zero fee
Select The Blank
Question
________ reduce problems of material planning.
Correct Answer
Reduction in lead time
Multiple Choice Single Answer
Question
JIT aims at :-
Correct Answer
Reduction in non-value added activities
Multiple Choice Multiple Answer
Question
Complaints concerning should be made in such a way that negative reactions
are avoided such as :-
Correct Answer
Delivery failures , Rejection , Shortages
Multiple Choice Single Answer
Question
Internal factor influencing materials planning:-
Correct Answer
Procurement lead times
Multiple Choice Single Answer
Question
The cost incurred in movement of materials from suppliers works to buyer's
works is
Correct Answer
Freight cost
True/False
Question
Supplier's delivery ratings should be communicated on periodical basis.
Correct Answer
True
Select The Blank
Question
When the costs are balanced, total cost is ________.
Correct Answer
Minimum
Multiple Choice Single Answer
Question
The process of procurement of raw material, wip, finished goods, jigs,
fixtures and other tools and equipments which are required for the operation
and maintenance of a manufacturing plant is known as
Correct Answer
Purchasing
Multiple Choice Single Answer
Question
Mechanical tests are performed to :-
Correct Answer
Ascertain the strength of materials
Multiple Choice Single Answer
Question
Set-up cost means :-
Correct Answer
Cost incurred to replenish the stock of item manufactured at home plant
Multiple Choice Single Answer
Question
The main responsibility of inventory control division is :-
Correct Answer
Fixing inventory levels
Multiple Choice Multiple Answer
Question
Special stores are created where :-
Correct Answer
Material need to be held under the control of the bank , Material need to be
held for perishable items , Material need to be held for explosive &
inflammable items
Select The Blank
Question
________ is a fundamental form of economical value.
Correct Answer
Esteem value
Select The Blank
Question
Discrepancies arising out of theft are tends to ________.
Correct Answer
Profit & Loss a/c
Multiple Choice Single Answer
Question
What is Earnest money?
Correct Answer
Fixed amount collected along with Tender
Materials Management - 11
True/False
Question EOQ model is based on the assumption that unit price is
fixed.
Correct Answer True
Multiple Choice Multiple Answer
Question Obsolescence cost is :-
Correct Answer Due stock on hand , Part No. / Name
Multiple Choice Multiple Answer
Question Set-up cost comprises of :-
Correct Answer Work-order cost , Idle time cost
Multiple Choice Single Answer
Question Quantity discounts reduces :-
Correct Answer Procurement cost
Multiple Choice Single Answer
Question The document which is prepared by the engineering department
is :-
Correct Answer Bill of material
Multiple Choice Single Answer
Question Which of the following is not the external factor
influencing materials planning?
Correct Answer Corporate objective
Select The Blank
Question Down time means ________.
Correct Answer Time required by equipment to become OK
Multiple Choice Single Answer
Question Security deposit means :-
Correct Answer Amount as reserve-part kept by scrap contractor for
final adjustment
Multiple Choice Single Answer
Question Identifying technical, financial, managerial and quality
assurance capability of the vendors and thereby generate data to serve basis
for preliminary source selection is :-
Correct Answer Source investigation stage
Select The Blank
Question ________specification are usually flexible and can be
altered during consultation with different manufacturers of the equipment.
Correct Answer Equipment
Multiple Choice Single Answer
Question Issues to top up supply to pre-fixed levels of items are :-
Correct Answer Imprest issues
Multiple Choice Multiple Answer
Question Requests for price increase are received on account of the
following reasons :-
Correct Answer Increase in cost of raw materials and boughtout
parts , Changes in tax structure , Added work content
Select The Blank
Question Stock held by company represents ________.
Correct Answer Money
Select The Blank
Question Method suitable for items which are either of purely
seasonal is ________.
Correct Answer Seasonal buying
Multiple Choice Single Answer
Question The buying which is received in staggered lots, each lot at
times may equal EOQ is :-
Correct Answer Contract buying
Multiple Choice Multiple Answer
Question Special advance license for deemed export is granted in
following cases :-
Correct Answer Supply of goods against advance license /Remission
scheme , Supply of goods to export oriented units , Supply of capital goods
to holders of licenses under EPCG Scheme
True/False
Question Supplier's request for price increase should be analysed
patiently by the buyer. A curt 'no' or 'negative' reply spoils
relationships.
Correct Answer True
Multiple Choice Multiple Answer
Question Actions involved in sample validation are :-
Correct Answer Follow up with the supplier until sample submission
, Sample inspection , Feedback on defects and defect prevention
Multiple Choice Multiple Answer
Question Special stores are created where :-
Correct Answer Material need to be held under the control of the
bank , Material need to be held for perishable items , Material need to be
held for explosive & inflammable items
Select The Blank
Question ________ is suitable for procurement of prototypes,
fixtures, development items.
Correct Answer Cost plus percentage of cost.
Select The Blank
Question In instantaneous replenishment system, production rate is
________ .
Correct Answer Infinite
Multiple Choice Single Answer
Question Organization decided to import when :-
Correct Answer Item is not available in the country
Multiple Choice Single Answer
Question Operating systems process data for :-
Correct Answer Routine operations of the depts.
Select The Blank
Question In MRP-1, manufacturing cycle of finished product is
________.
Correct Answer Long
Match The Following
Question -Correct Answer
JIT -Highly vulnerable to supply failures
TPM- Removal of uncertainty
Quality at source -Elimination of incoming inspection
Lower unit cost -JIT
True/False
Question Materials department is service department.
Correct Answer True
Select The Blank
Question Malpractices are ________.
Correct Answer Manipulations by stores staff
True/False
Question Value analysis is necessary when company's profits soars.
Correct Answer False
Match The Following
Question -Correct Answer
Fast moving items -Very near to the issue counter
Antibiotics -In a air conditioned store
Costly items like fuel injector- In locked cupboard & away from entrance of
store.
Inflammable & hazardous items- In a separate store
Multiple Choice Multiple Answer
Question Discolourisation of soaps is due to :-
Correct Answer Exposure to light , Moisture
Multiple Choice Multiple Answer
Question Following are benefits of scientific stoke management :-
Correct Answer Reduction in downtime by efficient issues ,
Inventory control , Very less time required to identify & issue material
Multiple Choice Multiple Answer
Question Following special schemes are announced by Indian Government
under which import can be permitted at zero duty or at less duty :-
Correct Answer Export promotion capital goods scheme , Diamond
&Jewellary promotion scheme , Import by 100% export oriented units
True/False
Question Post parcel consignments are cleared through customs &
clearance is done through foreign post office.
Correct Answer True
True/False
Question Number of free days allowed for air consignments is 15 days
from the flight date.
Correct Answer False
True/False
Question The trade discount is not allowed as a percentage of
published price.
Correct Answer False
Multiple Choice Multiple Answer
Question Receiving inspector should have to :-
Correct Answer Segregate defectives , Maintain vendor wise quality
records
Multiple Choice Single Answer
Question Supplier may be asked to provide assistance for the first
few days of working so that production losses can be avoided is known as :-
Correct Answer Spare part and supply contracts
Select The Blank
Question All incoming materials are insured against ________
Correct Answer Damage / loss
True/False
Question Make or buy decision are of common concern to both materials
and production department.
Correct Answer True
Multiple Choice Single Answer
Question Inflammable storage areas should be :-
Correct Answer Well insulated
Multiple Choice Multiple Answer
Question The sub system of numerical system involves following :-
Correct Answer Sequential code , Decimal code , Block code system
Multiple Choice Single Answer
Question Stock-out is due to :-
Correct Answer Delay in deliveries
Select The Blank
Question ________is reimbursement of actual costs plus fixed fee.
Correct Answer Cost plus fixed fee
Select The Blank
Question ________ is essence of purchase order.
Correct Answer Delivery
Multiple Choice Multiple Answer
Question Performance of product requires :-
Correct Answer Functionality , Reliability
True/False
Question Ex-works means sale is made on rail/truck at the station of
dispatch.
Correct Answer False
True/False
Question The trade discount is not allowed as a percentage of
published price.
Correct Answer False
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