Question

QUESTION 30

The total output from a production system in one day is 500 units and the total labor necessary to produce these 500 units is 250 hours. Using the appropriate productivity measure, which of the following numbers represents the resulting productivity?

a. 1.000

b. 1.428

c. 0.700

d. 0.411

e. None of these.

QUESTION 31

The basic EOQ model includes

a. annual holding and shortage costs.

b. annual ordering and holding costs.

c. annual stockout and ordering costs.

d. annual carrying and holding costs.

e. none of these.

QUESTION 32

A rice mill in south Louisiana has purchased the trucking firm that transports its packaged rice products to the distributors. This is an example of

a. horizontal integration.

b. forward integration.

c. backward integration.

d. current transformation.

e. keiretsu.

QUESTION 33

The EOQ is optimal because it

a. minimizes the total inventory cost.

b. minimizes the inventory ordering cost.

c. minimizes the inventory holding cost.

d. maximizes the on-hand inventory.

e. does none of these.

QUESTION 34

As a determinant of quality, reliability refers to

a. the ability of a product to perform service consistently, dependably, and correctly.

b. the useful life of the product.

c. service after sale.

d. the ability of the product’s manufacturer to convey trust and confidence.

e. none of the above.

Answer 1

Question – 30:

Output = 500

Labor necessary = 250 hours

Productivity = output/labor hours = 500/250 = 2 units per hour

Answer is: (e) None of these.

Question – 31:

Basic EOQ Model is

EOQ = square_root_of(2*Demand*ordering cost/holding cost)

Answer is: (b) Annual ordering and holding cost

Question – 32:

Answer is: (b) Forward Integration.

Explanation: vertical integration with control over distribution exists here. Hence this is an example of forward integration.

Question – 33:

Answer is: (a) Minimizes the total inventory cost

Explanation: EOQ is the optimal ordering quantity which minimizes the total cost of inventory, i.e., ordering cost + holding cost + purchase cost

Question – 34:

Answer is: (a) the ability of a product to perform service consistently, dependably, and correctly.

Explanation: Reliability refers to how consistent the process/product/service is. It also defines how correctly everything happens and the dependability of the process.

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