Operations Management questions and answers

Question: Assume that the EOQ is 40 units and the annual quantity (Q) is 250 units. What is the reorder cycle?

Answer Options: A. 22.3 days B. 40 days C. 58.4 days D. 123 days

Answer: B. 40 days

Question: What is the primary purpose of Material Requirements Planning (MRP)?

Answer Options: A. To provide manufacturing data relative to purchasing and shipping schedules of parts and components B. To improve the accuracy and detail of time schedules for parts and services C. To develop an assembly line estimate of lead time D. To calculate an EOQ relative to manufactured goods

Answer: A. To provide manufacturing data relative to purchasing and shipping schedules of parts and components

Question: Which of the following statements best applies to the primary goal of a Just-in-Time (JIT) stock control system?

Answer Options: A. Zero stock levels are achieved across the supply chain. B. Inventory items are ordered at the point of sale. C. Manufacturing gets completed just-in-time for shipment. D. The need for total quality management no longer exists.

Answer: A. Zero stock levels are achieved across the supply chain.

Question: What general rule is applied in the Pareto classification of stock items?

Answer Options: A. 20/80 rule, where 80% of the items may contribute 20% of the profit B. 40/60 rule, where 40% of the items may contribute 60% of the profit C. 50/50 rule, where 50% of the items may contribute 50% of the profit D. 80/20 rule, where 20% of the items may contribute 80% of the profit

Answer: D. 80/20 rule, where 20% of the items may contribute 80% of the profit

Question: At what point in a stock control graph is the EOQ found?

Answer Options: A. Where total cost equals holding cost B. Where total cost equals ordering cost C. Where ordering cost equals safety stock D. Where holding cost equals ordering cost

Answer: D. Where holding cost equals ordering cost

Question: How do managers assess, or control, a project?

Answer Options: A. They work with an assistant who checks the progress of each process and phase. B. They use a software product that allows anyone working on the project to modify processes. C. They employ a monitoring system for a project so that progress can easily be assessed. D. They recruit an independent reviewer to assess the project’s progress and processes.

Answer: C. They employ a monitoring system for a project so that progress can easily be assessed.

Question: What does the “6” represent in a precedence diagram node?

Answer Options: A. Duration B. Float C. Activity number D. Activity sequence number

Answer: B. Float

Question: Which of the following best describes how to apply project management to a project?

Answer Options: A. Include resources beyond those that are currently available so that future planning is considered. B. Use an open-ended completion date to allow for flexibility. C. Make sure the project is self-contained and involves a set of related activities. D. Make sure the project contains only a set of routine, simple activities.

Answer: C. Make sure the project is self-contained and involves a set of related activities.

Question: Which of the following is used to represent activity in a network diagram?

Answer Options: A. A solid line B. A diamond C. A circle D. A square

Answer: A. A solid line

Question: Which of the following is used to represent an event in a network diagram?

Answer Options: A. A solid line B. A diamond C. A circle D. A square

Answer: C. A circle

Question: Which of the following is a convention that must be applied when drawing a network diagram?

Answer Options: A. Only one event can be joined by one activity. B. All diagrams must have at least three events. C. Each event must have only one subsequent activity. D. Each event must have at least one preceding activity.

Answer: D. Each event must have at least one preceding activity.

Question: What is true about setting times of activities within a network diagram?

Answer Options: A. Time is represented within the lower portion of a diamond. B. A larger circle represents a longer time period. C. A longer line represents a longer time period. D. The length of a line reflects ONLY distance to an event.

Answer: D. The length of a line reflects ONLY distance to an event.

Question: Which estimate is used to establish a project’s critical path?

Answer Options: A. Activity Cost (AC) B. Earliest Finish Time (EFT) C. Labor Utilization (LU) D. Latest Finishing Time (LFT)

Answer: D. Latest Finishing Time (LFT)

Question: What is the PRIMARY objective of a Gantt chart?

Answer Options: A. To determine a project’s critical path B. To control costs of activities C. To depict work done during a specific period D. To sequence project activities

Answer: D. To sequence project activities

Question: Which of the following graphic categories best describes a Gantt chart?

Answer Options: A. Scatter diagram B. Bar chart C. Pie chart D. Ogive

Answer: B. Bar chart

Question: What is one step a project manager takes to assess probabilities relative to project duration?

Answer Options: A. Calculating a Z score B. Applying a binomial probability formula C. Using the Chi-square approach to data analysis D. Performing a linear-series analysis

Answer: A. Calculating a Z score