Unit: 4 Materials Management and Inventory Control Short Questions
Unit: 4 Materials Management and Inventory Control
Multiple Choice Questions 1.0
1. What is the primary objective of materials management in an organization?
- A. To reduce employee turnover
- B. To plan, direct, control, and coordinate activities related to materials and inventory requirements
- C. To increase marketing and sales activities
- D. To improve customer satisfaction levels
Answer: B. To plan, direct, control, and coordinate activities related to materials and inventory requirements
2. Which of the following is NOT a component of materials management?
- A. Purchase & Contract Management
- B. Marketing Management
- C. Supply Chain & Logistics Management
- D. Inventory Management
Answer: B. Marketing Management
3. Which activity is NOT involved in materials management?
- A. Purchasing
- B. Expediting
- C. Market Research
- D. Transportation
Answer: C. Market Research
4. What is the first step in the purchasing procedure?
- A. Placing the order
- B. Receiving Purchase Requisition slips
- C. Determination of Purchase Budget
- D. Checking the Invoices
Answer: C. Determination of Purchase Budget
5. Who typically handles the purchasing function in a small industry?
- A. CEO
- B. Store Manager
- C. Works Manager
- D. Marketing Manager
Answer: C. Works Manager
6. Which of the following is a function of store management?
- A. Forecasting demand
- B. Recruiting and training workforce
- C. Setting sales targets
- D. Designing marketing campaigns
Answer: B. Recruiting and training workforce
7. What does a Bin Card primarily help with in inventory management?
- A. Accounting
- B. Marketing
- C. Quality Control
- D. Informing the storekeeper of the quantities of each item on hand
Answer: D. Informing the storekeeper of the quantities of each item on hand
8. Which of the following is NOT a type of inventory?
- A. Raw Material Inventory
- B. In-process Inventory
- C. Marketing Inventory
- D. Finished Product Inventory
Answer: C. Marketing Inventory
9. Which inventory management technique involves estimating the optimum quantity of material to be purchased to minimize inventory maintenance cost?
- A. ABC Analysis
- B. EOQ (Economic Order Quantity)
- C. VED Analysis
- D. FIFO (First in First Out)
Answer: B. EOQ (Economic Order Quantity)
10. In VED analysis, what does the ‘V’ stand for?
- A. Valuable
- B. Vital
- C. Variable
- D. Volatile
Answer: B. Vital
11. What does the Break-even Quantity formula determine in an economic context?
- A. The maximum profit level
- B. The number of units that need to be sold to cover the cost
- C. The optimal inventory level
- D. The minimum purchase order quantity
Answer: B. The number of units that need to be sold to cover the cost
12. Which of the following costs are considered fixed costs in a break-even analysis?
- A. Packaging cost
- B. Raw material cost
- C. Labor cost
- D. Depreciation cost
Answer: D. Depreciation cost
FILL IN THE BLANKS Questions 1.0
1. ________ management involves the planning, directing, controlling, and coordinating activities related to materials and inventory requirements.
Answer: Materials
2. Components of materials management include Purchase & Contract Management, Supply Chain & Logistics Management, Stores Management, Inventory Management, and ________ Relationship Management.
Answer: Supplier
3. Activities involved in materials management include Material Requirement Planning (MRP), Purchasing, Inventory Control, Expediting, Transportation, and ________ handling.
Answer: Material
4. The first step in the purchasing procedure is the determination of the purchase ________.
Answer: Budget
5. In a small industry, the purchasing function is typically performed by the ________ manager.
Answer: works
6. A ________ card is used in a store for inventory control and shows details of the quantity of material received, issued, and remaining in stores.
Answer: Bin
7. The three types of inventories are Raw Material Inventory, In-process Inventory, and ________ Product Inventory.
Answer: Finished
8. The ________ analysis in inventory management classifies items into Vital, Essential, and Desirable categories.
Answer: VED
9. In inventory management, EOQ stands for Economic ________ Quantity, which estimates the optimal order quantity to minimize costs.
Answer: Order
10. The ABC analysis method in inventory management classifies items into three categories: A for highly important, B for moderately important, and C for ________ important.
Answer: less