Which inventory system focuses on ‘the right material, of the right time, at the right place, and in the exact amount’?
(a) ABC analysis
(b) FSN analysis
(c) JIT analysis
(d) VED analysis
The classification of items in ABC analysis is done on the basis of:
(a) Quantity of materials consumed
(b) Frequency or priority of consumption of materials
(c) Investment in materials only
(d) Value and importance
Which one is true?
(a) The point at which the slopes, ordering costs and carrying costs curves are equal but of opposite direction, determines the EOQ.
(b) Generally a large number of items of inventory claim a large proportion of total value of all inventories
(c) Inventory in relation to total working capital has similar proportions over a business cycle
(d) Lager the safety stocks a firm keeps, greater is its scope for speculation on inventory
Which of the following will lead to decrease in economic order quantity?
(a) Increase in ordering cost
(b) Increase in carrying cost
(c) Increase in safety stock
(d) Increase in procurement time
A company buys 8000 units of an item for its annual requirement. Each unit costs Rs.10, the ordering cost per order is Rs. 30 and the carrying cost is 7.5% of the average inventory per year. The economic order quantity will be
(a) 566 units
(b) 800 units
(c) 2530 units
(d) 900 units
Reorder level is calculated as
(a) Average daily usage rate × Lead time in days
(b) Minimum consumption × Minimum reorder period
(c) ½ of (Minimum + Maximum consumption)
(d) Maximum level – Minimum level
In the ABC Analysis system the B category stands for
(a) Outstanding importance in value
(b) Comparatively unimportant in value
(c) Comparatively important in value
(d) Average importance in value
Stores Ledger is
(a) Quantitative as well as value wise records of material received, issued and balance
(b) Quantitative record of material received, issued and balance
(c) Value wise record of material received issued and balance
(d) A record of labor attendance
Raw materials are assigned to a job when
(a) Materials are purchased
(b) Materials are issued by the materials store room.
(c) Materials are received from the vendor
(d) Job is sold
The type of spoilage that does not affect the cost of inventories is –
(a) Normal spoilage
(b) Standard spoilage
(c) Abnormal spoilage
(d) Seasonal spoilage
