Master Diploma in Material Management

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Online Examination Detail:

Duration- 120 minutes.

Number of Questions- 60. (Multiple Choice Questions).

10 Questions from each module, each carry 10 marks.

Maximum Marks- 600, Passing Marks- 40%.

There is no negative marking in this module.

Candidate Details

NameEmailPhone Number

1 / 60

1. What is the primary objective of purchasing management?

A. To increase the number of suppliers

B. To acquire goods and services at the lowest possible cost while ensuring quality

C. To minimize the number of purchase orders

D. To delay procurement processes

2 / 60

2. What does “total cost of ownership” (TCO) encompass in supplier selection?

A. Only the initial purchase price of the goods or services

B. The costs associated with the entire lifecycle of the product, including maintenance, support, and disposal

C. The cost of shipping and handling

D. The supplier’s annual revenue

3 / 60

3. Which concept explains the additional benefit derived from consuming one more unit of a good or service?

A. Marginal cost

B. Marginal revenue

C. Marginal utility

D. Total utility

4 / 60

4. In materials management, what is the term used for the cost of ordering and holding inventory?

A. Carrying cost

B. Ordering cost

C. Total cost

D. Fixed cost

5 / 60

5. What is the primary focus of managerial economics?

A. The study of market structures only

B. The application of economic theories and methodologies to business management decisions

C. The analysis of historical economic data

D. The development of new economic theories

6 / 60

6. What is a Request for Quotation (RFQ) used for in the purchasing process?

A. To finalize the purchase contract

B. To request price quotes and terms from potential suppliers

C. To confirm delivery schedules

D. To approve supplier performance

7 / 60

7. Which of the following is NOT typically considered a benefit of effective materials management?

A. Reduced production downtime

B. Improved customer satisfaction

C. Increased supplier lead times

D. Lower inventory holding costs

8 / 60

8. Which purchasing strategy involves buying from multiple suppliers to spread risk and leverage competition?

A. Single sourcing

B. Dual sourcing

C. Multiple sourcing

D. Exclusive sourcing

9 / 60

9. In a codification system, what does a “hierarchical” code structure imply?

A. Codes are random and unrelated

B. Codes are arranged in a logical, tiered order based on categories

C. Codes are not used for classification

D. Codes are defined only by material cost

10 / 60

10. What does the term "lead time" refer to in materials management?

A. The time taken to process an invoice

B. The time between placing an order and receiving the goods

C. The time spent on employee training

D. The time required to produce a finished product

11 / 60

11. Which of the following best describes standardization in materials management?

A. The practice of using different suppliers for the same material

B. Establishing uniform specifications and procedures for materials and processes

C. Customizing materials to meet unique requirements

D. Ignoring industry standards in favor of in-house solutions

12 / 60

12. Standardization often leads to which of the following benefits?

A. Increased operational variability

B. Reduced training requirements

C. Higher production costs

D. Decreased quality control

13 / 60

13. What is the primary purpose of project management?

A. To increase the number of team members

B. To manage risks and uncertainties in project execution

C. To plan, execute, and close projects effectively and efficiently

D. To handle daily operational tasks

14 / 60

14. What is the primary goal of materials management?

A. To maximize material costs

B. To minimize inventory levels

C. To ensure the right materials are available in the right quantity at the right time

D. To delay procurement processes

15 / 60

15. Which of the following is a benefit of implementing a just-in-time (JIT) purchasing system?

A. Increased inventory levels

B. Reduced holding costs and waste

C. Higher procurement costs

D. Longer lead times

16 / 60

16. In the context of managerial economics, what does the term "price elasticity of demand" measure?

A. The change in quantity demanded in response to a change in price

B. The change in supply due to a change in price

C. The effect of consumer income on demand

D. The cost of production relative to output

17 / 60

17. Which of the following is NOT a key function of purchasing management?

A. Supplier selection

B. Quality control

C. Contract negotiation

D. Employee training

18 / 60

18. Which document outlines the goals, deliverables, and resources required for a project?

A. Project Charter

B. Risk Management Plan

C. Work Breakdown Structure (WBS)

D. Project Status Report

19 / 60

19. What does the term “SKU” stand for in materials management?

A. Standard Knowledge Unit

B. Stock Keeping Unit

C. Standard Knowledge Update

D. Stock Keeping Update

20 / 60

20. What does the term “lead time” refer to in purchasing management?

A. The time taken to process a purchase order

B. The time from placing an order to receiving the goods

C. The time spent on supplier negotiations

D. The time taken to complete an invoice

21 / 60

21. Which of the following is a key characteristic of an effective codification system?

A. Complexity and ambiguity

B. Simplicity and uniqueness

C. Random and inconsistent codes

D. High cost of implementation

22 / 60

22. In supplier selection, what is the purpose of a “supplier scorecard”?

A. To provide a detailed history of past supplier transactions

B. To evaluate and score suppliers based on various performance criteria

C. To outline the terms and conditions of supplier contracts

D. To track the number of suppliers used

23 / 60

23. Which of the following is a key benefit of using a Just-In-Time (JIT) inventory system?

A. Increased storage costs

B. Reduced inventory levels and waste

C. Increased order quantities

D. Higher supplier lead times

24 / 60

24. What does the term “baseline” refer to in project management?

A. The initial project plan that includes scope, schedule, and cost

B. The point where project requirements are reviewed

C. The final project deliverables

D. The regular status updates provided to stakeholders

25 / 60

25. Which of the following is NOT a key function of materials management?

A. Product design

B. Procurement

C. Storage

D. Inventory control

26 / 60

26. Why is standardization important in the procurement process?

A. It allows for the purchase of unique and custom materials only

B. It ensures uniformity and compatibility of materials and processes

C. It increases the number of different suppliers used

D. It decreases the accuracy of material specifications

27 / 60

27. What does the term “total cost of ownership” (TCO) refer to in purchasing management?

A. The purchase price of an item only

B. The cost of the item plus its associated costs throughout its lifecycle

C. The cost of transportation only

D. The cost of the item plus its warranty costs

28 / 60

28. Which of the following is NOT typically a result of effective standardization?

A. Improved quality consistency

B. Reduced production efficiency

C. Streamlined processes

D. Enhanced communication and training

29 / 60

29. Which of the following is NOT a phase in the traditional project management lifecycle?

A. Initiation

B. Planning

C. Execution

D. Production

30 / 60

30. In managerial economics, what does "profit maximization" involve?

A. Increasing revenue without regard to costs

B. Setting prices at the highest possible level

C. Achieving the highest possible profit by balancing marginal cost and marginal revenue

D. Minimizing costs without considering revenue

31 / 60

31. In purchasing management, what is the purpose of a “purchase order” (PO)?

A. To confirm the shipment of goods

B. To place an official order for goods or services with a supplier

C. To record supplier payments

D. To evaluate supplier performance

32 / 60

32. What is “stakeholder management” in project management?

A. The process of managing project budgets

B. The process of identifying and managing the expectations and influence of project stakeholders

C. The process of scheduling project tasks

D. The process of developing the project scope

33 / 60

33. Which project management methodology focuses on iterative development and incremental delivery?

A. Waterfall

B. Agile

C. PRINCE2

D. Critical Path Method (CPM)

34 / 60

34. In project management, what is the “critical path”?

A. The path with the highest cost in the project

B. The sequence of project activities that determines the shortest possible duration

C. The path with the most resources allocated

D. The path that involves the most stakeholders

35 / 60

35. Which factor is crucial when evaluating a supplier’s ability to meet delivery requirements?

A. Supplier’s marketing strategy

B. Supplier’s on-time delivery history

C. Supplier’s corporate social responsibility activities

D. Supplier’s office location

36 / 60

36. Which of the following is an example of a codification system?

A. ISO 9001 Certification

B. Universal Product Code (UPC)

C. Total Quality Management (TQM)

D. Just-In-Time (JIT) inventory

37 / 60

37. Which of the following is a key benefit of establishing long-term relationships with suppliers?

A. Increased variability in pricing

B. Reduced trust and collaboration

C. Greater stability in supply and potential for improved terms

D. Decreased supplier performance

38 / 60

38. Which inventory system involves keeping a continuous record of inventory levels and costs?

A. Periodic inventory system

B. Perpetual inventory system

C. Just-In-Time system

D. ABC system

39 / 60

39. What is the primary purpose of codification in materials management?

A. To reduce inventory levels

B. To simplify and streamline the identification of materials

C. To increase the complexity of inventory systems

D. To eliminate the need for inventory tracking

40 / 60

40. Which of the following criteria is NOT typically considered when evaluating suppliers?

A. Price

B. Delivery performance

C. Supplier’s location

D. Supplier’s personal hobbies

41 / 60

41. What is the purpose of Material Requirements Planning (MRP)?

A. To forecast future demand

B. To plan inventory requirements based on production schedules

C. To manage supplier relationships

D. To reduce lead times

42 / 60

42. What is the "break-even point" in financial analysis?

A. The level of sales at which total revenue equals total cost, resulting in zero profit

B. The maximum level of profit achievable

C. The point at which fixed costs are covered but variable costs are not

D. The minimum sales required to enter a market

43 / 60

43. What is the purpose of a "Work Breakdown Structure" (WBS)?

A. To allocate project budgets

B. To identify and organize the total scope of a project into manageable components

C. To schedule project activities

D. To analyze project risks

44 / 60

44. What is a “Request for Quotation” (RFQ) used for?

A. To negotiate the final terms of a contract

B. To obtain price quotes and terms from potential suppliers

C. To place an official order with a supplier

D. To assess the quality of delivered goods

45 / 60

45. Which term describes a market situation where firms compete on the basis of product differences rather than price?

A. Perfect competition

B. Monopoly

C. Monopolistic competition

D. Oligopoly

46 / 60

46. Which of the following best describes "marginal cost"?

A. The total cost divided by the number of units produced

B. The cost incurred for producing one additional unit of output

C. The fixed cost of production

D. The variable cost per unit of output

47 / 60

47. What does the term “supplier audit” refer to?

A. A review of the supplier’s financial statements

B. A systematic examination of a supplier’s operations and practices

C. An annual assessment of supplier contracts

D. A survey of customer satisfaction with suppliers

48 / 60

48. What is an important consideration when assessing the financial stability of a supplier?

A. The supplier’s industry awards

B. The supplier’s credit rating and financial health

C. The supplier’s brand reputation

D. The supplier’s employee turnover rate

49 / 60

49. What is a common benefit of codification in inventory management?

A. Increased redundancy

B. Improved accuracy in tracking and reporting

C. Higher material costs

D. Reduced procurement efficiency

50 / 60

50. What is a "monopoly"?

A. A market structure with many firms competing with each other

B. A market structure with many firms competing with each other

C. A market structure with several firms offering similar products

D. A situation where no firms are present in the market

51 / 60

51. What is a "Gantt chart" used for in project management?

A. Tracking project costs

B. Visualizing the project schedule and task timelines

C. Identifying project stakeholders

D. Documenting project requirements

52 / 60

52. Which document is commonly used to request detailed information from potential suppliers?

A. Request for Proposal (RFP)

B. Purchase Order (PO)

C. Contract Agreement

D. Supplier Evaluation Form

53 / 60

53. What does the concept of “opportunity cost” refer to?

A. The cost of producing a good or service

B. The value of the next best alternative forgone when a decision is made

C. The fixed cost incurred regardless of production levels

D. The total cost of all resources used in production

54 / 60

54. Which of the following is a key consideration when evaluating suppliers?

A. Supplier’s location

B. Supplier’s social media presence

C. Supplier’s ability to meet quality and delivery requirements

D. Supplier’s employee dress code

55 / 60

55. What is the purpose of a “contract” in purchasing management?

A. To outline terms and conditions for a business relationship

B. To list all potential suppliers

C. To provide a summary of supplier evaluations

D. To determine inventory levels

56 / 60

56. What is the primary objective of supplier selection?

A. To increase the number of suppliers

B. To identify suppliers who offer the best combination of price, quality, and service

C. To minimize supplier contact

D. To standardize all supplier contracts

57 / 60

57. What does the ABC analysis of inventory categorize?

A. Suppliers by quality

B. Inventory items by value and importance

C. Production processes by efficiency

D. Costs by department

58 / 60

58. What does the term “scope creep” refer to in project management?

A. The gradual expansion of project scope without proper control

B. The reduction in project scope due to budget cuts

C. The process of defining project goals

D. The adjustment of project timelines

59 / 60

59. In managerial economics, what does "market structure" refer to?

A. The geographical location of firms in a market

B. The number of competitors and the nature of competition within an industry

C. The type of production technology used

D. The legal environment affecting businesses

60 / 60

60. Which inventory management technique aims to reduce inventory holding costs by ordering smaller quantities more frequently?

A. Economic Order Quantity (EOQ)

B. Just-In-Time (JIT)

C. Material Requirements Planning (MRP)

D. ABC Analysis

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