Key Concept Quiz


1	PERT refers to:
		A)	Priority Evaluation and Review Technique
		B)	A flowchart system to assist the production process
		C)	Pertinent Employee Recruitment Technique
		D)	A and B


2	The location of a physical facility does not need to be updated because populations, businesses and traffic patterns rarely change.
		A)	True
		B)	False


3	A ________ is designed for factories that manufacture many different or custom-made products.
		A)	Product layout
		B)	Process layout
		C)	Fixed position layout
		D)	Transient position layout


4	Which space is generally most productive in a retail store?
		A)	Space at the back and to the right
		B)	Space at the back and to the left
		C)	Space at the front and to the right
		D)	All space is equally productive


5	Alicia Stone is trying to organize the merchandise in her new clothing store. Which layout type would be ideal for displaying her fashions?
		A)	Free-flow layout
		B)	Random layout
		C)	Grid layout
		D)	Specialty merchandise layout


6	What is the advantage of purchasing merchandise from only one supplier?
		A)	Buyer is assured of consistent quality and may be able to obtain discounts
		B)	The buyer can spread the risk associated with merchandise purchases
		C)	A and B
		D)	None of the above


7	When selecting a supplier, a business owner should evaluate which of the following:
		A)	Dependability of the supplier
		B)	The cost of inventories being purchased
		C)	Additional services offered by the supplier
		D)	All of the above


8	A just-in-time order policy means that:
		A)	Orders are placed so that inventory arrives "just in time"
		B)	Appropriate computer capabilities are needed by the manufacturer
		C)	Suppliers used are dependable
		D)	All of the above


9	Volatility of demand is one of the factors that should be used to determine minimum inventory level required by a business.
		A)	True
		B)	False


10	Determine the inventory quantity required using the minimum turnover method and the following information: Inventory Turnover: 5 Sales: $500,000
		A)	$50,000
		B)	$500,000
		C)	$100,000
		D)	$10,000


11	Which method for determining inventory order quantities requires an owner to know maximum inventory, merchandise on order and merchandise on hand?
		A)	Minimum turnover method
		B)	Maximum and minimum method
		C)	Open-to-buy method
		D)	Economic order quantity


12	What policy and/or procedure might ensure a successful relationship with a supplier?
		A)	Using technology that allows data sharing of product movement and forecasting
		B)	Avoiding quantitative and qualitative evaluation of the supplier
		C)	A and B
		D)	None of the above


13	What method estimates order quantities based on prioritizing types of inventories?
		A)	Economic order quantity
		B)	A-B-C analysis
		C)	Open-to-buy method
		D)	Maximum and minimum method


14	What kind of layout should be used by a manufacturer that mass produces non-customized computers?
		A)	Product layout
		B)	Process layout
		C)	Fixed-position layout
		D)	Random layout


15	A sales production estimate is needed most when:
		A)	Selecting a supplier
		B)	Monitoring and controlling inventory
		C)	Deciding on a store layout
		D)	Determining order quantities

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