Industrial Management and Engineering Economics (MEng5202)

Exit Exam Tutorial Questions

Chapter One: Basic Management Concepts and Industrial Organization

1. Which one of the following statements is not correct?
a. Management is a goal oriented process
b. Management is a continuous process.
c. Management is a dynamic process.
d. Management is a rigid process.
2. Identify the feature of co-ordination being highlight in the given statement:
“Coordination is not a one-time function; it begins at the planning stage and continue till
controlling.”
a. Coordination ensures unity of action
b. Coordination is an all pervasive function
c. Coordination is a continuous process
d. Coordination is a deliberate function
3. This function of management relating to laying down the foundation for carrying out the
other functions of management successfully is
a. Organising
b. Staffing
c. Planning
d. Controlling
4. Which of the following statements is not true for lower level management?
a. Analyse the business environment and its implications for the survival of the
business.
b. Ensure the quality of the output
c. They strive to reduce the wastage of resources
d. They ensure that the safety standards are maintained within the organisation.
5. Which management function involves setting goals and objectives and creating specific
plans for completing them?
a. Planning
b. Organizing
c. Controlling
d. Easing
6. By exceeding the monthly marketing budget set for a company, a manager would fail to
meet which type of performance measure,
a. Quantity
b. Quality and workmanship
c. Cost and budget control
d. Customer satisfaction
7. If a manager leads team to exceed their monthly goal of new clients, which type of
performance results have they attained.
a. Quantity
b. Quality and workmanship
c. Cost and budget control
d. Customer satisfaction
 8. A business means
a. Industry
b. Commerce
c. Industry & Commerce
d. None of above
9. In what order mangers perform their managerial functions
a. A organizing, planning, controlling, leading
b. B. organizing, leading, planning, controlling
c. C. planning, organizing, leading, controlling
d. D. planning, organizing, controlling, leading
10. A manager who have knowledge of the processes, equipment, and potential problems of
an industry would possess what type of managerial skill.
a. Technical
b. Administrative
c. Interpersonal
d. Organizational

Chapter Two: Plant Design

11. In which layout the production time per unit is generally maximum? Select one:
a. Process
b. Group
c. Product
d. All of these
12. Salary paid to permanent employees during production of a product is a Select one:
a. None of these
b. Variable cost
c. Fixed cost
d. Total cost
13. Out of following which, is/are example of continuous process industry? Select one:
a. Steel plant
b. Sugar plant
c. Oil refineries
d. All of these
14. Which type of analysis/chart assists the layout planner in the choice of type of layout?
Select one:
a. Break even analysis
b. Break even analysis and P-Q chart
c. None of these
d. P-Q chart
15. In which layout the workstations brought to the material. Select one:
a. Fixed position
b. Product
c. Group
 d. Process
16. Which of the following explain the need for facility location selection?
a. When the existing business unit has outgrown its original facilities and expansion
is not possible.
b. When a business is newly started.
c. When the lease expires and the landlord does not renew the lease.
d. All of these.
17. Which of the following is the first step in making a correct location choice?
a. Develop location alternatives
b. Decide the criteria for evaluating location alternatives
c. Evaluate the alternatives
d. Make a decision and select the location
18. Which of the following technique emphasises transportation cost in the determination of
facility location?
a. Location rating factor technique
b. Transportation technique
c. Centre-of-gravity technique
d. Both (b) and (c)
19. In which of the following site selection techniques, a weightage between ‘0’ to ‘1’
provided to factors that influence its location decision.
a. Location rating factor technique
b. Transportation technique
c. Centre-of-gravity technique
d. None of these
20. Which of the following does not cause to production delay?
a. Shortage of space
b. Long distance movement of materials
c. Spoiled work
d. Minimum material handling
21. Process layout also known as ________.
a. Functional layout
b. Batch production layout
c. Straight line layout
d. Both (a) and (b)
22. Which of the following facility layout is best suited for the intermittent type of
production, which is a method of manufacturing several different products using the same
production line?
a. Product layout
b. Process layout
c. Fixed position layout
 d. Cellular manufacturing layout
23. Which of the following is not an advantage of using product layout?
a. Minimum material handling cost
b. Minimum inspection requirement
c. Specialized supervision requirement
d. None of these

Chapter Three: Forecasting

24. Managers use _______________ in forecasting.
a. Judgment
b. Opinion
c. Past experience
d. All of the above
25. A traditional forecasting method is
a. Time series analysis
b. Regression
c. All of the above
d. None of the above
26. ____________ moving averages react more slowly to recent demand changes than do
____________ moving averages.
a. Longer-period / shorter-period
b. Shorter-period / longer-period
c. Longer-period / longer-period
d. Shorter-period / shorter-period
27. ___________ is good for stable demand with no pronounced behavioral patterns.
a. Longer-period moving average
b. Shorter-period moving average
c. Moving average
d. Weighted moving average
28. __________ methods assume that what has occurred in the past will continue to occur in
the future.
a. Time series
b. Regression
c. Quantitative
d. Qualitative
29. In adjusted exponential smoothing, the closer beta is to ____________, the stronger a
trend reflected.
a. –1 / 1
b. -1
c. 0
d. 1
 30. __________ is the difference between the forecast and actual demand.
a. Forecast mistake
b. Forecast error
c. MAD
d. Forecast accuracy
31. __________ is the average, absolute difference between the forecast and demand.
a. Forecast accuracy
b. Forecast error
c. MAD
d. Forecast mistake
32. The lower the value of the ________, relative to the magnitude of the data, the more
accurate the forecast.
a. Forecast accuracy
b. Forecast mistake
c. Mad
d. Forecast error
33. ___________ is absolute error as a percentage of demand.
a. Cumulative error
b. MAD
c. MAFD
d. Average error
34. The method that considers several variables that are related to the variable being
predicted is
a. Multiple regression
b. Moving Average
c. Adjusted smoothing
35. Given last period's forecast of 65, and last period's demand of 62, what is the simple
exponential smoothing forecast with an alpha of 0.4 for the next period?
a. 62
b. 65
c. 63.2
d. 63.8

Chapter Four: Materials Management

36. To get the most profit, a company should________
a. Provide little customer service
b. Provide high production costs
c. Provide the lowest inventory investment
d. Provide the highest distribution costs
37. Finance must keep investment and costs low. This can be done by___________
a. Increasing inventory so inventory investment is at a maximum
b. Decreasing the number of plants and warehouses
c. Producing small quantities
d. Using short production runs
38. To get the most profit, a company should________
a. Provide little customer service
b. Provide high production costs
c. Provide the lowest inventory investment
d. Provide the highest distribution costs
39. Purchasing and ___________ represent the implementation and control phase of the
production planning and control system.
a. Production activity control (PAC)
b. Material requirements planning (MRP)
c. Just-in-time (JIT)
d. Marketing
40. A _________ strategy means producing the amounts demanded at any given time.
a. Production leveling
b. Chase
c. Subcontracting
d. TQM
41. __________ inventory is held to cover random unpredictable changes in supply and
demand or lead time.
a. Anticipation
b. Fluctuation
c. Lot-size
d. Transportation
42. Storing inventory requires _____________and as inventory increases, so do these costs.
a. Space and workers
b. Workers and equipment
c. Space and equipment
d. Space, workers, and equipment
43. The risks in carrying inventory are:
a. Obsolescence and damage
b. Damage and pilferage
c. Pilferage and deterioration
d. Obsolescence, damage, pilferage, and deterioration
44. ___________ is the process of multiplying the requirements by the usage quantity and
recording the appropriate requirements throughout the product tree.
a. Offsetting
b. Planning orders
c. Lead time
d. Exploding
45. _______________ means that authorization is given to purchasing to buy the necessary
material or to manufacturing to make the component.
 a. Planned order release
b. Releasing an order
c. Scheduled receipts
d. Open orders
46. The objectives of purchasing include:
a. Obtaining the goods and services at the highest price
b. Obtaining goods and services of the lowest quality
c. Ensuring the best possible service and prompt delivery by the supplier
d. Obtaining goods and services at any quantity
47. A ________________ is a legal offer to purchase.
a. Quotation
b. Purchase order
c. Receiving order
d. Supplier's invoice
48. When the supplier's invoice is received, the following should agree:
a. The purchase order, the receiving report, and the invoice
b. The purchase order, the work order, and the production report
c. The receiving report, the quotation, and the material specification
d. The material specification, the purchase requisition, and the invoice
49. In purchasing an item or service from a supplier, which factor is not included when
specifications are being develop?
a. Delivery requirement
b. Quantity requirements
c. Price requirements
Functional requirement

Chapter Five: Project Management and Resource Allocation

50. A ____ is a set of activities, which networked in an order and aimed towards achieving
the goals of a project.
a. Project
b. Process
c. Project management
d. Project cycle
51. Resources refers to
a. Manpower
b. Machinery
c. Materials
d. All of the above
52. Developing a technology is an example of
a. Process
b. Project
c. Scope
d. All of the above
 53. The project life cycle consists of
a. Understanding the scope of the project
b. Objectives of the project
c. Formulation and planning various activities
d. All of the above
54. Following are the phases of Project Management Life Cycle. Arrange them in correct
order
1. Design, 2. Marketing,
3. Analysis and evaluation, 4. Inspection, testing and delivery
a. 3-2-1-4
b. 1-2-3-4
c. 2-3-1-4
d. 4-3-2-1
55. Resource requirement in project becomes constant while the project is in its _____
progress stage.
a. 40 to 55%
b. 55 to 70%
c. 70 to 80%
d. 80 to 95%
56. The probability of completing the project can be estimated based upon the ____ .
a. Uniform distribution curve
b. Normal distribution curve.
c. U-shaped distribution curve
d. None of the above
57. Which of the following types of Organizational Charts can be BEST used to track project
costs :
a. Hierarchical-type Organizational Chart
b. Organizational Breakdown Structure
c. Resource Breakdown Structure
d. Responsibility Assignment Matrix
58. Root Cause Analysis relates to:
a. Process Analysis
b. Quality Audits
c. Quality Control Measurements
d. Performance Measurements
59. During which stage of Risk planning are risks prioritized based on probability and
impact.
a. Identify Risks
b. Plan Risk responses
c. Perform Qualitative risk analysis
d. Perform Quantitative risk analysis
60. Which of the following may generate a milestone list:
a. Define Activities
b. Sequence Activities
c. Estimate Activity Resources
d. Estimate Activity Durations
 61. A schedule activity may begin 10 days before the predecessor activity finishes. This is an
example of:
a. Finish-to-Start
b. Start-to-Finish
c. Start-to-Start
d. Finish-to-Finish
62. Alice is a Project Manager. She is coordinating a bidder conference to allow vendors to
get clarification on the work that needs to be perform. Which phase of Project
Management is in progress?
a. Conduct Procurements
b. Plan Procurements
c. Control Procurements
d. Close Procurements

Chapter Six: Investment Evaluation

63. If there is an increase in interest rates than the fixed interest rate of the corporate bond
will
a. Return to the corporation
b. Decrease in value
c. Remain unchanged
d. Increase in value
64. Which one of the following is shown first when the assets are arranged in the order of
their liquidity?
a. Investment
b. Cash in hand
c. Debtors
d. None of the above
65. An investor invests in assets known as a
a. Securities
b. Block of Assets
c. Portfolio
d. None of the above
66. Over the period, investors determine the compound growth rate of an investment by
a. Arithmetic median
b. Arithmetic mean
c. Calculus mean
d. Geometric mean
67. Investors agree to invest in high- risk investments if only
a. There is any true speculations
b. The predicted return is satisfactory for taking a risk
c. There are no safe options except for holding cash
d. The return is short
68. In Capital Market Line, every investment is
a. Finitely divisible
b. Infinitely divisible
c. Both a & b
d. None of the above
69. Investments would score high only if there is a protection to
a. Real estate
b. Preferred stock
c. Government bonds
d. Common stock
70. Employment of funds with the aim of achieving additional income is known as____
a. Investment
b. Speculation
c. Gambling
d. Biting
71. _______ is based on tips, rumors and hunches, unplanned and without knowledge of the
exact nature of risk.
a. Investment
b. Speculation
c. Gambling
d. Arbitrage
72. Buying low and selling high, making a large capital gain is associated with ________
a. Investment
b. Speculation
c. Gambling
d. Arbitrage
73. Rising of prices and falling of standard of living is arises at the time of __________
a. Inflation
b. Boom period
c. Normal period
d. Deflation
74. _________ Risks cover the risk of market, interest rate risk and purchasing power risk.
a. Systematic
b. Unsystematic risk
c. Financial
d. Business
75. Risk due to internal environment of a firm or those affecting particular industry are
referred to as ________
a. Unsystematic risk
b. Systematic risk
c. Normal risk
d. Abnormal risk
76. Who called a father of fundamental analysis______?
a. Benjamin Graham
b. Tinbergen
c. William
d. Elliot Wave
77. The fundamental analysis approach has been associated with __________.
a. Uncertainties
b. Certainties
 c. Ratios
d. Balance sheet
78. _________ Analysis refers the study of the variables that influence the future of a firm
both qualitatively and quantitatively.
a. Company analysis
b. Industry analysis
c. Technical analysis
d. Economic analysis
79. Technical analysis is useful________
a. To make an estimate of growth in a stock market
b. To find out the market forces influencing stock market
c. To indicate the direction of the overall market
d. To analyze the economic activity of government.
80. The Dow Theory developed by ________.
a. Stock broker by the name of Dow
b. An editor of Wall Street Journal by the name of Dow
c. It developed by Markowitz and Dow
d. It developed by Sharpe.
81. In Dow Theory, secondary movements are those which last only for a short while are also
known as ________
a. Corrections
b. Random wiggles
c. Narrow movement’s
d. Fluctuations.
82. Elliott wave explains long-term pattern of price behavior of share prices in the major
patterns in _________.
a. Five successive waves
b. Three successive waves
c. Two successive wave
d. Four successive waves
83. Markowitz efficient hypothesis initiated in________
a. 1958
b. 1959
c. 1961
d. 1960
84. ________describes the relationship between systematic risk and expected return for
assets, particularly stocks.
a. CAPM
b. PERT
c. Sharpe ratio
d. Treynor ratio
85. Which type of market efficiency declares that current security prices totally reflect all
information, equally public and private?
a. Weak
b. Semi-strong
 c. Strong
d. None of these
86. The main objective of portfolio is to reduce _______ by diversification.
a. Return
b. Risk
c. Uncertainty
d. Percentage
87. A combination of various investment products like bonds, shares, securities, mutual funds
and so on is called as _______
a. Portfolio
b. Investment
c. Speculation
d. Gambling

Chapter Seven: Basic Accounting Principles & Budgeting Fundamentals

88. The revenues and expenses of a company displayed in which statement?
a. Balance Sheet
b. Cash Flow Statement
c. Income Statement
d. None of the above
89. The main Purpose of Financial Accounting is,
a. To Provide financial information to shareholders
b. To maintain balance sheet
c. To minimize taxes.
d. To keep track of liabilities
90. The expanded accounting equation is used by which statement,
a. Cash Flow Statement
b. Balance Sheet
c. Income Statement
d. None of the above
91. What type of balance do asset accounts have?
a. Contra
b. Credit
c. Debit
d. All of the above
92. What are the long-term assets, which do not have any physical existence?
a. Intangible Assets
b. Tangible Assets
c. Current Liabilities
d. Current Assets
93. When are balance sheets prepared?
a. Quarterly
b. Yearly
c. Monthly
d. None of the above
94. What is Activity Ratio?
 a. Financial Ratios that measure a firm's ability to convert different accounts into a
balance sheet.
b. Ratios that measure a company's ability to pay debt obligations and its margin of
safety.
c. Financial measurements that assess the ability of a company to meet its financial
obligations
d. The ratio that evaluates the company's ability to generate income as compared to
its expenses.
95. What is an operating cycle?
a. A metric that expresses the time (measured in days) it takes a company to convert
its investments in inventory and other resources into cash flows from sales.
b. The time it takes a company to buy goods, sell them and receive cash from the
sale of said goods.
c. The process of hiring personnel to conduct the daily operations of the business.
d. Collective process of identifying, analyzing, and recording the accounting events
of a company.
96. Return on Investment =?
a. Net Sales x 100
b. Fixed Assets x 100
c. Total Assets x 100
d. None of the above
97. Which budget is prepared for Advertising, Salary, and Market Analysis?
a. Operating Budget
b. Sales Expenditure Budget
c. Static Budget
d. Labor Budget
98. What does a master budget include?
a. Material Budget
b. Production Budget
c. Sales Budget
d. All of the above
99. Transaction referred as which event in accounting,
a. Political Event
b. Economic Event
c. Dividend
d. Cash Transaction
100. An Asset possessed by the business should show in which part of balance sheet;
a. Liabilities
b. Assets
c. Revenues
d. Fixed Assets
101. Revenue - Expenses =?
a. Net Income
b. Net Loss
c. Depreciation
d. None of the above
102. How many accounts affected by a business transaction?
a. One
b. Two
c. Three
d. Several
103. Which of the following principles assumes that a business will continue for a long
time?
a. Historical cost
b. Periodicity
c. Objectivity
d. Going concern
104. Which of the following jobs check accounting in ledgers and financial
statements?
a. Financial
b. Audit
c. Management
d. Budget Analysis