Question 1

If all other factors remain the same, when finished goods inventory investment is increased, service levels typically will:

Options :

A : remain the same.

B : increase in direct (linear) proportion.

C : increase at a decreasing rate.

D : increase at an increasing rate.

Answer: C

Question 2

The primary consideration In maintenance, repair, and operating (MRO) supply systems typically is:

Options :

A : order quantity.

B : stockout costs.

C : carrying costs.

D : shelf life.

Answer: B

Question 3

If the total part failure rate of a machine is 0.00055 failures per hour, what would be the mean time between failures (MTBF) in hours?

Options :

A : 1,818.2

B : 59.99945

C : 1.98

D : 0.99945

Answer: A

Question 4

Substituting capital equipment in place of direct labor can be economically Justified for which of the following scenarios?

Options :

A : Volumes are forecasted to increase

B : Material prices are forecasted to increase

C : Implementing a pull system in production

D : Functional layouts are being utilized

Answer: A

Question 5

Price negotiation is most appropriate when purchasing which of the following product categories?

Options :

A : Commodities

B : Standard products

C : Items of small value

D : Made-to-order (MTO) items

Answer: A

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