Production planning

What is the primary difference between Just-in-Time (JIT) and Just-in-Case (JIC) inventory management?

• JIT keeps minimal stock while JIC maintains large stock reserves

• JIT is more expensive than JIC

• JIC reduces stock levels, whereas JIT increases them

• JIC is only used for perishable goods

Which of the following best describes ‘lead time’ in stock control?

• The time taken from placing an order to receiving the stock

• The time taken to sell stock

• The time taken to manufacture a product

• The time between stock audits

What is buffer stock?

• Stock kept to meet sudden demand or supply disruptions

• The minimum stock level before reordering

• The stock needed for daily operations

• Extra stock stored in warehouses permanently

What does the reorder level indicate in stock control?

• The point at which new stock should be ordered

• The amount of stock used daily

• The stock available at year-end

• The total quantity of stock held

What is the purpose of reorder quantity in stock control?

• It determines the amount of stock to be ordered when reaching the reorder level

• It defines the buffer stock amount

• It ensures the company never runs out of stock

• It sets a fixed stock quantity for every order

How is capacity utilization rate calculated?

• (Actual output ÷ Productive capacity) × 100

• (Total revenue ÷ Total costs) × 100

• (Total workforce ÷ Total machines) × 100

• (Operating costs ÷ Fixed costs) × 100

If a factory has a capacity utilization rate of 60%, what does this imply?

• The factory is operating below full capacity

• The factory is overproducing

• The factory has excessive inventory

• The factory is inefficient

What does defect rate measure?

• The percentage of defective products in production

• The number of customer complaints per year

• The level of quality assurance

• The percentage of products sold at a discount

How is labor productivity measured?

• Output per worker per period

• Total workforce divided by total costs

• Number of working hours per employee

• Output per machine per period

What does capital productivity measure?

• The efficiency of the working capital

• The efficiency of human resources

• The cost of capital investments

• The depreciation of assets