CBM CBM Supply Chain & Operations Management 2

Question 1

What is the Economic Order Quantity (EOQ) model designed to determine?

Accepted Answer

The optimal order size that minimizes total inventory ordering and holding costs

Answer

EOQ calculates the order quantity that balances ordering costs against inventory holding costs to achieve the lowest possible total inventory cost.

Question 2

Which operations management tool uses a visual representation of material and information flow to identify waste and inefficiencies in a process?

Accepted Answer

Value Stream Mapping

Answer

Value Stream Mapping is a lean tool that visually depicts every step in a process, highlighting non-value-adding activities and waste to guide improvement efforts.

Question 3

A manufacturer wants to assess supplier reliability. Which metric measures the percentage of orders delivered on time and in full?

Accepted Answer

Perfect Order Rate (OTIF)

Answer

On Time In Full (OTIF) or Perfect Order Rate measures the percentage of orders that are delivered complete, on time, damage-free, and with correct documentation.

Question 4

In operations management, what does the term 'throughput' refer to?

Accepted Answer

The rate at which a system generates revenue through sales

Answer

In the Theory of Constraints, throughput is defined as the rate at which the system generates money through sales, excluding totally variable costs.

Question 5

Which quality management concept refers to the total cost associated with preventing, detecting, and correcting defective products?

Accepted Answer

Cost of Quality (COQ)

Answer

Cost of Quality categorizes quality-related expenses into prevention costs, appraisal costs, and failure costs (internal and external) to highlight the financial impact of quality decisions.

CBM - Certified Business Manager Practice Test

CBM - Certified Business Manager Practice Test

CBM CBM Supply Chain & Operations Management 2