Product Management Production Management 4

Question 1

A product manager is evaluating whether to add a new production line. The break-even analysis shows fixed costs of $500,000 and a contribution margin of $50 per unit. What is the break-even volume?

Accepted Answer

10,000 units

Answer

Break-even volume = Fixed Costs ÷ Contribution Margin = $500,000 ÷ $50 = 10,000 units.

Question 2

Which scheduling approach schedules jobs by starting from the due date and working backward to determine the latest possible start date?

Accepted Answer

Backward scheduling

Answer

Backward scheduling calculates start dates by working back from the due date, minimizing work-in-process time.

Question 3

Statistical Process Control (SPC) uses control charts primarily to:

Accepted Answer

Distinguish between common cause and special cause variation

Answer

SPC control charts signal when process variation is due to an assignable (special) cause requiring investigation, vs. normal random variation.

Question 4

A company applies ABC inventory classification. 'A' items should be managed with:

Accepted Answer

Tight controls, frequent reviews, and accurate records

Answer

A items represent high-value, high-priority inventory requiring strict controls and frequent cycle counts.

Question 5

The Theory of Constraints (TOC) 'Five Focusing Steps' begin with which action?

Accepted Answer

Identify the system's constraint

Answer

TOC's first step is to identify the single constraint that limits the system's throughput before taking any action.

Product Management Practice Test

Product Management Practice Test

Product Management Production Management 4