Unit 3 Progress Check MCQ: Test Your Understanding

Introduction

Are you ready to assess your progress in Unit 3? This comprehensive progress check will test your grasp of the key concepts covered so far. Engage with these multiple-choice questions (MCQs) to identify areas where you excel and areas that require further attention.

MCQs

1. Which of the following is a primary goal of inventory management?
   (a) Reduce holding costs
   (b) Increase customer satisfaction
   (c) Improve production efficiency
   (d) Enhance financial performance

   

2. The minimum level of inventory that must be maintained to avoid stockouts is known as:
   (a) Safety stock
   (b) Lead time inventory
   (c) Cycle stock
   (d) Economic order quantity

3. Which inventory management technique uses a formula to determine the optimal order quantity?
   (a) EOQ (Economic Order Quantity)
   (b) ABC analysis
   (c) JIT (Just-in-Time)
   (d) FIFO (First-In, First-Out)

4. Which of the following is a benefit of inventory reduction?
   (a) Reduced storage costs
   (b) Improved cash flow
   (c) Enhanced customer service
   (d) Increased sales

5. The lead time for an order is:
   (a) The time it takes to receive the order
   (b) The time it takes to place the order
   (c) The time it takes to manufacture the order
   (d) The time it takes to assemble the order

   

6. Which of the following is NOT a key factor in determining safety stock levels?
   (a) Usage variability
   (b) Lead time
   (c) Service level
   (d) Holding costs

7. The EOQ formula requires which of the following parameters?
   (a) Demand
   (b) Lead time
   (c) Holding cost
   (d) Both (a) and (c)

8. ABC analysis is a technique used to prioritize inventory items based on their:
   (a) Usage
   (b) Value
   (c) Both (a) and (b)
   (d) Neither (a) nor (b)

9. JIT inventory management aims to:
   (a) Eliminate waste and reduce inventory levels
   (b) Increase production efficiency and reduce costs
   (c) Improve customer service and increase sales
   (d) Enhance cash flow and reduce holding costs

10. FIFO is an inventory valuation method that assumes:
    (a) Older inventory is used before newer inventory
    (b) Newer inventory is used before older inventory
    (c) Inventory is used in the order in which it is acquired
    (d) Inventory is used in a random order

Answer Key

1. (d)
2. (a)
3. (a)
4. (b)
5. (a)
6. (d)
7. (d)
8. (c)
9. (a)
10. (a)

Conclusion

Congratulations! You have completed the Unit 3 Progress Check MCQ. By reviewing your answers, you can identify areas where your understanding is strong and areas that need further development. Use this feedback to optimize your preparation for future assessments and assignments.