EXAM QUESTIONS AND VERIFIED ANSWERS | 2026–2027
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1. A manufacturing manager wants to improve production efficiency without increasing labor
costs. Which action is most likely to improve productivity?
A. Increasing overtime hours indefinitely
B. Reducing product quality standards
C. Streamlining workflow and eliminating bottlenecks
D. Increasing inventory levels regardless of demand
Correct Answer: C. Streamlining workflow and eliminating bottlenecks
Rationale: Productivity improves when resources are used more efficiently. Eliminating bottlenecks
reduces delays and increases output. Overtime can increase costs, reducing quality harms customer
satisfaction, and excessive inventory creates waste.
2. Which forecasting method relies primarily on expert judgment rather than historical numerical
data?
A. Moving average
B. Delphi method
C. Exponential smoothing
D. Regression analysis
Correct Answer: B. Delphi method
Rationale: The Delphi method gathers expert opinions through multiple rounds to develop forecasts.
The other methods are quantitative approaches based on historical data and statistical analysis.
3. A company experiences frequent stockouts of a critical component. What is the most
appropriate first step?
A. Increase product prices
B. Reduce production schedules
C. Analyze inventory control procedures
D. Eliminate safety stock
Correct Answer: C. Analyze inventory control procedures
Rationale: Before making operational changes, management should identify root causes through
inventory analysis. Raising prices or reducing production may not address the underlying issue.
Eliminating safety stock typically worsens stockout problems.
4. Which layout is most suitable for a hospital emergency room?
A. Product layout
B. Fixed-position layout
C. Process layout
D. Continuous-flow layout
,Correct Answer: C. Process layout
Rationale: Hospitals serve diverse patient needs requiring flexibility. Process layouts group similar
resources together and accommodate varying service requirements effectively.
5. What is the primary objective of quality management?
A. Maximize inventory levels
B. Meet or exceed customer expectations
C. Increase production complexity
D. Eliminate employee involvement
Correct Answer: B. Meet or exceed customer expectations
Rationale: Quality management focuses on delivering products and services that satisfy customer
requirements. Inventory levels, complexity, and reduced employee involvement do not define quality
objectives.
6. A project manager must complete a project within a strict deadline. Which tool is most useful
for identifying critical activities?
A. Pareto chart
B. Fishbone diagram
C. Critical Path Method (CPM)
D. Histogram
Correct Answer: C. Critical Path Method (CPM)
Rationale: CPM identifies the sequence of tasks that determines project duration. Delays in critical-
path activities directly affect completion dates.
7. Which inventory category typically receives the highest level of management attention under
ABC analysis?
A. Category C
B. Category B
C. Safety stock
D. Category A
Correct Answer: D. Category A
Rationale: Category A items represent the highest value or impact despite often being few in number.
They require close monitoring and control.
8. What is a key advantage of just-in-time (JIT) inventory systems?
A. Increased storage costs
B. Reduced inventory carrying costs
C. Unlimited supplier flexibility
D. Elimination of demand uncertainty
Correct Answer: B. Reduced inventory carrying costs
Rationale: JIT minimizes inventory levels, lowering storage and holding costs. It does not eliminate
uncertainty and often requires reliable suppliers.
9. A supervisor notices recurring defects from one workstation. What should be done first?
A. Replace all equipment immediately
, B. Increase customer prices
C. Investigate the root cause of defects
D. Ignore minor defects
Correct Answer: C. Investigate the root cause of defects
Rationale: Root-cause analysis identifies the source of quality problems and supports effective
corrective action. Immediate replacement without investigation may waste resources.
10. Which term describes the maximum output a process can achieve under normal conditions?
A. Utilization
B. Capacity
C. Throughput time
D. Lead time
Correct Answer: B. Capacity
Rationale: Capacity refers to the maximum production capability of a system under specified
conditions. Utilization measures how much of that capacity is actually used.
11. A company wants to evaluate supplier performance. Which metric is most relevant?
A. Employee absenteeism rate
B. Marketing conversion rate
C. On-time delivery percentage
D. Advertising reach
Correct Answer: C. On-time delivery percentage
Rationale: Reliable supplier performance is often measured through delivery consistency, quality, and
responsiveness. Marketing metrics are unrelated.
12. Which strategy is most appropriate when demand is highly uncertain?
A. Ignore forecasting
B. Maintain some safety inventory
C. Eliminate inventory tracking
D. Use only historical averages
Correct Answer: B. Maintain some safety inventory
Rationale: Safety stock provides protection against variability in demand and supply. Ignoring
forecasting or inventory management increases operational risk.
13. What does utilization measure?
A. Total labor costs
B. Forecast accuracy
C. Inventory turnover
D. Percentage of capacity being used
Correct Answer: D. Percentage of capacity being used
Rationale: Utilization compares actual output to available capacity and helps managers assess
resource efficiency.