GMS401 - Practice Test 2: Total Quality Management & Supply Chain Concepts latest
update 2026
1. What is the primary goal of Total Quality Management (TQM)?
a) Maximizing revenue
b) Customer satisfaction
c) Reducing competition
d) Increasing employee turnover
2. Which of the following is NOT a component of the Cost of Quality?
a) Prevention costs
b) Appraisal costs
c) Production costs
d) External failure costs
3. Six Sigma aims to achieve a defect rate of how many defects per million opportunities?
a) 6.7
b) 3.4
c) 1.2
d) 10.5
4. The Taguchi Loss Function is used to quantify:
a) The financial impact of quality deviations
b) Employee productivity
c) Market share losses
d) Production costs
5. What is the purpose of a Pareto chart in quality management?
a) To identify the most significant quality issues
b) To display employee performance
c) To track daily revenue
d) To analyze sales trends
.6. Which inventory management technique prioritizes items based on their value
contribution to the total inventory?
a) EOQ Model
b) ABC Analysis
c) JIT Inventory
d) Kanban System
7. What is the primary purpose of the Economic Order Quantity (EOQ) model?
a) To maximize the inventory level
b) To minimize total inventory costs
c) To increase stockouts
d) To decrease supplier relationships
8. In supply chain management, what does "bullwhip effect" refer to?
a) A supply chain strategy to increase profits
b) A reduction in inventory fluctuations
c) Increased demand variability moving upstream in the supply chain
d) A method for reducing logistics costs
, 9. Just-In-Time (JIT) inventory system aims to:
a) Increase inventory levels to prevent stockouts
b) Reduce waste by receiving goods only when needed
c) Increase production costs
d) Eliminate all supplier relationships
10. Which of the following is a key principle of Lean Manufacturing?
a) Increasing defects to measure performance
b) Eliminating waste and improving efficiency
c) Reducing the use of automation
d) Increasing production time
11. Which of the following supply chain strategies focuses on reducing variability and
improving information sharing?
a) Vendor Managed Inventory (VMI)
b) Economic Order Quantity (EOQ)
c) Just-In-Time (JIT)
d) Bulk Ordering
12. In an EOQ model, increasing the order quantity will generally result in:
a) Increased total inventory costs
b) Decreased ordering costs but increased holding costs
c) Decreased both ordering and holding costs
d) No effect on costs
13. What is the primary benefit of using RFID technology in supply chain management?
a) Reducing lead times by automating order processing
b) Increasing manual tracking efforts
c) Minimizing product quality
d) Eliminating inventory storage needs
14. Which of the following is an example of a "pull" inventory system?
a) Economic Order Quantity (EOQ)
b) Vendor Managed Inventory (VMI)
c) Just-In-Time (JIT)
d) Bulk Ordering
15. The bullwhip effect is primarily caused by:
a) Accurate forecasting techniques
b) Demand distortion in supply chain information flow
c) Perfectly balanced inventories
d) Low variability in ordering patterns
16. What is the key objective of a Lean Supply Chain?
a) Increasing inventory levels to meet demand
b) Reducing waste and improving responsiveness
c) Expanding supply chain length
d) Increasing supplier lead times
update 2026
1. What is the primary goal of Total Quality Management (TQM)?
a) Maximizing revenue
b) Customer satisfaction
c) Reducing competition
d) Increasing employee turnover
2. Which of the following is NOT a component of the Cost of Quality?
a) Prevention costs
b) Appraisal costs
c) Production costs
d) External failure costs
3. Six Sigma aims to achieve a defect rate of how many defects per million opportunities?
a) 6.7
b) 3.4
c) 1.2
d) 10.5
4. The Taguchi Loss Function is used to quantify:
a) The financial impact of quality deviations
b) Employee productivity
c) Market share losses
d) Production costs
5. What is the purpose of a Pareto chart in quality management?
a) To identify the most significant quality issues
b) To display employee performance
c) To track daily revenue
d) To analyze sales trends
.6. Which inventory management technique prioritizes items based on their value
contribution to the total inventory?
a) EOQ Model
b) ABC Analysis
c) JIT Inventory
d) Kanban System
7. What is the primary purpose of the Economic Order Quantity (EOQ) model?
a) To maximize the inventory level
b) To minimize total inventory costs
c) To increase stockouts
d) To decrease supplier relationships
8. In supply chain management, what does "bullwhip effect" refer to?
a) A supply chain strategy to increase profits
b) A reduction in inventory fluctuations
c) Increased demand variability moving upstream in the supply chain
d) A method for reducing logistics costs
, 9. Just-In-Time (JIT) inventory system aims to:
a) Increase inventory levels to prevent stockouts
b) Reduce waste by receiving goods only when needed
c) Increase production costs
d) Eliminate all supplier relationships
10. Which of the following is a key principle of Lean Manufacturing?
a) Increasing defects to measure performance
b) Eliminating waste and improving efficiency
c) Reducing the use of automation
d) Increasing production time
11. Which of the following supply chain strategies focuses on reducing variability and
improving information sharing?
a) Vendor Managed Inventory (VMI)
b) Economic Order Quantity (EOQ)
c) Just-In-Time (JIT)
d) Bulk Ordering
12. In an EOQ model, increasing the order quantity will generally result in:
a) Increased total inventory costs
b) Decreased ordering costs but increased holding costs
c) Decreased both ordering and holding costs
d) No effect on costs
13. What is the primary benefit of using RFID technology in supply chain management?
a) Reducing lead times by automating order processing
b) Increasing manual tracking efforts
c) Minimizing product quality
d) Eliminating inventory storage needs
14. Which of the following is an example of a "pull" inventory system?
a) Economic Order Quantity (EOQ)
b) Vendor Managed Inventory (VMI)
c) Just-In-Time (JIT)
d) Bulk Ordering
15. The bullwhip effect is primarily caused by:
a) Accurate forecasting techniques
b) Demand distortion in supply chain information flow
c) Perfectly balanced inventories
d) Low variability in ordering patterns
16. What is the key objective of a Lean Supply Chain?
a) Increasing inventory levels to meet demand
b) Reducing waste and improving responsiveness
c) Expanding supply chain length
d) Increasing supplier lead times
