1.

What are the three primary components of the logistics function within the conversion
process?

a. Production, Sales, and Marketing

b. Planning, Resource Management, and Operations

c. Engineering, Scheduling, and Maintenance

d. Research and Development, Human Resources, and Warehousing

2. When initiating production in a manufacturing environment, what are the two ways a company
may recognize the need to conduct operations?

a. Through marketing campaigns and promotions

b. By receiving a sales order or desiring to increase inventory stock

c. Based on customer feedback and surveys

d. By conducting market research and analysis

3. What is the primary goal of the inventory control department in a manufacturing company?

a. To maximize idle time

b. To minimize the cost of maintaining inventories

c. To increase the quantity of finished goods in stock

d. To prioritize quantity over quality

4. What is the purpose of a routing slip in the conversion process?

a. To track the physical movement of inventory items

b. To schedule production activities

c. To manage human resources

d. To monitor sales orders

5. In the context of inventory control, what is the role of the shipping department?
a. To manage raw materials inventory

b. To control finished goods inventory

c. To move materials into various production phases

d. To move finished goods from the warehouse to customers/distributors

True or False Questions:

1. The conversion process is only relevant to manufacturing firms and does not apply to service
organizations.

2. The planning component of the logistics function involves determining the timing for
production activities based on sales orders and inventory needs.

3. The goal of the inventory control department is to maximize the cost of maintaining
inventories.

4. Routing involves the issuance and movement of materials into various production phases.

5. The shipping department is responsible for managing raw materials inventory in a

manufacturing company.

1. Often synonymous with the terms "production" and "manufacturing"

a. Operations
b. Operative
c. Assembly
d. Work-in-process

2. Refers to the additional procedures necessary to bring a product to its required

specifications.
a. Remodel
b. Revise
c. Rework
d. Remake

3. It involves recording purchases as raw materials inventory, components of work-in-

process, and the total cost of sales.
a. Perpetual Help System Dalta
b. Perpetual Inventory Systems
c. Periodic Inventory Systems
d. Periodic Inventory Sistems
 4. It represents the differences between actual costs and the standard costs applied.
a. Variety
b. Variant
c. Variable
d. Variances

5. The quantity of inventory on hand by actually counting all items on the premises and in
other areas of the company's responsibility
a. Perpetual Inventory Systems
b. Periodic Inventory Systems
c. Physical Inventory Count
d. Physical Inventory Reconciliation

True or False
1. The more problems a company has a defective products, the more extensive its quality
control processes should become.

2. The extent of a product's defect may be so great that it is cost-effective for it to be

reworked.

3. Materials costs are based on the review of the routing slips and inventory status reports.

4. Perpetual records rely upon the physical inventory counts as a basis for determining the
end-of-period inventory and costs of sales amount.

5. The inventory control should be performed by those responsible for production.

1. Manufacturing has changed in recent years as a result of each of the following factors except

a. globalization

b. technological advances

c. increased competition

d. lack of economic prosperity

2. The term conversion processes is often used synonymously with

a. operations

b. production

c. manufacturing

d. all of the above

3. Which of the following activities is not part of the planning component of the logistics
function?

a. Research and development

b. Capital budgeting

c. Human resource management

d. Scheduling

4. Which of the following activities is an inventory control activity?

a. Engineering

b. Maintenance

c. Routing

d. Quality control

5. Which of the following statements concerning an operations list is true?

a. It is an engineering document that describes the chain of events within a company’s conver-
sion process

[Link] is an engineering document that specifies the product's descriptions and quantities of
component parts.

c. It is a capital budgeting document that describes the chain of events within a company’s
conversion process.

d. . It is a capital budgeting document that specifies the descriptions and quantities of

component parts within a product.
6. Which of the following terms relates to the control of materials being held for future
production?

a. Routing

b. Work‐in‐process

c. Stores

[Link]

7. When additional procedures are necessary to bring a defective product up to its required
specifications, this is referred to as

a. rework

b. scrap

c. work‐in‐process

[Link] reporting

8. For which of the following computerized conversion systems is Walmart well known?

a. CAD/CAM

b. MRP‐II

c. CIMs

[Link]

9. The goal of a physical inventory reconciliation is to

a. determine the quantity of inventory sold

b. compare the physical count with the perpetual records

c. compare the physical count with the periodic records

D. determine the quantity of inventory in the process

10. Which of the following is not considered a benefit of using computerized conversion
systems?

a. Automatic computation of materials requirements

b. Increased sales and cost of sales

c. Increased efficiency and flexibility

D. Early error detection and increased accuracy