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Production Engineering & Industrial Management MCQs with Answers (Part 1) – Selection of Site, Plant Layout, Plant Maintenance, Plant Safety & Work Study

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Introduction

Production Engineering and Industrial Management are among the most important subjects for candidates preparing for TNPSC, UPSC Engineering Services, SSC JE, RRB JE, Polytechnic Lecturer, Assistant Engineer (AE), Junior Engineer (JE), PSU, and Diploma recruitment examinations. These topics not only appear in objective examinations but are also useful for technical interviews and departmental promotion tests.

Industrial management focuses on planning, organizing, controlling, and improving manufacturing activities. Production engineering ensures that products are manufactured efficiently, economically, and with the required quality standards. Questions from these subjects are generally concept-based and require a clear understanding of definitions, principles, applications, and industrial practices.

This article provides carefully selected multiple-choice questions (MCQs) covering Selection of Site, Plant Layout, Plant Maintenance, Plant Safety, and Work Study. Each question includes the correct answer and a brief explanation to help reinforce the concept.

Why Study Production Engineering for Competitive Exams?

Production Engineering forms the backbone of manufacturing industries. Government organizations such as BHEL, ISRO, DRDO, Indian Railways, ONGC, IOCL, and various State Public Service Commissions regularly include these topics in technical examinations. A strong understanding of industrial engineering concepts helps candidates solve questions quickly and accurately.

Some of the major areas tested include:

• Factory planning and plant location
• Production systems
• Industrial safety
• Maintenance management
• Work study techniques
• Productivity improvement
• Inventory management
• Quality control

Important Topics Covered in Part 1

• Selection of Site
• Plant Layout
• Plant Maintenance
• Plant Safety
• Work Study

Selection of Site – Overview

Plant location refers to selecting the most suitable geographical location for establishing a manufacturing facility. Choosing an appropriate location influences transportation costs, labour availability, production efficiency, and long-term profitability.

Key Factors Affecting Plant Location

• Availability of raw materials
• Labour availability
• Transportation facilities
• Water supply
• Power supply
• Government policies
• Market proximity
• Climate conditions
• Land cost
• Future expansion possibilities

A well-selected plant location reduces production costs and increases operational efficiency.

Selection of Site MCQs

1. The process of choosing the geographical location for a factory is called

A. Plant Maintenance

B. Plant Location ✅

C. Plant Safety

D. Plant Inspection

Answer: B

Explanation: Plant location refers to selecting the most suitable site for establishing an industrial unit.

2. Which factor is the most important for a cement industry?

A. Airport

B. Railway Station

C. Limestone Availability ✅

D. Hotel Facilities

Answer: C

Explanation: Cement factories are generally located near limestone deposits to reduce transportation costs.

3. Plant location is considered a

A. Daily decision

B. Temporary decision

C. Strategic long-term decision ✅

D. Financial statement

Answer: C

4. Which industry is generally located near sugarcane fields?

A. Textile

B. Automobile

C. Sugar Industry ✅

D. Electronics

Answer: C

5. Which of the following is NOT a factor affecting plant location?

A. Labour

B. Transportation

C. Wall colour ✅

D. Market

Answer: C

6. Government subsidies mainly influence

A. Machine design

B. Plant location ✅

C. Product colour

D. Employee attendance

Answer: B

7. Which transportation mode is most suitable for heavy bulk materials?

A. Air Transport

B. Waterways

C. Railways ✅

D. Bicycle

Answer: C

8. A good plant location mainly aims to

A. Increase production cost

B. Reduce operational cost ✅

C. Increase labour turnover

D. Reduce quality

Answer: B

9. Which industry requires abundant water?

A. Textile Industry ✅

B. Banking

C. Insurance

D. Software

Answer: A

10. Future expansion is considered while

A. Recruiting employees

B. Selecting plant location ✅

C. Purchasing furniture

D. Marketing products

Answer: B

Plant Layout – Overview

Plant layout refers to the physical arrangement of machines, departments, workstations, storage areas, and service facilities within a factory. A good layout minimizes material handling, improves workflow, and increases productivity.

Types of Plant Layout

1. Product Layout
2. Process Layout
3. Fixed Position Layout
4. Cellular Layout
5. Combination Layout

Plant Layout MCQs

11. Plant layout refers to

A. Factory painting

B. Arrangement of machines and departments ✅

C. Recruitment process

D. Product marketing

Answer: B

12. Which layout is most suitable for mass production?

A. Process Layout

B. Product Layout ✅

C. Fixed Position Layout

D. Cellular Layout

Answer: B

13. Which layout is suitable for shipbuilding?

A. Product Layout

B. Process Layout

C. Fixed Position Layout ✅

D. Cellular Layout

Answer: C

14. Process layout is also called

A. Functional Layout ✅

B. Product Layout

C. Straight Line Layout

D. Group Layout

Answer: A

15. The main objective of plant layout is

A. Increase idle time

B. Minimize material handling ✅

C. Increase labour cost

D. Increase inventory

Answer: B

16. Product layout is best suited for

A. Job production

B. Continuous production ✅

C. Repair work

D. Construction work

Answer: B

17. Functional layout is suitable for

A. Low-volume, high-variety production ✅

B. Mass production

C. Continuous production

D. Assembly lines

Answer: A

18. Which layout offers maximum flexibility?

A. Product Layout

B. Process Layout ✅

C. Straight Line Layout

D. Assembly Layout

Answer: B

19. Which layout reduces production time significantly?

A. Product Layout ✅

B. Process Layout

C. Fixed Position Layout

D. Cellular Layout

Answer: A

20. The primary objective of plant layout is to

A. Increase production cost

B. Improve workflow efficiency ✅

C. Increase transportation distance

D. Reduce supervision

Answer: B

Plant Maintenance – Overview

Plant maintenance is the process of keeping machines, equipment, and facilities in good operating condition. Proper maintenance reduces breakdowns, improves reliability, increases machine life, and minimizes production losses.

Types of Maintenance

• Breakdown Maintenance
• Preventive Maintenance
• Predictive Maintenance
• Corrective Maintenance
• Routine Maintenance

Plant Maintenance MCQs

21. Maintenance carried out before machine failure is called

A. Breakdown Maintenance

B. Preventive Maintenance ✅

C. Corrective Maintenance

D. Emergency Maintenance

22. Maintenance after machine failure is

A. Preventive

B. Breakdown Maintenance ✅

C. Predictive

D. Routine

23. Predictive maintenance is based on

A. Guesswork

B. Machine condition monitoring ✅

C. Production quantity

D. Labour availability

24. The main objective of maintenance is to

A. Increase downtime

B. Improve machine reliability ✅

C. Increase repair cost

D. Reduce production

25. Preventive maintenance helps to

A. Increase breakdowns

B. Reduce unexpected failures ✅

C. Reduce quality

D. Increase idle time

26. Lubrication is part of

A. Preventive maintenance ✅

B. Breakdown maintenance

C. Product layout

D. Inventory control

27. Maintenance increases

A. Machine life ✅

B. Production defects

C. Breakdown frequency

D. Idle time

28. Predictive maintenance commonly uses

A. Condition monitoring ✅

B. Random inspection

C. Guesswork

D. Manual records only

29. Which maintenance strategy has the highest risk of unexpected downtime?

A. Breakdown Maintenance ✅

B. Preventive Maintenance

C. Predictive Maintenance

D. Planned Maintenance

30. The primary objective of maintenance management is

A. Maximize equipment availability ✅

B. Increase repair costs

C. Reduce production quality

D. Increase inventory

Plant Safety – Overview

Industrial safety protects employees, equipment, and property from accidents and hazards. Safe working conditions improve productivity, reduce compensation costs, and ensure legal compliance.

Common Safety Measures

• Personal Protective Equipment (PPE)
• Fire extinguishers
• Emergency exits
• Safety training
• Machine guards
• Warning signs
• Housekeeping

Plant Safety MCQs

31. PPE stands for

A. Personal Protective Equipment ✅

B. Public Protection Equipment

C. Plant Protection Equipment

D. Production Protection Equipment

32. Which of the following is NOT PPE?

A. Helmet

B. Gloves

C. Safety Shoes

D. Calculator ✅

33. Machine guards are used to

A. Improve appearance

B. Prevent accidents ✅

C. Increase production cost

D. Reduce supervision

34. Fire extinguishers are used for

A. Decoration

B. Fire protection ✅

C. Cooling machines

D. Painting

35. Safety signs are primarily used to

A. Advertise products

B. Prevent accidents ✅

C. Increase production

D. Decorate the workplace

Work Study – Overview

Work study is a systematic method of improving productivity by analyzing how work is performed. It consists of Method Study and Work Measurement.

Objectives of Work Study

• Increase productivity
• Reduce unnecessary work
• Improve resource utilization
• Establish standard methods
• Reduce production costs

Work Study MCQs

36. Work study consists of

A. Plant layout and safety

B. Method study and work measurement ✅

C. EOQ and inventory

D. PPC and SCM

37. The primary objective of work study is

A. Increase labour cost

B. Improve productivity ✅

C. Increase machine downtime

D. Increase waste

38. Method study aims to

A. Determine the best way to perform a job ✅

B. Increase production cost

C. Recruit workers

D. Improve marketing

39. Work measurement is used to determine

A. Product quality

B. Standard time for a job ✅

C. Selling price

D. Inventory level

40. Which technique is commonly used in work measurement?

A. Stopwatch Time Study ✅

B. Fishbone Diagram

C. Pareto Analysis

D. Histogram

Quick Revision

Practice Tip

After completing these MCQs, revise the definitions, types, advantages, and applications of each topic. Many competitive examinations test conceptual understanding rather than rote memorization.

Excellent. Since you’re building a high-quality educational resource for Ezoic approval, the next section should continue naturally with rich explanations before the MCQs. This improves user engagement and content quality.

Production Engineering & Industrial Management MCQs with Answers (Part 2)

Method Study, Work Measurement, Production Planning & Control (PPC), Principles of Management & Personnel Management

Method Study MCQs with Answers

What is Method Study?

Method Study is one of the most important techniques of Work Study. It is the systematic recording and critical examination of existing and proposed methods of performing work to develop easier, faster, safer, and more economical methods.

The main purpose of Method Study is to eliminate unnecessary operations, reduce fatigue, improve productivity, and establish standardized procedures. Industries use Method Study to reduce production costs without affecting product quality.

Objectives of Method Study

• Improve production efficiency
• Eliminate unnecessary operations
• Reduce worker fatigue
• Minimize production cost
• Improve workplace safety
• Increase machine utilization
• Standardize working methods

Steps in Method Study (SREDIM)

The standard procedure followed in Method Study is remembered by the acronym SREDIM:

Method Study MCQs

41. Method Study is mainly concerned with

A. Improving work methods ✅

B. Employee salary

C. Product marketing

D. Factory decoration

Answer: A

42. The first step in Method Study is

A. Record

B. Select ✅

C. Examine

D. Develop

Answer: B

43. Which is the last step of Method Study?

A. Install

B. Record

C. Maintain ✅

D. Develop

Answer: C

44. SREDIM stands for

A. Select, Record, Examine, Develop, Install, Maintain ✅

B. Select, Reduce, Evaluate, Design, Improve, Measure

C. Study, Record, Evaluate, Design, Inspect, Maintain

D. None of these

Answer: A

45. Which chart is widely used in Method Study?

A. Flow Process Chart ✅

B. Control Chart

C. Histogram

D. Pareto Chart

Answer: A

46. Method Study mainly helps in

A. Increasing production cost

B. Improving productivity ✅

C. Increasing labour turnover

D. Increasing defects

47. Which activity does NOT add value to a product?

A. Machining

B. Inspection

C. Transportation without purpose ✅

D. Assembly

48. The primary objective of Method Study is

A. Reduce unnecessary work ✅

B. Increase machine breakdown

C. Increase labour cost

D. Increase inventory

49. Which symbol represents an operation in a Process Chart?

A. Circle ✅

B. Square

C. Triangle

D. Arrow

50. Method Study belongs to

A. Work Study ✅

B. Inventory Control

C. Quality Control

D. Marketing

Work Measurement

Introduction

Work Measurement is the process of determining the standard time required by a qualified worker to complete a specified job under normal working conditions.

It is widely used in manufacturing industries for production planning, scheduling, labour costing, incentive schemes, and productivity improvement.

Objectives of Work Measurement

• Establish standard time
• Improve productivity
• Estimate labour requirements
• Prepare production schedules
• Improve cost estimation
• Develop wage incentive plans

Techniques of Work Measurement

• Stopwatch Time Study
• Work Sampling
• Predetermined Motion Time System (PMTS)
• Analytical Estimation
• Standard Data Method

Important Formula

Standard Time = Normal Time × (1 + Allowance)

Allowances include:

• Personal Allowance
• Fatigue Allowance
• Delay Allowance

Work Measurement MCQs

51. Work Measurement determines

A. Product quality

B. Standard time ✅

C. Selling price

D. Inventory level

52. Which instrument is commonly used in Time Study?

A. Stopwatch ✅

B. Thermometer

C. Vernier Caliper

D. Micrometer

53. Standard Time consists of

A. Basic Time only

B. Normal Time + Allowance ✅

C. Idle Time

D. Delay Time

54. Fatigue Allowance is provided to

A. Reduce worker tiredness ✅

B. Increase production cost

C. Reduce wages

D. Improve marketing

55. Work Sampling is based on

A. Random observations ✅

B. Continuous timing

C. Guess work

D. Trial and error

56. Which technique is suitable for repetitive jobs?

A. Stopwatch Time Study ✅

B. Marketing Survey

C. Product Testing

D. Advertising

57. Time Study was developed by

A. Frederick W. Taylor ✅

B. Henri Fayol

C. Max Weber

D. Elton Mayo

58. Standard Time is generally

A. Less than Normal Time

B. Equal to Basic Time

C. Greater than Normal Time ✅

D. Zero

59. PMTS stands for

A. Predetermined Motion Time System ✅

B. Product Motion Testing System

C. Plant Maintenance Technical System

D. Production Measurement Time Standard

60. Which allowance is given for unavoidable delays?

A. Delay Allowance ✅

B. Quality Allowance

C. Machine Allowance

D. Transport Allowance

Production Planning and Control (PPC)

Introduction

Production Planning and Control (PPC) is the process of planning, organizing, directing, and controlling production activities to ensure products are manufactured in the required quantity, quality, and time at minimum cost.

PPC coordinates men, machines, materials, methods, and money for efficient production.

Objectives of PPC

• Optimum utilization of resources
• Timely production
• Reduce manufacturing cost
• Improve customer satisfaction
• Minimize idle time
• Improve coordination

Functions of PPC

• Forecasting
• Routing
• Scheduling
• Loading
• Dispatching
• Follow-up
• Inspection
• Corrective Action

PPC MCQs

61. PPC stands for

A. Production Planning and Control ✅

B. Product Planning Committee

C. Plant Process Control

D. Production Process Committee

62. Routing determines

A. Production path ✅

B. Selling price

C. Labour salary

D. Product quality

63. Scheduling decides

A. Sequence and timing of work ✅

B. Machine colour

C. Factory location

D. Employee attendance

64. Dispatching means

A. Issuing work orders to begin production ✅

B. Selling finished products

C. Purchasing raw materials

D. Recruiting workers

65. Follow-up ensures

A. Production progress is monitored ✅

B. Product advertisement

C. Factory expansion

D. Inventory purchase

66. PPC mainly aims to

A. Increase idle time

B. Improve production efficiency ✅

C. Increase labour turnover

D. Increase production cost

67. Which function comes after routing?

A. Scheduling ✅

B. Marketing

C. Maintenance

D. Packaging

68. Inspection is mainly concerned with

A. Product quality ✅

B. Advertising

C. Employee attendance

D. Market demand

69. PPC improves

A. Coordination among departments ✅

B. Product colour

C. Factory decoration

D. Office furniture

70. Which is NOT a function of PPC?

A. Scheduling

B. Routing

C. Dispatching

D. Income Tax Collection ✅

Principles of Management

Introduction

Henri Fayol introduced the 14 Principles of Management, which remain the foundation of modern management practices.

These principles help managers improve organizational efficiency and achieve business objectives effectively.

Fayol’s 14 Principles

1. Division of Work
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual Interest
7. Remuneration
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Tenure
13. Initiative
14. Esprit de Corps

Management MCQs

71. Who proposed the 14 Principles of Management?

A. Henri Fayol ✅

B. Taylor

C. Drucker

D. Weber

72. Unity of Command means

A. One employee should receive orders from one superior only ✅

B. One manager for every department

C. One company

D. One machine

73. Division of Work increases

A. Efficiency ✅

B. Pollution

C. Cost

D. Wastage

74. Scalar Chain refers to

A. Chain of authority ✅

B. Supply Chain

C. Machine Chain

D. Production Line

75. Esprit de Corps means

A. Team spirit ✅

B. Discipline

C. Promotion

D. Salary

Personnel Management

Introduction

Personnel Management deals with acquiring, developing, motivating, and retaining employees. It focuses on ensuring that the organization has competent and satisfied employees.

Functions

• Recruitment
• Selection
• Training
• Placement
• Promotion
• Performance Appraisal
• Wage Administration
• Labour Welfare
• Industrial Relations

Personnel Management MCQs

76. Personnel Management deals primarily with

A. Employees ✅

B. Machines

C. Buildings

D. Inventory

77. Recruitment means

A. Attracting suitable candidates ✅

B. Promotion

C. Retirement

D. Transfer

78. Selection follows

A. Recruitment ✅

B. Retirement

C. Promotion

D. Appraisal

79. Training improves

A. Employee skills ✅

B. Pollution

C. Marketing

D. Product price

80. Performance Appraisal evaluates

A. Employee performance ✅

B. Product quality

C. Market demand

D. Sales volume

Quick Revision Table

Production Engineering & Industrial Management MCQs with Answers (Part 3)

Fixing Selling Price, Break-even Analysis, Make or Buy Decision, Depreciation Methods, Economic Order Quantity (EOQ) & Inventory Control

Engineering Economics in Production Management

Engineering Economics is a branch of engineering that applies economic principles to technical decision-making. It helps organizations evaluate costs, estimate profits, optimize investments, and improve financial performance. Engineers and production managers use these concepts to make decisions about pricing, production volume, inventory, and asset replacement.

Understanding engineering economics is essential for minimizing costs while maximizing profitability. Competitive examinations frequently include questions on selling price, break-even analysis, depreciation, and inventory management because these topics are widely used in manufacturing industries.

Fixing Selling Price

Introduction

Selling price is the amount charged to customers for a product or service. It should be sufficient to recover all costs and provide a reasonable profit to the manufacturer.

The selling price depends on several factors, including production cost, market demand, competition, taxes, distribution expenses, and desired profit margin.

Formula

Selling Price = Total Cost + Desired Profit

Where:

• Total Cost = Direct Material Cost + Direct Labour Cost + Overhead Cost

Factors Affecting Selling Price

• Cost of raw materials
• Labour cost
• Manufacturing overheads
• Transportation expenses
• Market demand
• Competition
• Government taxes
• Desired profit

Objectives of Pricing

• Recover production costs
• Earn reasonable profit
• Remain competitive
• Increase market share
• Ensure customer satisfaction

Selling Price MCQs

81. Selling price is equal to

A. Cost − Profit

B. Cost + Profit ✅

C. Profit − Cost

D. Cost ÷ Profit

Answer: B

82. Which of the following is included in total cost?

A. Material Cost

B. Labour Cost

C. Overhead Cost

D. All of the above ✅

83. The primary objective of pricing is to

A. Increase losses

B. Recover costs and earn profit ✅

C. Reduce product quality

D. Increase waste

84. Which factor directly affects selling price?

A. Market demand ✅

B. Employee attendance

C. Factory paint

D. Office furniture

85. A higher profit margin generally leads to

A. Higher selling price ✅

B. Lower selling price

C. No change

D. Zero cost

86. Which cost is NOT a direct manufacturing cost?

A. Material Cost

B. Labour Cost

C. Factory Overhead

D. Income Tax ✅

87. Market competition generally

A. Influences pricing decisions ✅

B. Increases depreciation

C. Reduces machine life

D. Changes factory layout

88. Desired profit is added to

A. Total Cost ✅

B. Raw Material Cost

C. Labour Cost only

D. Selling Expenses only

89. Selling price should always

A. Cover total cost ✅

B. Be less than cost

C. Ignore profit

D. Ignore expenses

90. Price fixing is mainly a

A. Financial decision ✅

B. Maintenance activity

C. Safety measure

D. Inspection process

Break-even Analysis

Introduction

Break-even Analysis determines the level of sales at which a business neither earns a profit nor incurs a loss. At this point, total revenue equals total cost.

It is one of the most important decision-making tools used by production managers and financial analysts.

Important Terms

Fixed Cost

Costs that remain constant regardless of production volume.

Examples:

• Factory rent
• Insurance
• Salaries
• Depreciation

Variable Cost

Costs that vary directly with production.

Examples:

• Raw materials
• Direct labour
• Packaging

Contribution

Contribution = Selling Price − Variable Cost

Break-even Point Formula

Break-even Quantity = Fixed Cost / Contribution per Unit

Advantages

• Determines minimum sales required
• Helps profit planning
• Assists pricing decisions
• Supports investment decisions

Break-even Analysis MCQs

91. Break-even point occurs when

A. Profit is maximum

B. Total Revenue = Total Cost ✅

C. Total Cost is zero

D. Sales are zero

92. At break-even point

A. Profit = Zero ✅

B. Loss is maximum

C. Revenue is zero

D. Fixed cost is zero

93. Fixed cost remains

A. Constant ✅

B. Variable

C. Increasing

D. Decreasing

94. Which of the following is a fixed cost?

A. Raw material

B. Direct labour

C. Factory rent ✅

D. Packaging

95. Contribution equals

A. Selling Price − Variable Cost ✅

B. Selling Price + Variable Cost

C. Fixed Cost − Variable Cost

D. Profit + Cost

96. Break-even analysis helps in

A. Profit planning ✅

B. Painting machines

C. Product inspection

D. Factory maintenance

97. Which cost changes with production?

A. Variable Cost ✅

B. Fixed Cost

C. Insurance

D. Building rent

98. Break-even point is useful for

A. Decision making ✅

B. Safety inspection

C. Recruitment

D. Machine lubrication

99. Increasing contribution generally

A. Reduces break-even quantity ✅

B. Increases break-even quantity

C. Has no effect

D. Doubles depreciation

100. Which graph is commonly used to represent break-even analysis?

A. Break-even Chart ✅

B. Pie Chart

C. Histogram

D. Scatter Diagram

Make or Buy Decision

Introduction

The Make or Buy Decision helps an organization determine whether a component should be manufactured internally or purchased from an outside supplier.

This decision affects production cost, quality, delivery schedule, and utilization of factory resources.

Factors Affecting Make or Buy Decision

• Manufacturing cost
• Purchase cost
• Machine capacity
• Labour availability
• Product quality
• Supplier reliability
• Delivery schedule
• Confidentiality

Advantages of Making

• Better quality control
• Better confidentiality
• Improved flexibility
• Efficient machine utilization

Advantages of Buying

• Lower investment
• No maintenance cost
• Quick availability
• Suitable for small quantities

Make or Buy Decision MCQs

101. Make or Buy decision mainly depends on

A. Cost comparison ✅

B. Factory colour

C. Employee age

D. Office location

102. Buying is preferred when

A. Purchase cost is lower than manufacturing cost ✅

B. Internal cost is lower

C. Machine utilization is low

D. Labour is free

103. Which factor is NOT considered in Make or Buy analysis?

A. Quality

B. Cost

C. Supplier reliability

D. Weather forecast ✅

104. Manufacturing internally provides

A. Better quality control ✅

B. Less supervision

C. Higher dependence on suppliers

D. Reduced flexibility

105. Buying from suppliers reduces

A. Initial investment ✅

B. Product demand

C. Sales

D. Market share

Depreciation

Introduction

Depreciation is the gradual reduction in the value of a fixed asset due to wear and tear, passage of time, or technological obsolescence.

Manufacturing companies calculate depreciation annually to determine the actual value of machinery and buildings.

Causes of Depreciation

• Wear and tear
• Aging
• Obsolescence
• Corrosion
• Accidental damage

Methods of Depreciation

• Straight Line Method (SLM)
• Written Down Value (WDV)
• Declining Balance Method
• Units of Production Method
• Sum of Years Digits Method

Straight Line Formula

Depreciation = (Cost − Scrap Value) / Useful Life

Depreciation MCQs

106. Depreciation means

A. Increase in asset value

B. Decrease in asset value ✅

C. Increase in profit

D. Increase in sales

107. Which method charges equal depreciation every year?

A. Straight Line Method ✅

B. Declining Balance Method

C. WDV Method

D. Units of Production Method

108. Depreciation is mainly calculated for

A. Fixed Assets ✅

B. Cash

C. Inventory

D. Debtors

109. Which of the following causes depreciation?

A. Wear and tear ✅

B. Advertising

C. Sales promotion

D. Recruitment

110. Scrap value is also known as

A. Salvage Value ✅

B. Book Value

C. Selling Price

D. Variable Cost

Economic Order Quantity (EOQ)

Introduction

EOQ is the order quantity that minimizes the total inventory cost by balancing ordering costs and holding costs.

It is one of the most frequently asked inventory management topics in engineering examinations.

Formula

EOQ = √(2DS/H)

Where:

• D = Annual Demand
• S = Ordering Cost
• H = Holding Cost per unit

Assumptions of EOQ

• Demand is constant.
• Lead time is fixed.
• No shortages occur.
• Ordering cost is constant.
• Holding cost is constant.

EOQ MCQs

111. EOQ stands for

A. Economic Order Quantity ✅

B. Estimated Order Quantity

C. Engineering Order Quantity

D. Efficient Order Quality

112. EOQ minimizes

A. Total inventory cost ✅

B. Labour cost

C. Selling price

D. Marketing cost

113. Inventory carrying cost is also called

A. Holding Cost ✅

B. Labour Cost

C. Selling Cost

D. Maintenance Cost

114. Ordering cost increases when

A. Number of orders increases ✅

B. Inventory increases

C. Demand decreases

D. Profit increases

115. Which assumption is made in EOQ?

A. Constant demand ✅

B. Variable lead time

C. Frequent shortages

D. Random ordering cost

Inventory Control

Introduction

Inventory Control is the process of maintaining optimum stock levels to meet production requirements without excessive investment.

Proper inventory control prevents stockouts, reduces storage costs, and ensures uninterrupted production.

Inventory Control Techniques

• ABC Analysis
• VED Analysis
• EOQ
• JIT (Just-In-Time)
• FSN Analysis
• HML Analysis

Inventory Control MCQs

116. Inventory means

A. Stock of materials ✅

B. Factory building

C. Employees

D. Sales records

117. ABC analysis classifies inventory based on

A. Annual consumption value ✅

B. Colour

C. Weight only

D. Shape

118. JIT stands for

A. Just-In-Time ✅

B. Joint Inventory Technique

C. Job Inspection Test

D. Just Internal Transfer

119. The main objective of inventory control is to

A. Maintain optimum stock levels ✅

B. Increase inventory indefinitely

C. Increase storage costs

D. Reduce production

120. Which technique classifies items based on criticality?

A. VED Analysis ✅

B. EOQ

C. Break-even Analysis

D. Depreciation

Formula Revision Table

Quick Revision Points

• Selling Price = Cost + Profit.
• Break-even Point: Total Revenue = Total Cost.
• Make or Buy decisions depend on cost, quality, and capacity.
• Depreciation accounts for the reduction in asset value over time.
• EOQ minimizes ordering and holding costs.
• Inventory control ensures the right material is available at the right time in the right quantity.

Production Engineering & Industrial Management MCQs – Part 4

Topics: Supply Chain Management, Total Quality Management (TQM), Seven QC Tools, Control Charts, ISO 9000 Series, ISO 14000 Series.

1. Supply Chain Management (SCM)

SCM is the management of the flow of materials, information and finances from suppliers to customers. Objectives include reducing cost, improving customer service and ensuring timely delivery.

SCM MCQs

1. SCM begins with
   A. Supplier
   B. Manufacturer
   C. Warehouse
   D. Customer
   Answer: A (Supplier)
2. Primary goal of SCM
   A. Decoration
   B. Higher taxes
   C. Idle inventory
   D. Efficient flow of goods
   Answer: A (Efficient flow of goods)
3. Bullwhip effect refers to
   A. Machine failure
   B. Fire accident
   C. Depreciation
   D. Demand amplification
   Answer: A (Demand amplification)
4. Lead time means
   A. Machine life
   B. Production cost
   C. Selling price
   D. Time between order and receipt
   Answer: A (Time between order and receipt)
5. Logistics mainly deals with
   A. Recruitment
   B. Maintenance
   C. Advertising
   D. Transportation and storage
   Answer: A (Transportation and storage)

2. Total Quality Management (TQM)

TQM is an organization-wide approach focused on continuous improvement, customer satisfaction and employee involvement.

Principles: Customer focus, Leadership, Employee involvement, Process approach, Continuous improvement, Evidence-based decisions, Relationship management.

3. Seven QC Tools

• Check Sheet
• Histogram
• Pareto Chart
• Cause and Effect Diagram
• Scatter Diagram
• Control Chart
• Flow Chart

4. Control Charts

Control charts monitor process stability using UCL, CL and LCL. Common charts: X̄, R, p, np, c and u charts.

5. ISO 9000 Series

ISO 9001 specifies requirements for a Quality Management System. Benefits include consistent quality, customer satisfaction and continual improvement.

6. ISO 14000 Series

ISO 14001 specifies requirements for an Environmental Management System aimed at pollution prevention and legal compliance.