1. Lumpy Demand means that demand varies significantly from week to week.

2. Annual Holding cost: (Avg Inventory level) * (Holding cost per unit year)
3. Both EOQ & Production Order Quantity model assume known, constant demand.
 The Basic EOQ model assumes negligible or zero lead time (i.e time b/w placing and receiving an order is not
significant)
 The Basic EOQ model assumes that when an order is placed, the entire order quantity is delivered
instantaneously.
 The Production Order Quantity Model (also called Production Lot Size model) assumes that the items are
produced and added to inventory gradually over time, not received all at once.
4. Du-point Analysis is a financial diagnostic tool to calculate the company’s return on investment based on sales margin
and capital turnover ratio.
5. Inventory that is created when an order for an item is issued but not yet received Pipeline Inventory.
6. Anticipation Inventory is stock accumulated in advance of expected demand (e.g before festivals, promotion etc.)
7. Material management is an integrated functioning of purchasing and allied activities to achieve maximum co-
ordination and optimum expenditure in the area of materials.
 The goal is to ensure that right materials are available at the right time, at the right cost with maximum
coordination and optimum expenditure.
 It covers inventory control, procurement, warehousing, internal distribution.
8. Supply Chain Management is a broader concept that includes not just MM but also logistics, distribution, customer
service and coordination with external partners.
 It goes beyond internal material handling and focuses on the entire flow from supplier to end customer.
9. Production Management deals with planning, organizing and controlling manufacturing processes.
 It focuses on transformation of raw material into finished products not on the broader scope of material handling
and purchasing.
10. Set-up cost is the cost to prepare a machine or process for manufacturing an order.
 It includes cleaning, calibrating, changing tools or dies and machine adjustments required before starting a new
order or batch.
 This cost is independent of the number of units produced in the batch.
11. Carrying cost (Holding Cost) refers to the expenses of storing inventory over time.
 It includes storage, insurance, depreciation and opportunity costs not machine preparation.
12. Shrinkage cost arises from losses of inventory due to theft, damage, misplacement or spoilage.
13. Perpetual inventory tracks both receipts (additions) and subtractions (issues) of material continuously. This system
ensures that inventory records are always up-to-date.
14. Made-to-Stock system is used where standard product are manufactured and stocked and customers are serviced from
an end-product inventory.
 Ismein standard product pehle se hi manufacture kar liye jaate hain or stock me rakh liye jaate hain. Jab customer
order karta hai, toh use directly available inventory se product deliver kiya jaata hain.
15. Make to Order : ismein product tabhi banaya jaata hai jab customer se order aata hai.
16. Engineer to Order yeh system tab use hota hai jab product special design our engineering ke according banaya jaata
hain customer kae specific requirement kae hisab se poora design aur production order kae baad start hota hain.
17. Bill of material organized by major subassemblies or by-product options are known as Modular Bills. Yeh system tab
use hota hai jab product kae multiple version ya option available hote hain.
18. Phantom Bills: Inka use temporary subassemblies kae liye hota hai jo product ke part hote hain lekin individually stock
nahi kiye jaate. Inhe production mein immediately consure kar liya jaata hain.
19. In MRP systems, tracing upward the bill of material from the components to the parent item is known as pegging.
Yaani agar koi raw material ya part ki requirement aayi hai, toh pegging batata hai ki yeh requirement kis final product
ya assembly ke liye hai.
20. Bottleneck products are hard to source and can only be obtained from one supplier; therefore, vulnerable about their
supplies.
21. Buying center related to all those individuals and group who participate in the purchasing decision-making process,
who share some common goals and the risks arising from the decisions.
22. Offshoring relates to the commission of work which was previously done in-house to a provider in a low-cost country.
23. When the responsibility for the execution of the entire outsourced function lies with the external provider, including
coordinating activities, it is known as Turnkey outsourcing.
24. Inbound logistics: Raw material coming from the supplier to the facility.
25. Outbound logistics: Finished product going out from the facility to the customer.
26. Bill of sight is custom import form used when the importer cannot make a custom entry owing to insufficient
information from the shipper.
Yeh jab use hota hai tab importer ke pass shipment ka pura detail nahi hota, aur wo complete custom temporary entry
le sakta hai taaki goods ko inspect karke baad mein final documentation complete kar sake.
27. Cross-Docking is a logistic practice where goods are received at one facility and then directly dispatched to their next
destination without being stored. This helps in reducing inventory holding costs and improving the efficiency of the
supply chain by minimizing storage time.
28. Bill of Lading is a legal document that provides about the shipment. It includes information such as what goods are
being transported, origin and destination of the shipment and terms and condition of the transportation. It serves as
both receipts for the goods and a contract between shipper and carrier.
29. Facility Location refers to the process of determing the optimal geographical sites of a company’s logistical operations
such as warehouses, distribution centers or production facilities. The goal is to choose location that minimize costs,
improve efficiency and enhance service delivery.
30. Inward Transport: Referes to the movement of material from suppliers to the organization’s receiving area. It is
essentially the incoming transportation that brings goods into the company:
Off-site Transport: This is transportation that occur outside the organisations, typically to or from a third-party location,
but not necessarily from suppliers.
On-site Transport: Refers to the movement of materials or good within the organization such as b/w different
department or section of the company.
Out-ward Transport: Refers to the movement of goods from the company to external locations, like sending finished
products to cutomers or distribution centers.
31. Tariff is the cost charges by a third-party transporter (like a logistics or shipping company) for moving one unit of
material b/w locations. It’s a standard term used in transport pricing.
32. Piggy back is a transportation method where road vehicles (like trucks or trailers)are placed on rail flatcars and moved
by train. It combines road and rail transport making it cost effective and efficient over long distances.
33. A steel or wooden platform of 800*1200mm and 1000*1200mm designed to accommodate and facilitate cargo
transshipment through cargo movement is known as Pallet.
34. Opaque packaging is used to protect contents from exposure to light.
35. Cardle-to-Cradle thinking is a sustainability approach that designs product and packaging in a way that they can be
completely reused, recycled or safely returned to nature after use. It connects the beginning (raw materials) to the end
(reuse or recycling) instead of ending in waste-like a continuous loop.
36. The Certification BS EN 13432 means the packaging is for a product that is “Home compostable”
37. Supply Chain management integration refers to coordinating activities across different departments within
organizations.
38. A Matrix purchasing organization structure is a hybrid model. It combines the strengths of both centralized (Control,
standardization) and decentralized (flexibility, responsiveness) purchasing.
39. Dual Sourcing Strategy reduce supply chain complexity and risks. It involves using two suppliers for the same product
or component instead of relying on just one. It balances security and flexibility.
40. Conducting supplier audits to asses CSR focuses on Evaluating Supplier adherence to ethical practices like (about
conditions, Environmental practices, Human rights, Fair wages and working hours, safe working environment)
41. Negotaiation leverage refers to the purchasing organization’s power or advantage in a negotiation.
In some cases their pressure can lead suppliers to accept terms they might not prefer enhancing the buyer’s position.
42. ISO 14001: Environment Management System
ISO 9001 : Quality Management System
ISO 45001 : Occupational Health & Safety Management System
ISO 2700 : Information Security Management System.
43. Just-in-Time system uses real-time data (like sales, inventory levels or production needs) to trigger immediate
replenishment. Its goal is to Minimize inventory holding, reduce waste, ensure materials arrive only when needed.
44. Periodic review system: Inventory is reviewed at fixed intervals (e.g weekly not in real time)
45. A Material Requirement Planning (MRP) system is designed to ensure that materials and components are available
when needed for production. It considers both Independent and Dependent demand.
46. A comprehensive inventory security policy aims to prevent theft, loss and errors in inventory management. One of the
most critical elements is conducting regular inventory counts and reconciliations.
47. In Material Requirements Planning (MRP):
Gross Requirements = Total demand for a component or material in a period.
Scheduled Receipts = Orders that have already been placed and are expected to arrive.
Net Requirements = Gross Requirements – (Scheduled Receipts + Inventory on hand)
48. In Just-in-Time (JIT) inventory management, the "pull" system means:
You produce or order items based on actual order demand — not forecasts.
49. In multi-item inventory management, a Stock-Keeping Unit (SKU) is a unique code or number given to each individual
item to help track and manage it in the system. It helps in identifying : What the item is, size, color or model.
50. The term “Freight forwarding” in transportation logistics refers to The coordination and management of the
transportation of goods. For eg. If a company in India wants to send machines to Germany, they might hire a freight
forwarder to handle all the transport planning-booking a ship, preparing documents, and tracking the cargo.
51. Key activity in logistics network design : Route planning and optimization.
Logistics network design means planning how goods will move from the manufacturer to the customer in the most
efficient and cost-effective way.
Route planning and optimization means deciding the best paths and shortest or fastest routes for trucks, ships or
planes to take when delivering goods.
A2: Order fulfillment and tracking: this is part of logistics operations not network design.
52. Role of logistics service level agreements (SLAs) in outsourcing management: Setting performance expectation and
metrics. SLAs in logistics is a written agreement between a company and a logistics service provider (like a courier or
transport company).
Its main purpose is to clearly set expectations about:
 What services will be delivered.
 How well they should be delivered.
 How performance will be measured (like delivery time, accuracy damage rate, etc.)
53. Key consideration in selecting packaging materials for logistics is Minimizing transportation costs, Protecting the
product, keeping it lightweight and compact, making it easy to stack, store and transport.
If the packaging is too bulky or heavy, it increases the transportation cost. So, choosing the right material helps in
reducing the weight and size, which saves money on shipping.
A1: Maximizing product shelf life : Important for food or medicine, but that’s more about storage not logistics cost.
54. Packaging optimization means designing packaging in a smart way so that it uses less space, lightweight but strong, fits
well in trucks, container or pallets.
This helps in maximizing transportation efficiency by : carrying more goods in one trip, saving fuel and cost,
preventing damage during transport.
 A1: Minimizing storage requirements: it’s a benefit, but the main focus of packaging optimization is on transportation.
55. Ergonomics in order picking and packing is enhancing worker safety and efficiency by reducing bending, stretching, and
lifting that can hurt the body, making tools and workstations easier to use, helping workers move faster and more
safely.
56. Proper package labeling contribute to efficient order picking and packing to Ensure accurate order fulfillment. Proper
package labeling means putting the right tags, barcodes, items names, or numbers on packages.
A1: Reducing packaging waste: Labeling doesn’t affect waste.
A2: Maximizing product shelf life: That’s related to materials and storage, not labels.
A3: Enhancing product aesthetics : That’s for marketing not logistics.
57. Term used to describe the process of collecting materials into standard packages for efficient handling: Unitization.
Unitization is the process of grouping or collecting smaller items into a single unit (like box, crate or pallet) to make
handling, storage, and transportation easier and faster.
A1: Palletization: It is a type of unitization (using pallets) but unitization is the broader term.
A2: Standardization : Means making things uniform, not grouping them for handling.
A3: Packaging consolidation: Similar, but more about reducing the number of packages, not forming a single handling
unit.
58. Deciding the size and location of warehouses is a strategic decision because it affects the entire supply chain, involves
long-term planning, impacts transportation cost, delivery time and customer service.
59. Packaging manufacturers contribute to sustainability by creating packaging that protects goods better, prevents waste
from spoilage, breakage or damage in storage and distribution, reduces the need for repacking or reshipping.
60. How can the “supply chain walk” concept be applied to stakeholder identification : using the concepts as a mental
framework for identifying stakeholders.
It is a conceptual(mental) approach where you imagine or map out each step of the supply chain – from raw material
to final customer to : understand the full flow of goods and services, Identifying all the people or groups (stakeholders)
involved at each stage., spot where decisions, risks, or value additions happen.
61. Robot is a flexible machine with the ability to hold, move or grab materials, perform repetitive tasks with precision.
Automated Guided Vehicles (AGVs) : These move materials but don’t grab or manipulate them.
Hoists : Lift items vertically but have limited movement and flexibility.
Cranes: Lift heavy items, but they are not flexible like robots and can’t grab in a precise way.
62. Layout in which material moved in one direction along the assembly line always in the same pattern is called : Product
Layout.
63. Level Strategy is a production strategy where final product is produced at a constant rate and using inventory as
needed to meet demand, this helps in keeping production stable, avoiding frequent changes in workforce or
equipment usage.
64. Little’s Law is a very useful and practical formula in queuing systems (like in banks, hospitals, warehouses etc) and it
applies when the system is in a steady state.
65. To design a short-term plan how jobs to be arrived at each work-station is called: Shop Floor control.
66. Planned orders show what orders are expected to be made or bought in the future but have not yet been finalized or
released.
67. Schedules Order: These are orders that have been formally planned with a specific release and delivery date. They are
confirmed and set in the production or purchasing schedule
68. Lot-for-lot sizing is a lot-sizing technique that generates exactly what is required to meet the production or material
requirements plan, without carrying extra inventory. It results in ordering or producing just enough material for each
period.
69. Economic lot-sizing aims to minimize the total cost of ordering and holding inventory
70. Periodic lot-sizing orders enough to cover requirements for a fixed number of periods.
71. Plant-wide allocation uses a single predetermined overhead rate for the entire plant to allocate overhead costs to
products or jobs. This rate is usually based on a common allocation base such as machine hours or labor hours.
72. The Bullwhip effect refers to the phenomenon where small fluctuations in customer demand cause progressively
larger fluctuations in demand at the wholesaler, distributor, manufacturer, and supplier levels in the supply chain. It
results in distorted demand information, leading to inefficiencies like overstocking or stockouts.
73. An Airway Bill (AWB) is a document issued by an air carrier or international courier that accompanies goods shipped
by air. It serves as a receipt of goods, a contract of carriage, and allows for tracking of the shipment. It does not serve
as a document of title, unlike a bill of lading.
74. Bill of lading – a shipping document used mainly for sea or land freight, and it can serve as a document of title.
75. A well-closed container is designed to protect the contents from contamination (e.g., dust, dirt) and prevent loss of
contents under normal handling and storage conditions. It ensures the integrity and safety of the product during use
and storage.
76. A blister package consists of a base layer with cavities or pockets (usually made from plastic) that hold individual
pharmaceutical units, and a lid (typically aluminum foil) that seals the product inside. It is commonly used for tablets
and capsules, providing protection, tamper evidence, and ease of use.
77. Strip Package – has two layers (usually of foil) enclosing the product, without
78. Which of the following best defines a Promissory Note as per The Negotiable Instruments Act, 1881? An unconditional
promise in writing made by one person to another to pay a certain sum of money. As per Section 4 of The Negotiable
Instruments Act, 1881, a Promissory Note is defined as:
“An instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking, signed
by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the
instrument.”
79. The main standard-setting bodies that influence the establishment of Generally Accepted Accounting Principles
(GAAP) include:
 FASB (Financial Accounting Standards Board) – the primary body responsible for setting accounting standards
in the U.S.
 SEC (Securities and Exchange Commission) – a regulatory body that enforces financial reporting requirements
and supports standard-setting.
 IASB (International Accounting Standards Board) – sets IFRS, which can influence GAAP globally and in cases
of convergence.
However, the American Investment Council (AIC) is not a recognized standard-setting body for accounting. It is an
advocacy group representing private equity firms and does not create or influence GAAP standards.
80. The Terms of Reference (ToR) document provides a detailed explanation of the scope, timeline, and terms of the
work to be performed in a tender or project. It clearly defines what is expected from the contractor or service
provider.
81. Net 30, Net 60, Net 90 specify the number of days within which payment is due after the invoice date.
82. Stopwatch Time Study involves timing work elements with a stopwatch and analyzing the data to develop time
standards.
 It does not generate instant predetermined time standards; instead, the data must be collected, analyzed,
and sometimes adjusted before setting standards.
The other options are true advantages:
1: Allows detailed analysis of work elements.
3: Requires minimal training to apply.
4: Provides an objective method to measure time.
83. Backflushing is a method where materials are issued or recorded based on a predetermined fixed quantity according
to production output, rather than actual consumption recorded in real-time. It simplifies inventory recording by
assuming standard material usage without detailed tracking during production.
 Fixed period reorder method – ordering inventory at fixed time intervals.
 Perpetual issue method – recording material issues continuously as they happen.
84. Characteristics of Random Access Stores System
  It is a kind of closed stores system in which no material has a fixed location.
This is true for Random Access Stores System, where materials are stored without fixed locations and can be
placed anywhere available.
 It has an open paperwork system which places less emphasis on accounting control.
This is not true. Random Access Stores System usually involves closed or strict control systems to track
materials accurately because no fixed location means you need strong tracking
 It is feasible for large scale operations.
This is true as Random Access Stores System is suitable for large-scale operations where flexible storage and
rapid retrieval are important.
85. In an inflationary environment, which method of pricing material issues is likely to result in higher costs of goods sold
and lower ending inventory: LIFO (Last In, First Out)
 In an inflationary environment (rising prices), LIFO assumes that the most recent (higher cost) inventory is
sold first.
 This results in higher cost of goods sold (COGS) because the latest, more expensive inventory is recognized as
expense.
Consequently, the ending inventory consists of older, lower-cost items, so ending inventory value is lower.
86. FIFO (First In, First Out) results in lower COGS (older, cheaper inventory sold first) and higher ending inventory.
87. The Principle of Non-Compensation in GAAP states that both positive and negative aspects of financial information
should be fully disclosed without offsetting them against each other.
 This means gains and losses, assets and liabilities, should be reported separately to provide full transparency.
88. Under the Limited Liability Partnership Act, 2008, Designated Partners are responsible for ensuring the LLP complies
with all legal and procedural requirements, such as filing returns, maintaining records, and adhering to regulatory
norms. They have the duty to manage and oversee compliance rather than ensuring profits or contributing capital
specifically.
89. Which accounting principle highlights the need to value inventory at the lower of cost or net realizable value (LCNRV)
in the context of inventory management and accounting standards, and why is this principle important for businesses?
Ans 1. The Prudence Principle; it encourages the conservative valuation of inventory, preventing overstatement of
assets and profits.
90. Depreciation is an accounting method to allocate the cost of a tangible asset over its useful life.
 It is a non-cash expense because it does not involve actual cash outflow but reduces the book value of the
asset gradually.
91. Acceptance sampling is a quality control method where a random sample from a shipment or production lot is
inspected to determine whether the entire lot should be accepted or rejected.
This method is cost-effective and time-saving, especially for large shipments, as it avoids checking every single item.
92.