/25

1 votes, 5 avg

Created on March 19, 2026 By

CA Sonal Saboo

CMA Inter

Inter OMSM PN-9 Quiz 2

This quiz is based on the CMA Operations Management and Strategic Management paper.
Each question is multiple-choice with 4 options, and only 1 option is correct.
Attempt the quiz to test your understanding of CMA OMSM concepts.

1 / 25

Category: Operations Management and Strategic Management PN-9

Which one of the following is a feature of input measure of capacity?

a. It is less applicable when the amount of customization and variety in the product mix increases

b. It is used mainly in case of high volume processes such as car manufacturers

c. Capacity is usually expressed as number of workstations or number of workers

d. It is applicable when the firm provides a relatively small number of standardized services and products

2 / 25

Category: Operations Management and Strategic Management PN-9

Which one of the following is an output measure of Capacity?

a. Total capacity of AKC Motors in India is 300000 machine hours in a year

b. Total Capacity of Z steel plant is 720000labour hours in a year

c. The Aluminum giant XYZ produces 30mt in a day

d. The oil conglomerate ABC has 80000gallon refinery size

3 / 25

Category: Operations Management and Strategic Management PN-9

This capacity is the maximum rate of output achieved under ideal conditions. This is

a. Design capacity

b. Effective capacity

c. Installed capacity

d. Licensed capacity

4 / 25

Category: Operations Management and Strategic Management PN-9

If design capacity is reduced by allowances such as personal time and maintenance, the resultant capacity is

a. Design capacity

b. Effective capacity

c. Installed capacity

d. Licensed capacity

5 / 25

Category: Operations Management and Strategic Management PN-9

Need for periodic maintenance of equipment always makes

a. Licensed capacity > Installed capacity

b. Installed capacity < Effective capacity

c. Design capacity > Effective capacity

d. Licensed capacity = Effective capacity

6 / 25

Category: Operations Management and Strategic Management PN-9

Actual Output cannot exceed effective capacity because of

a. Problems of scheduling & balancing operations

b. Rejection due to quality problems

c. Need for periodic maintenance of equipment

d. Changing product mix

7 / 25

Category: Operations Management and Strategic Management PN-9

Capacity Utilisation is

a. The degree to which a resource such as equipment, space or the workforce is currently being used

b. The degree to which a resource such as equipment, space or the workforce is currently being held as reserve

c. The degree to which a resource such as equipment, space or the workforce is currently being used for achieving installed capacity

d. The degree to which a resource such as equipment, space or the workforce is currently being used for achieving optimisation

8 / 25

Category: Operations Management and Strategic Management PN-9

Which one of the following is not a key question in Capacity planning?

a. What kind of capacity is needed?

b. What kind of facilities are needed?

c. How much capacity is needed to match demand?

d. When the capacity is it needed?

9 / 25

Category: Operations Management and Strategic Management PN-9

This denotes the highest output established by the actual trial runs of the productive machines installed. This is

a. Design capacity

b. Rated capacity

c. Effective capacity

d. Licensed capacity

10 / 25

Category: Operations Management and Strategic Management PN-9

Capacity refers to

a. An upper limit or ceiling on the load that an operating unit can handle

b. A range from a lower limit to an upper limit of load through which an operating unit could operate

c. A limit on the load that an operating unit could handle only with 5% deviation

d. An upper limit of load which an operating unit could break during emergency

11 / 25

Category: Operations Management and Strategic Management PN-9

The goal of capacity planning of an organisation is

a. To achieve a match between its long term supply capabilities and the actual level of long term demand

b. To achieve a level of operation so that supply failure could be maintained at ≤ 1% of long term demand

c. To achieve a level of operation so that periodic mean operation remain within 95% of long term demand

d. To achieve a match between its long term supply capabilities and the predicted level of long term demand

12 / 25

Category: Operations Management and Strategic Management PN-9

Out of Balance Capacity occurs

a. When there is a gap between supply and demand

b. When there is a gap between long term supply and long term demand

c. When there is a gap between current and desired capacity

d. When there is a gap between actual supply and EOQ supply

13 / 25

Category: Operations Management and Strategic Management PN-9

Which one of the following questions are not answered by Capacity planning?

a. What kind of capacity is needed?

b. How much is needed to match demand?

c. When is it needed?

d. For whom it is needed?

14 / 25

Category: Operations Management and Strategic Management PN-9

Efficiency of an operation facility is measured by

a. (Effective Capacity)/(Design Capacity)*100

b. (Actual Output)/(Design Cpacity)*100

c. (Actual output)/(Effective Capacity)*100

d. (Design Capacity)/(Effectiv e Capacity)*100

15 / 25

Category: Operations Management and Strategic Management PN-9

Utilisation of an operation facility is measured by

a. (Effective Capacity)/(Design Capacity)*100

b. (Actual Output)/(Design Cpacity)*100

c. (Actual output)/(Effective Capacity)*100

d. (Design Capacity)/(Effectiv e Capacity)*100

16 / 25

Category: Operations Management and Strategic Management PN-9

Key to improving capacity utilisation is

a. To increase effective capacity

b. To increase design capacity

c. To decrease effective capacity

d. To increase maintenance frequency of the capacity

17 / 25

Category: Operations Management and Strategic Management PN-9

Benefits of high utilisation are realised only when

a. Effective capacity is fully achieved

b. There is high efficiency

c. Breakdown maintenances are minimum

d. There is demand for output

18 / 25

Category: Operations Management and Strategic Management PN-9

Which one of the following is not a factor impacting effective capacity?

a. The design of facilities

b. Product mix

c. Layout of the work space

d. Market share

19 / 25

Category: Operations Management and Strategic Management PN-9

Which one of the following is an operational factor that determines effective capacity?

a. Product standards

b. Quality capabilities

c. Learning rates

d. Quality assurance

20 / 25

Category: Operations Management and Strategic Management PN-9

Which one of the following does not reduce effective capacity?

a. Paperwork required by Government regulatory agencies

b. Pollution standard on products

c. Efficient distributors

d. Higher labour turnover

21 / 25

Category: Operations Management and Strategic Management PN-9

Leading capacity strategy

a. Builds capacity in anticipation of increasing future demand

b. Faces increasing demand with the undeutilised current capacity

c. Builds capacity in anticipation of increasing product varieties

d. Faces increasing consumption with unsold stock

22 / 25

Category: Operations Management and Strategic Management PN-9

Which one of the following is correct?

a. Capacity decision does not affect product lead times

b. Capacity decisions must link backward & forward channels in the whole operation chain

c. Expansionist strategy does not help a firm to reduce its costs and compete on price

d. Wait & see strategy improves market share over the long run

23 / 25

Category: Operations Management and Strategic Management PN-9

It is extra capacity used to offset demand uncertainty. This is

a. Capacity Cushion = Actual output - Demand

b. Capacity Cushion = Capacity – Expected demand

c. Capacity Tolerance = Effective capacity - Actual output

d. Capacity Cushion = Capacity – Effective Capacity

24 / 25

Category: Operations Management and Strategic Management PN-9

Which one of the following is not a factor in planning service capacity

a. Period of production

b. Need to be near customers

c. Inability to store services

d. Degree of volatility of demand

25 / 25

Category: Operations Management and Strategic Management PN-9

Which one of the following is not a factor in determining Economic Lot Size for manufacturing?

a. Production Schedule

b. Usage rate

c. Manufacturing Cost

d. Cost of Deterioration

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Inter PN-9 OMSM Quiz 2

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