This set of Industrial Engineering Multiple Choice Questions & Answers (MCQs) focuses on “Management Science and Managerial Economics”.
1. Taylor’s systematic development of management techniques that he practised at the Midvale Steel Company in Philadelphia was around the year___________
a) 1880
b) 1891
c) 1981
d) 1890
View Answer
Explanation: Frederick Winslow Taylor (F.W. Taylor) who is considered as the father of scientific management is the first person to adopt scientific principles to the management. Taylor is a Mechanical Engineering. He is known for his systematic development of management techniques which he started around 1880 at the Midvale steel company.
2. Who advocated fourteen principles of management?
a) Henry Fayol
b) F.W. Taylor
c) Gantt
d) Gilbreth
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Explanation: Henry Fayol, a French industrialist, is hailed as the father of modern management because of his contributions to the management. He stated fourteen principles of management which reflect how the organisations should be structured.
3. Taylor developed four principles of management namely research, standardization, control and co – operation.
a) True
b) False
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Explanation: Taylor developed the four principles of management namely research, standardization, control and co – operation which further developed into a system that consists of inventory control, production planning and control, time study, a mnemonic system of classification, and means for maintaining quality production.
4. Which of the following is not a contribution of Gantt?
a) Recognition of worker psychology
b) Gantt chart
c) Development of a bonus plan
d) Operational process chart
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Explanation: Operational process chart is developed by Gilbreth. An operational process chart is a recording technique used in the method study. Recognition of worker psychology, Gantt chart for production scheduling and development of bonus plan was the contribution of Gantt.
5. Management science takes a systematic approach to problem – solving by the use of a modelling process approach taking the help of mathematical models.
a) True
b) False
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Explanation: Management science is defined as a problem – solving technique. It develops a mathematical model to define simple – to – complex functional relationships. It is also used as a tool for decision making.
6. Management is classified into ___________ levels of Management.
a) Two
b) Three
c) Five
d) Nine
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Explanation: Basically, management is classified into three levels of management namely top, middle and lower – level management. Top managements include Boards of directors, Managing directors, chief executives, General Managers, Owners, Share – holders, financiers etc. Middle – level management includes production manager, marketing manager, sales manager etc. Lower level management includes foremen, supervisors, Office superintendent, inspectors etc.
7. If Q1 and Q2 are quantities before and after a price change, P1 and P2 are the corresponding prices, then the price elasticity of demand is given by____________
a) ((Q2 – Q1) / (Q1 + Q2)) / ((P2 – P1) / (P2 + P1))
b) ((Q2 + Q1) / (Q1 + Q2)) / ((P2 – P1) / (P2 + P1))
c) ((Q2 + Q1) / (Q1 + Q2)) / ((P2 + P1) / (P2 – P1))
d) ((Q2 + Q1) / (Q1 – Q2)) / ((P2 + P1) / (P2 – P1))
View Answer
Explanation: Price elasticity of demand describes the percentage change in price (P) on the percentage change in quantities (Q) I.e., indicates the responsiveness of a change in quantity to change in price. It is given by
E = ((Q2 – Q1) / (Q1 + Q2)) / ((P2 – P1) / (P2 + P1))
8. A set of goods carrier that consists of 100 carrier boxes costs Rs.1040. After price change, it costs Rs. 1249. The quantity of goods carrier purchased before price change and after price change are 100 and 125. Find price elasticity of demand.
a) 12.1
b) 0.21
c) 1.21
d) 1.02
View Answer
Explanation: Given,
Q1 = 100
Q2 = 125
P1 = Rs. 1040
P2 = Rs. 1249
Then price elasticity of demand is given as
E = ((Q2 – Q1) / (Q1 + Q2)) / ((P2 – P1) / (P2 + P1)) = ((125 – 100) / (125 + 100)) / ((1249 – 1040) / ((1249 + 1040)) = (25 / 225) / (209 / 2289) = 0.111 / 0.091 = 1.219
9. Which of the following is not an industrial activity as classified by Henry Fayol?
a) Technical
b) Commercial
c) Financial
d) Purchasing
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Explanation: Henry Fayol contemporary of F.W. Taylor divided all industrial activities into six groups namely technical, commercial, financial, security, accounting and statistics and management.
10. Trade is an important part of commerce that refers to the sales, transfer or exchange of goods.
a) True
b) False
View Answer
Explanation: Trade is the process of sales, transfer or exchange of goods. Trades are broadly classified into:
(i) Internal trade
(a) Wholesale trade (b) Retail trade
(ii) Foreign or International Trade
(a) Import Trade (b) Export trade
Sanfoundry Global Education & Learning Series – Industrial Engineering.
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