INVENTORY & PURCHASE MANAGEMENT

SR.N
O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A
The system which have four distinct function input, coversion process, output and Materials Production Quality Marketing
Purchase System
A1 control is known as System System System System 3

Supply Supplier None of the

Objective of materials management not consider Low Price Low Cost
continuity Relationship above
A2 5
Expenses Non value None of the
Materials management is called as Cost Center Profit Center
A3 Center Center above 3
Return on Return on Return on Return on None of the
ROI means
Inventory Investment Intelligence Interest above
A4 2
Marketing Quality Materials Purchase None of the
Control of overall costs of materials is responsibility of 3
Department Department Department Department above
A5
Semi Work in
Finished All of the
Materials management includes Raw Materials Finished Process
Materials above
A6 Materials Product 5
Materials Physical Materials All of the
Which is a phase of materials management Planning
A7 Utilization Storing Controls above 5
Vendor
Materials Vendor Inventory
Functions of materials management does not include Developmen Sale of goods
Procurement Rating Control
A8 t 4
Materials Materials Materials All of the
The efficiency of any organization depends on Materail Quality
A9 Price Quantity Quantity above 5
A10 Logistic management is the part of materials management Yes No 3 4 5 1
Human
Planning, acqusition and utilization of materials in the process of production and Marketing Materials Finance All of the
Resource
has resulted in the discipline is known as Management Management Management above
Management
A11 2
Inspection All of the
Maintenance of goods record includes Quotations Invoice Bill Payment
A12 Report above 5
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O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A
It refer to the way materials flow through different organizations starting with
Production Supply Chain Mass Materials Lean
basic raw materials and ending with finished products delivered to the ultimate
Mangement Management Production Management Manufacturing
customer is known as
A13 2
Supplier's
Purchase Quality of None of the
Quality of finish product depends on Cost of Materials Payment
Department material use above
A14 Terms 4
All activities involved in bringing materials into and through the plant are Finance Marketing Materials None of the
Quality Manager
A15 combined under one head is known as Manager Manager Manager above 4
Calculating
In inventory cost model, which of the following cost is not included to place an Administration Cost of All of the
quantity to Phone calls
order? cost Marketing above
B1 order 2
Materials Materials Materials Materials All of the
Integrated materials management plays role in
Planning Budgeting Controls Coordination above
B2 5
Inventory of Requirement Inventory Variance All of the
In the process of materials budgets does not includes
materials of materials target report above
B3 4

If economic order quantity for one year is 30000 packages and demand in units for None of the
100 10 12 11
one year are 3000 units, how much deliveries are require in a year above
B4 2
The buying activities are became specialized and a professionalized staff function, Reactive Distructing Proactive Managable Stimulative
B5 the purchasing department function is viewed as Function Functions Function Functions Functions 3
It is the scientific way of determining the requirements of raw materials, Economic
Materials Inventory Quality None of the
components, spare and other items that go into meeting the production needds Order
Planning Control Mangement above
B6 within economic investment policies is known as Quantity 1
Bill of Bill of Bill of
It refer retrieval techniques traces the direct or indirect uses of a part on higher Bill of Materials None of the
Materials Materials Materials
level assemblies is called as Fusion above
B7 Implosion Organized Explosion 2
This method is use when materials are carried out when the production Allocation Delegation Retrival Discriptancy Perpetual
B8 programme are originated Method Method Method Method Method 1
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O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A
It refer to the retrieval process which divided a products or assembly into its Bill of Bill of Bill of
Bill of Materials None of the
immediate components or low level components through their sub assemblies is Materials Materials Materials
Fusion above
B9 called as Implosion Organized Explosion 4
Business Demand for All of the
Factors influencing materials planning consider Import Policy Credit Policy
B10 Cycle items above 5
The factors which affect materials planning are price trends, business cycle, Irrelavant Micro Dependent Independent
Macro Factors
B11 import policy of government, credit policy is called as Factors Factors Factors Factors 1
Component Component Finish All of the
Materials are classified into the group into classes Work in Process
B12 Parts Parts Product above 5
The factors affecting on materials planning including seasonality, firm objectives, Dependent Macro Crucial Independent
Micro Factors
B13 delegation of authority and communication is known as Factors Factors Factors Factors 5
A document which shows for a particular product or item, list of materials storage Materials Production Bill of Materials
Materials Details
B14 code and consumption pattern is known as Discription Scheule Materials Planning 4
Materials Purchase Estimate Materials All of the
Materials budget includes the
Estimates Timing Purchase Qty Price above
B15 5

It is generally responsible for working with suppliers to make sure the required Distribution Vendor Purchase Quality
Purchasing
inward flow of materials and services Management Management Management Manager
C1 5

It is normally responsible for the outward flow of finish products from Vendor Materials None of the
Distribution Purchasing
organization to the customers Management Management above
C2 1

The coordination is achieved by placing all functional areas involved with moving Inventory Purchase Materials Quality None of the
materials into and through the plant under one organization head is called as Manager Manager Manager Manager above
C3 2
Organization
Organization Organization Organization
Materials management department is structure on the basis of functions such as based on None of the
based on based on a based on
store, transport, inventory control, purchase is called as Matrials above
Commodities Function Location
C4 Planning 2

It is responsible for determining production quantities and scheduling the Distribution Purchase Vendor Purchase Distribution
resources directly responsible for the production of items or services or goods Control Control Control Control Control
C5 4
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O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A
Organization has several plants or locations or division at different geographical Decentralize vendor
Centralized Both A and B Both A and C
areas the organising for materials management will be___________ d Management
C6 4
It can be defined as organizational aproach which brings under the one
organizational components the responsibility for determining the production Purchase Vendor Quality Materials None of the
requirements, scheduling the production process, prcuring, stroring and Management Management Management Management above
C7 disbursing materials at cost economy 4

Systematic flow of goods, services and information from buying process to material Finish goods manufacturin None of the
supply chain
delivery process of product to customers is known as chain chain g flow chain above
C8 1
Organization are divided the responsibility for materials management in three
Intergrated Material Organization Differential Segment
different departments like production and planning, purchasing and distribution
Structure Structure Structure Structure Structure
C9 this traditional structure is known as 5

Purchase management is also known as Business Materials

Resource Crisis Value Added Development None of the
D1 Management Management Department Management above 1
ordering carrying purchasing
Total costs of goods taken from suppliers is called as
D2 stock-out costs costs costs costs all of the above 4

Reduced Reduced Reduced

JIT aim to ______________________
materials suppliers and flow of Reduced None of the
D3 planning vendors information inventories above 4
D4 Which one of the following are included in the 5 R in purchasing? Quality Quantity Price All of these 5 4

This department is responsible for purchasing of materials in right quantity, right

Materials Vendor
price, right time and right source
Distribution Purchasing Management Quality
D5 Department Department Department Department all of the above 2
Cost of
The lead Purchase order lead time is multiplied to number of units are sold per
carrying relevant total None of the
unit of time to calculate
D6 Reorder Level inventory costs stock level above 1
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O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A

Buying
quality which
suits the
Right quality means _________________ under needs
over specifying specifying without
the quality the quality buying incurring
standards for for standard extra cost to Non of the
D7 purchasers purchasing items the company above 4
Relevant
Number of purchase orders for each year is multiplied to relevant ordering cost Irrelevant annual Annual
for each purchase order to calculate Annual relevant annual cost carrying irrelevant All of the
D8 Ordering Costs of ordering costs carrying costs above 1

The purchase order form is designed by Production Materials Purchase Marketing

D9 Department Department Department Department None of them 3
Placement of Physical
Which of the following is a function of purchasing management? Selecting the purchase controls of All of the
D10 source order material above 5 4
Proper Seasonal
Material price can be keep economical or low by
D11 Rush Buying Crisis Buying Planning Bulk Buying Buying 3
Semi
Materials which are not undergone for conversion process in the organization and
Finished Suplimentory Specific
serve as input for production process is known as
D12 Finish Product Items Materials Materials Raw Materials 5

Materials
Purchase Budget has affect on _______________________
Budget of Profitability
D13 Bill of materials the company of firm All of these 5 4
To protect To protect
To effective against against
The aim of forward purchasing is
utilization of interruption increase in All of a,b and None of a,b
D14 storage space in supply price C and C 2
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O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A
materials
Finished goods are manufactured on basis of forecasted demand, is known as requirement in-time on-time pull strategy None of the
D15 planning production production of production above 1
Return on total Fund flow All of the
The finacial parameters in vendor rating includes
E1 asset Current Ratio Quick Ratio analysis above 5
In purchasing, ______________ refer to the reliability of an item for its intended None of the
E2 purpose Durability Quality Cost Usability above 2
____________ of supplier can have impact on shipping time, response time, Technical
E3 transportation cost, meet rush orders. Price Location cost Process Cpabilities 2

In vendor rating, _______________ it relates all identifiable purchasing costs to

Weighted Point Cost Ratio Performance Categorical None of the
the value shipments received from respective suppliers
E4 Plan Plan Ratio Plan Plan above 2

In vendor rating, ______________ relies on experience and judgement of

Weighted Point Cost Ratio Performance Categorical None of the
individual buyers
E5 Plan Plan Ratio Plan Plan above 4
The supplier with an adequate capability of production to responed to increase Production Materials Reserve Performance None of the
E6 order of customer is called as Capacity Capacity Capacity Capacity above 3

Process planning is important step in Quality Materials Product Vendor Process

E7 Assessment Assessment Assessment Assessment Assessment 4

A firm consider the factors like quality, price, supplier reputation in market,
Vendor Vendor Vendor None of the
experience in business and after sales service with supplier is known as
E8 Vendor Analysis Selection Appraisal Capability above 1

Which one is the part of vendor evaluation and vendor rating Technical After Sales All of the
E9 Availability Capabilities
Sales Service Service above 5
Manpower Plant All of the
Factor consider for vendor rating is___________
E10 Quality Warrenty Skills Capacity above 5
Problem All of the
Vendor motivation approach consider the_________
E11 Reward Punishment Solving Training above 5
Quality
It is the system where inspection system developed, improved and maintained Production Assurance Process Product None of the
E12 System Sysem System System above 2
SR.N
O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A
Supplier Supplier Supplier None of the
____________ is a details examination of the polcies and capabilities of a supplier
E13 Certification Supllier Audit Partnership Training above 1

_________ means not only the total amount required but also the time schedule
sccording to which the goods are suupplied to meet buyer requrement
E14 Price Performance Cost Usability Quantity 5
Vendor Vendor Vendor Vendor None of the
Vendor evaluation is also known as
E15 Monitoring Selection Appraisal Capability above 1
The properties, features and qualities which cause us to yearn to possess it, Exchange None of the
F1 causing the item to be sold is called as Esteem Value Use Value Value Cost Value above 1
Information General Function Evaluation All of the
The steps involves in value analysis__________
F2 Phase Phase Phase Phase above 5
The total of material, labour and other costs that have to be incurred to produce Exchange None of the
F3 an item is called as Esteem Value Use Value Value Cost Value above 4
The properties, features and qualities which accomplish the use or work or service Exchange None of the
F4 causing the item to perform or serve end is called as Esteem Value Use Value Value Cost Value above 2

It involves study of the functions of manufactured parts, purchase items, parts and
components to check whether specifications can be change or modified to reduce
Vendor Vendor Value Value None of the
the cost without compromising the quality is known as
F5 Management Rating Analysis corelation above 3
__________ is a process in which members of value analysis team throw an idea Profit Brain None of the
F6 as they occurs during group session Price Analysis Negotiation Analysis Storming above 4
Different
Production
Selection criterio for value analysis are
Large Purchase Non Stadards High Scrap Requirement All of the
F7 items Parts Costs s above 5
The properties or qualities which enables us to exchange an item for something Exchange None of the
F8 else we want is called as Esteem Value Use Value Value Cost Value above

Who involved in value analysis Design Executive All of the

F9 Suppliers Purchasers Engineering Management above 5

Which step is not a part of value analysis process Purchasing Investigation Recommenda None of the
F10 Evaluation Phase Phase Phase tion Phase above 2
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O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A
Modification
of Change
Value analysis is achieved through techniques Like__________
Elimination of Manufacturi Variety source of All of the
F11 Parts ng Process reduction supply above 5
_________ is the customer subjective evaluation, cost adjustment of how well a Purchasing Performance None of the
F12 product meets or fulfill expectations Value Vendor Functions Functions above 1
________ express value as a comparison of what aproduct can do for the Mass Value All of the
F13 customer against what it costs to him Risk Production Equation Time above 3
Costs associated with storage of finished goods such as obsolescence, spoilage purchasing stock-out ordering All of the
F14 and insurance of goods are classified as carrying costs costs costs costs above 1
___________ is a document accompanies bill of exchange drawn under letter of Certificate of Letter of None of the
G1 credit Invoice Bill of Lading Origin Credit above 2
___________ is the documents normally prepared by an independent agency
other than the exporter to certify the conditions, quality of goods shipped as per Certificate of Inspection None of the
G2 the requirements of importer Letter of Credit Origin Packing List Certificate above 4
_________ is a document issued by a government authorities for authorising the Import Proforma None of the
G3 export of a specific consignment Export License License Invoice Packing List above 1

The cost of insurance and taxes are included in Inventory Cost of All of the
G4 Cost of ordering Set up cost carrying cost shortages above 3

It is an arrangement by which the importer is obliged to pay the exporter through

Inspection Letter of None of the
the undersaking given by the importers bak to exporter bank
G5 Certificate Credit Packing List Invoice above 2
Goods imported must be clear fast so that the goods can be use for productive
Commercial Certificate of Export Custom None of the
purpose is known as
G6 Invoice Shipment License Clearence above 4
__________ describe the merchandise indicates price and other details, name Certificate of Commercial Letter of None of the
G7 address of buyer and sellers, port of dischage etc Origin Invoice Credit Packing List above 2

Advantages of international purchasing __________ Economical Value added Low Capital

G8 Better Quality Pricing Product Investment All of Above 5
__________ are documents which accompany bill of exchange drawn under letter Certificate of Letter of None of the
G9 of credit Invoice Bill of Lading Origin Credit above 1
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O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A
______________ is a documents issued by government authorising the import of Import Proforma None of the
G10 a specified consignment Export License License Invoice Packing List above 2
It is use for banking purpose and send in advance to enable the buyer firm to Certificate of Proforma None of the
G11 obtain an import permit or exchanege permit Packing List Origin Packing List Invoice above 4
____________ is serve to indicate the exact nature, quality of contents and Inspection None of the
G12 quantity of each package in a shipment Letter of Credit Packing List Certificate Invoice above 2
The custo invoice is a document prepared by seller on a prescribe form. It is
generally use to clear merchandize through custom of importers country is known Certificate of Custom Letter of None of the
G13 as Origin Packing List Invoice Credit above 3
_______________ is a certifying documents from the country where goods Letter of Certificate of None of the
G14 originated from. Packing List Invoice Credit Origin above 4
Exporter Mate's Invoice None of the
__________ receipt which is a document issued in lieu of bill of lading
G15 Importer Receipt Receipt Receipt Receipt above 3

(Reorder
level)*2 + (Reorder
Reorder level – (Nornal (order level + level +
The minimum stock level is calculated as
(Nornal consumption Normal Normal
consumption x x Normal consumption consumption)
Normal delivery delivery ) x 2*Normal / Normal None of the
H1 time) time) delivery time delivery time above 1

The Minimum
stock level
‘Buffer stock’ means
below which
Maximum actual stock
1/3 of the actual ½ of the stock in should not All of the
H2 stock actual stock inventory fall above 4
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O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A

vital, vital, vested,

In inventory management VED means vital, essential empowers essential and essential and
and desirable and desirable degrade desirable None of the
H3 items items items items above 1
Work in
This is the store where goods are subject to custom duty are stored and goods are
Stationary Progress
debonded when needed for production, custom clearence is known as
H4 Production Store Store Store Bonded Store Salvage Store 4
This type of store serves the requirements of a particular production unit and its Departmenta None of the
H5 location near to manufaturing unit Sub Store l Store Central Store Group Store above 1
scarce, scarce, scarce,
difficult and develop and difficult and
In inventory management SDE means slow, difficult easily easily essential
and easily available available available None of the
H6 available items items items items above 2
Stationary None of the
__________ is a place where all kinds of measuring and cutting tools are stored
H7 Packing Store Store Tool Store General Store above 3

___________ is generally attach with sales department or shipping department Finish Goods Raw Material Semi Finish Centralized None of the
H8 Store Store Goods Store Store above 1
This type of store is storing production materials such as oils, fixtures etc. is called Production Stationary Finish Goods
H9 as Salvage Store Store Store Bonded Store Store 2
high, high,
highest, medium moderate medium and high, medium
In inventory management HML means
and low value and low least valueand low value None of the
H10 items value items items items above 4
All of the
Physical store consider_____
H11 Central Store Transit Store Inward Store Holding Store above 5
Work in
This is the storage place where semi processed parts are stored for some time
Production Stationary Progress None of the
before they are move to next stage of processing is known as
H12 Salvage Store Store Store Store above 4
SR.N
O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A

fast moving, fast moving,

In inventory management FNS means full moving, fast moving, normal normal
normal moving neglected moving and moving and
and slow moving and slow sure moving slow moving None of the
H13 items moving items items items above 4
All of the
Materials are classified based on_____
H14 Weight Size Type Destination above 5

This type of store where raw materials are use for production are store is called as Production Stationary Raw Material
H15 Salvage Store Store Store Store Sub Store 4

Which of the following factor is not consider in inventory decisions Ordering Cost of Machining Inventory Cost of None of the
I1 Materials cost Carrying cost shortages above 2

Inventory purchase in bulk quantity in anticipation of shortage of materials or

Safety Stock In Process Pipe Line Anticipation
prise rise is called as
I2 Cycle Inventory Inventory Inventory Inventory Invetory 5
Materials Materials Materials Materials
MRP Stands for Replenishment Requirement Research Relocation None of the
I3 Planning Planning Planing Planning above 2
Semi finished Finished All of the
Which of the following is not an inventory?
I4 goods Machines Raw material products above 2
Just in None of the
JIT stands for
I5 Just In Test Threats Just in Table Just In Time above 4
Storage All of the
Which of the following is included as an inventory holding cost?
I6 Handling Insurance Pilferage facilities above 1
annual annual
The average inventory in per units is multiplied with annual relevant carrying cost relevant relevant annual
of each unit to calculate is known as annual irrelevant carrying ordering irrelevant All of the
I7 purchasing costs costs costs quality costs above 2
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O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A
Effective Economic
EOQ stands for Excess Order Equal Order Order Order Equtable Order
I8 Quantity Quantity Quantity Quantity Quantity 4
_________ inventories are held to avoid stockout condition which causing
Safety Stock Excess Stock Low Stock Cost Control None of the
stoppage of production
I9 Inventory Inventory Inventory Inventory above 1
economic
Buying of items or materials for production and delivered directly on order
manufacturing facility or shop floor of company is known as quantity Just in Time None of the
I10 Lead Time purchasing both a and b purchasing above 4

All of the
Inventory are classified as
Semi Finish Consumable Maintenance above Correct
I11 Raw Materials Goods Goods Spare Parts Answe 5
Receivable Reorder Receptable Recurring None of the
ROL stands for
I12 Order Level Order Level Order Level Order Level above 2

Shortage cost reffered as Stock Out Inventory All of the

I13 Inventory Cost Stock Carrying cost Ordering Cost above 2
Finish Goods Production Pipe Line Purchase Safety Stock
The materials which has been order but not received is called as
I14 Inventory Inventory Inventory Inventory Inventory 3

Inventories are maintain the reserve stock to meet the unexpected fluctuation of
FluctuationPipe Line Finish Good None of the
demand over a period which can not be precisely predicted is known as
I15 Cycle Inventory Inventory Inventory Inventory above 2
_________ items are those which have been drawn from store at least once in Regular None of the
J1 two years Slow Moving Non Moving Moving Fast Moving Above 4

_____________ means a part or sub unit or a major assembly which is available in

Quality Demand Spare Part Repair None of the
stock for substitution when needed
J2 Management Management Management Management Above 3
____________ spare parts are also parts which are identical to certain parts of the
machine or equipments but which are suppose to have a life time which in most
cases is the same or longer than the service life time of the machine or None of the
J3 equipments Irregular Use Regular Use Periodic Use Certain Use Above 1
SR.N
O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A
________ is undertaken periodically to have a through check up of the machine or Maintenance Rotable OverhaulingInsurance None of the
J4 equipment to give a new lease of life to it Spare Spare Spare Spare above 3
_______ these are the spare parts which are repaired and rectified and kept in Maintenance Rotable OverhaulingInsurance None of the
J5 store for reuse Spare Spare Spare Spare above 2
Original
Original Only Electrical
OEM stands for Original Equipments Electrical Machine
Electrical Manufacture Manufacture Manufacturer None of the
J6 Manufacturer r r e above 2
________ items are those which have not been drawn from stores even once in Regular None of the
J7 five years duration Slow Moving Non Moving Moving Fast Moving Above 2
__________ are those which are in good condition but which are no longer useful Pilferage Overdtocking None of the
J8 for the company operation Obsolete Spare Spare Stock Spare Spare above 1
___________ spare parts are those which are identical to certain parts in the
None of the
machine or equipments but having a life time which is less than machine as whole
J9 Irregular Use Regular Use Periodic Use Certain Use Above 2
_________ items are those which have not been drawn from stores at least once Regular None of the
J10 in two to four years period Slow Moving Non Moving Moving Fast Moving Above
Machine
Reliability is measured in terms of __________ which is the reciprocal of failure Machine Time Mean Time
rate Machine Time Time Block Between Between None of the
J11 Between Failure Failure False Failure above 4
None of the
Life of these spare parts is usually the same orxslightly lesser than that of the
Emergency All of above Above A, B and
machine
J12 Insurance Spare Capital Spare Spare A,B and C C 4

Spare parts which are required for replacement of old parts due to break down by
Overhauling Insurance Maintenance None of the
wear and tear are called as__________
J13 Rotable Spare Spare Spare Spaer Parts above 4

Integrated Materials Planning includes Integrated Materials Planning includes Inventory Stock Vendor All of the
K1 FSN Analysis Levels Verification Rating above 5
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O DESCRIPTION OPTION1 OPTION2 OPTION3 OPTION4 OPTION5 A

Materials Finish goods

Materials Planning contains following steps
Forecast of Requirement inventory on Bill of All of the
K2 Finish Goods s hand Materials above 5

Goods Goods
GIGO stands for
Goods In, Goods Garbage In, Inspection, Inspected, None of the
K3 Out Garbage Out Goods Out Goods Order above 2
Material Material
MRN stands for Material Material Relocation Receiving None of the
K4 Rejection Note Related Note Note Note above 4
Delivery All of the
Vendor evaluation consider
K5 Suppliers history rating Price rating Quality rating above 5
Tools In, Tools Trash In, Trach In, Trade In, None of the
TITO stands for
K6 Out Trash Out Track Out Trade Out above 2
Master Mean Merchant Managing
Estimation of finish products to be produced for time period such as quarter or
Production Production Production Production None of the
month or week
K7 Schedule Schedule Schedule Schedule above 1