Engineering Economy and Costing - Operations research and Operations management - Production & Industrial Engineering Previous Year Questions

1

2007 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2007

During an economic analysis of a capital investment proposal, the cost that can be ignored is

A

Sunk cost

B

Fixed cost

C

Marginal cost

D

Variable cost

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2

2007 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2007

An asset investment is made for Rs. 1,20,000. The uniform costs per year are Rs. 40,000 in operating the asset. Uniform benefits per year are either Rs. 60,000 or Rs. 80,000, judged to be equally likely. What is the expected payback period?

A

3

B

4.5

C

6

D

9

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3

2008 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2008

A reservoir contains an estimated 30,00,000 barrels of oil. The initial cost of the reservoir is Rs. 1,50,00,000. If 2,00,000 barrels of oil are produced from this reservoir during a particular year, how much will be the depletion charge (cost depletion) for that year?

A

Rs. 10,00,000

B

Rs. 15,00,000

C

Rs. 20,00,000

D

Rs. 25,00,000

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4

2008 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2008

A machine costing Rs. 2 lakh, (salvage value of the machine at the end of 4 years = 0) is to be depreciated over 4 years using the double declining balance depreciation method. The amount of the depreciation charged in the 3rd year is

A

Rs. 1.000 lakh

B

Rs. 0.500 lakh

C

Rs. 0.250 lakh

D

Rs. 0.125 lakh

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5

2008 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2008

A man has deposited Rs. 1,000 per year for three years in a bank that paid him 5% interest compounded annually. At the end of three years, he had Rs. 3,153 in his account. How much more would he have earned if the bank had paid him 5% interest compounded continuously?

A

Rs. 300

B

Rs. 30

C

Rs. 3

D

Rs. 0.30

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6

2009 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2009

For a granted patent to last for 20 years, the patent must be

A

owned by the inventor

B

renewed and maintained

C

novel

D

non-obvious

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7

2009 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2009

A spare parts retail shop has sales of Rs. 4,00,000 and a profit of Rs. 50,000 for a product, in its first quarter. The profit volume (PV) ratio is 25%. The margin of safety = profit / PV ratio. The break even point of sales (in Rs.) is

A

20,000

B

40,000

C

2,00,000

D

4,00,000

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8

2010 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2010

The ratio of new to old Break Even Sales is

A

0.25

B

0.50

C

0.75

D

1.50

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9

2010 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2010

The firm desires to make a profit equal to the fixed cost of the product. In this scenario, the ratio of new to old Required Sales Volume is

A

0.25

B

0.50

C

0.75

D

1.50

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10

2011 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2011

Which one of the following is NOT a method of calculating depreciation?

A

Straight line method

B

Sum of year digits (SYD) method

C

Declining balance method

D

Net present value method

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11

2011 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2011

The variable cost (V) of manufacturing a product varies according to the equation V= 4q, where q is the quantity produced. The fixed cost (F) of production of same product reduces with q according to the equation F = 100/q. How many units should be produced to minimize the total cost (V+F)?

A

5

B

4

C

7

D

6

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12

2012 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2012

The profit after tax (PAT) is

A

Rs. 92,800

B

Rs. 66,200

C

Rs. 72,800

D

Rs. 52,800

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13

2012 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2012

The net cash flow is

A

Rs. 97,800

B

Rs. 77,800

C

Rs. 66,000

D

Rs. 72,800

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14

2012 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2012

The cost function for a product in a firm is given by \(5q^2\), where \(q\) is the amount of production. The firm can sell the product at a market price of ₹50 per unit. The number of units to be produced by the firm such that the profit is maximized is

A

5

B

10

C

15

D

25

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15

2013 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2013 [Session 1]

The fixed cost and the variable cost of production of a product are Rs. 20000 and Rs. 50 per unit, respectively. The demand for the item is 500 units. To break even, the unit price of the items in Rs. should be

A

50

B

75

C

90

D

100

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16

2013 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2013 [Session 1]

Following data refers to an automat and a center lathe, which are being compared to machine a batch of parts in a manufacturing shop.

	Automat	Center Lathe
Machine Set-up Time in min	120	30
Machine Set-up Cost in Rs./min	800	150
Machining Time per piece in min	2	25
Machining Cost in Rs./min	500	100

Automat will be economical if the batch size exceeds

A

28

B

32

C

61

D

75

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17

2013 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2013 [Session 2]

Following data refers to an automat and a center lathe, which are being compared to machine a batch of parts in a manufacturing shop.

	Automat	Center Lathe
Machine Set-up Time in min	120	30
Machine Set-up Cost in Rs./min	800	150
Machining Time per piece in min	2	25
Machining Cost in Rs./min	500	100

Automat will be economical if the batch size exceeds

A

28

B

32

C

61

D

75

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18

2013 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2013 [Session 4]

Following data refers to an automat and a center lathe, which are being compared to machine a batch of parts in a manufacturing shop.

	Automat	Center Lathe
Machine Set-up Time in min	120	30
Machine Set-up Cost in Rs./min	800	150
Machining Time per piece in min	2	25
Machining Cost in Rs./min	500	100

Automat will be economical if the batch size exceeds

A

28

B

32

C

61

D

75

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19

2014 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2014

A manufacturing company must select a process for its new product, VS-5, from among two alternatives. The following cost data have been gathered.

Cost	Process X	Process Y
Fixed	Rs. 10,000	Rs. 40,000
Variable	Rs. 5/unit	Rs. 2/unit

If the objective is to select a process with the least total cost for a given demand, which one of the following is the most appropriate choice?

A

Below 10,000 units, Process X; Above 10,000 units, Process Y

B

Below 10,000 units, Process Y; Above 10,000 units, Process X

C

Below 20,000 units, Process X; Above 20,000 units, Process Y

D

Below 20,000 units, Process Y; Above 20,000 units, Process X

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20

2016 · Production & Industrial Engineering · Operations research and Operations management · Engineering Economy and Costing

Production & Industrial Engineering (PI) 2016

In a given year, a restaurant earned INR 38,500 in revenues. In that year, total expenses incurred were INR 30,000 and the depreciation amount was INR 3,200. At 40% tax rate, the net cash flow (in INR) for that year was ____.

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