Supply Management Integration (INTE) Free Practice Test

Question 1

A firm has created the following process flow diagrams depicting two possible strategies for the production of a new product line. The triangles represent inventory, and the rectangles represent processing. Each of the two options start with the same raw materials, and both create the product through two stages of processing.

Which of the following statements is correct?

A. Option B's product is an example of delayed differentiation.

B. Option B's customers are likely to wait longer before receiving the product.

C. Option A's product will be equally as expensive to make as Option B's.

D. Option A's product is customizable for customers.

Correct Answer: A

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Question 2

Which of the following are the quickest ways to ship food products in order to ensure they do not spoil?

A. Air freight and motor carriage

B. Motor carriage and rail

C. Water and motor carriage

D. Air freight and rail

Correct Answer: A

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Question 3

DEF, Inc. is in the ramp-up phase of a unique medical device. The device has a two-year life expectancy. The sales forecast for the ramp-up period is as follows:
MonthJulAugSepOctNovDecJanFeb
Unit Sales1001502006001,4002,2004,00010,000
Demand after February is expected to remain at 10,000 units per month for several months, then decrease gradually. The units are small, and thus maintaining an inventory of up to 10,000 units is possible.
There are only three suppliers capable of providing the specialized component critical to this product. The production capacities of these suppliers are as follows:
*Supplier X has a capacity of 500 units per month at a cost of S20 per unit, representing 80% of its total business
*Supplier Y has a capacity of 2,000 units per month at a cost of S2O.5O per unit, representing 50% of its total business
*Supplier Z has a capacity of 20,000 units per month at a cost of $20.70 per unit, representing 10% of its total business Two of these companies-Supplier X and Supplier Y-are minority businesses.
Given this situation, DEF should contract with

A. Supplier Z only, as it can best fulfill the forecasted demand

B. Suppliers X and Y, and work with them to increase their production capability

C. all three companies in a tiered system, with up to 5,000 units from Supplier X, 20,000 units from Supplier Y, and the remainder from Supplier Z

D. all three companies in a tiered system, with up to 40% from Supplier X and Y's total monthly business, and the remainder going to Supplier Z

Correct Answer: D

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Question 4

A company supply manager conducts a review of current freight contracts and finds that payments to the primary carrier for outbound shipments have been based on a published rate schedule, which is revised annually. The supply manager believes the shipping costs may be higher than necessary. In order to reduce outbound transportation costs, which of the following should the supply manager do FIRST'

A. Solicit proposals from several other reputable carriers

B. Explore savings opportunities with the primary carrier

C. Initiate a carrier cost audit

D. Perform a carrier performance review

Correct Answer: B

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Question 5

Based on the global reach and complexity of supply chains, resiliency planning and risk assessment are necessary because of which of the following'

A. Uncollected receivables

B. Natural and man-made disasters

C. Supplier bankruptcies in competitive markets

D. Lack of training within the organization

Correct Answer: B

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Question 6

\NXY, Inc. buys high-quality fragile products from a supplier. Numerous shipments from this supplier have arrived with dents on the packages, resulting in damaged products. Given this situation, which of the following is the FIRST course of action WXY should take?

A. Verify that the Incoterms 2010 rule being used ensures that the responsibility is not on the supplier's side

B. Modify the product design in order to avoid damages during transit

C. Contact the freight forwarder and inquire as to why such damages are occurring so frequently

D. Send the supplier pictures of the damaged packages and request improvements

Correct Answer: D

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Question 7

A supplier with a previously good performance record has recently been shipping parts with a number of flaws, making them unusable for production. The firm's supply manager would like to resolve these problems before taking more drastic measures. Which of the following actions should the supply manager take FIRST'

A. Re-work the parts in-house and bill the supplier for any costs incurred

B. Test the parts at an independent laboratory and notify the supplier of the results

C. Explore possible root causes, including changes in the supplier's production processes

D. Ask engineering to review tolerances on non-critical specifications and relax them if possible

Correct Answer: C

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Question 8

The packaging optimization process begins by understanding which of the following?

A. Packaging density

B. Transportation modes

C. Packaging budget

D. Product characteristics

Correct Answer: D

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Question 9

Which of the following refers to the practice of buying a commodity on the open market for immediate delivery?

A. Hedging

B. Spot buying

C. Speculative buying

D. Forward buying

Correct Answer: C

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Question 10

DFG Inc. has been experiencing declining sales in its consumer division. After analyzing its sales data, the company determines that racial and ethnic minorities are underrepresented as consumers of its products. DFG decides to focus on increasing its appeal to these groups. DFG's products are of excellent quality and value, and the firm believes that its sales are weak with this segment because of a lack of knowledge about DFG and its products.
Which of the following is the FIRST step that DFG should undertake?

A. Have DFG's public relations group promote the firm's racially and ethnically diverse executive leadership in large media outlets

B. Hire a marketing and advertising firm that specializes in the minority consumer segment to build and monitor a program aimed at racial and ethnic minority customers

C. Publicize DFG's supplier diversity program, which has grown in both the number of participating suppliers and the amount of materials purchased from diverse suppliers

D. While advertising the quality and value of their products, offer coupons via direct marketing that target minority communities

Correct Answer: B

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Question 11

If a shipment has a gross weight of 500 pounds and overall dimensions of 42 inches x 48 inches x 48 inches, what is the density of the shipment (in pounds per cubic foot)?

A. 0.005

B. 5.0

C. 8.9

D. 0.744

Correct Answer: C

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Question 12

A manufacturer has historically ordered fasteners utilizing monthly fixed order quantities. The firm wishes to explore the feasibility of using economic order quantity (EOQ), and determines that the EOQ is less than the supplier's quoted price break. Which of the following is the BEST course of action for the firm to take?

A. Place orders using the economic order quantity

B. Compare the price break to the carrying cost of buying at the economic order quantity

C. Negotiate a new contract with the supplier to modify price breaks

D. Implement a Vendor Managed Inventory program with the supplier to transfer carrying costs

Correct Answer: B

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Question 13

Which of the following ensures that project requirements are being met within project constraints?

A. Change management

B. Performance reporting

C. Scope management

D. Schedule variance

Correct Answer: C

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Question 14

When an organization is devising a long-term forecast, consulting external sources of information is MOST useful

A. for benchmarking a specific competitor

B. for setting realistic organizational goals

C. in eliminating irrelevant data

D. in gathering market intelligence

Correct Answer: D

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ISM Supply Management Integration (INTE) Free Practice Test