ISM Supply Management Integration - INTE Exam Practice Test

A firm is looking to expand to a larger warehouse. Which of the following should be given the GREATEST consideration when determining the new warehouse's environmental impact?

A company would like to reduce its inventory. The firm's investment in inventory represents 12% of the company's $11 million total assets. The inventory carrying cost is 20%. An inventory reduction of $1 million is considered a feasible goal. What impact would meeting this goal have on profit?

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 firm sells an average of 2,000 units of snacks from its existing stock while it waits for orders to be delivered. Demand during lead time varies in accordance with a normal distribution. The firm's supply manager prepares a presentation to explain the concept of customer service and safety stock levels using the following figure:

What does the shaded area D (in red) represent?

A company that has never focused on supply management in the past is now faced with increasing competition from new, innovative products entering its market. As a result, the firm's business strategy includes an increased focus on cost containment. Given this situation, which of the following should the company do FIRST?

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?

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 of aircraft seating receives a forecast from a major aircraft manufacturer. The forecast information is considered confidential, and thus the supplier must sign a Non-Disclosure Agreement (NDA). Given this situation, which of the following is MOST likely to be protected by the NDA?

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 company is expanding its production capability. A project manager is assigned to bring a team of stakeholders together to conduct an analysis of the situation and develop a plan. During the analysis, the project manager gains an understanding of what resources stakeholders are willing to commit, the stakeholders' expectations, and what the stakeholders have to gain from the project. This analysis is MOST likely to identify which of the following?

A company finds that tracking demand for products sold at its retail outlets makes forecasting a challenge.
Which of the following would be MOST useful in providing rapid updates when dealing with suppliers?

A scientific equipment company wants to encourage its key suppliers to participate in the firm's quality certification program. The process is detailed and time-consuming. Which of the following is likely to be the GREATEST benefit to the buying organization?

A manufacturing firm's facility operates a level production strategy. The initial demand plan is as follows:
MonthJanFebMarAprMayJunJulAug
Unit Sales12,00026,00026,00021,00020,00020,00015,00020,000
Production20,00020,00020,00020,00020,00020,00020,00020,000
The supply management department learns that one of its retailers is planning a promotional event on August
1st that it expects will require an additional 19,000 units. There are 5,000 units in stock for the beginning of January, and maximum inventory holding is 15,000 units.
How many units per month should production increase in order to meet the requirements of its retailer and minimize overall inventory levels?