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ISM Supply Management Integration Sample Questions (Q32-Q37):

NEW QUESTION # 32
A supply manager for JKL, Inc. is negotiating a contract with a supplier of a component. The component will be used in a new product JKL Is manufacturing and plans to bring to market early next year. Which of the following will be the MOST important provision for the supply manager to negotiate for?

A. A fixed cost of raw materials that will remain stable over the following year
B. A low minimum order quantity that allows flexibility to buy additional materials
C. A sustainable packaging solution with recyclable transport crating
D. Ownership of the molds and dies used to manufacture the component

Answer: B

Explanation:
In negotiating contracts for new products, flexibility is crucial, especially when dealing with un-certainties in demand and production schedules. A low minimum order quantity (MOQ) provides JKL, Inc. with the ability to order smaller amounts of materials as needed, reducing inventory holding costs and the risk of overstocking.
This flexibility can be particularly important during the initial stages of product introduction when demand forecasts may be less certain. Ensuring a low MOQ can also facilitate better cash flow management and reduce the potential for waste. Refer-ences:
*Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and Supply Chain Management. Cengage Learning.
*Burt, D. N., Petcavage, S. D., & Pinkerton, R. L. (2010). Supply Management. McGraw-Hill Education.

NEW QUESTION # 33
A company's average inventory value has remained relatively constant, while its cost of goods sold has increased. Which of the following will also likely show an increase for this firm?

A. Cycle time
B. Variance
C. Stock level
D. Turnover

Answer: D

Explanation:
An increase in cost of goods sold while maintaining a constant average inventory value results in higher inventory turnover. This indicates improved efficiency in managing inventory relative to sales. References:
Inventory management metrics highlight turnover as a critical measure of how effectively inventory is being utilized.

NEW QUESTION # 34
A firm completes its near level production, five-month demand plan for the next business planning cycle:
Month 1Month 2Month 3Month 4Month 5
Demand Forecast15,00020,00025,00025,00018,000
Production Plan (Regular Time)20,00020,00020,00020,00018,000
Production Plan (Overtime)5,000
Ending Inventory5,0005,000
Average Inventory2,5005,0002,500
Workforce PlanningStarting WorkforceMonth 1Month 2Month 3Month 4Month 5 Hires7 Layoffs2 Actual Workforce Size132020202018 Regular Time Hours Required2,0002,0002,0002,0001,800 Overtime Hours Required500 Costs Regular time cost per unit$15 Overtime cost per unitS25 Monthly inventory cost per unit$1 Cost of hire$1,500 Cost of layoffS400 What is the cost of this demand plan?

A. $1,605,000
B. $1,606,300
C. $1,616,300
D. $180,800

Answer: B

Explanation:
The total cost is calculated by summing the costs of regular and overtime production, hiring, layoffs, and inventory. Calculations consider each month's figures and associated costs, providing a comprehensive total that aligns with supply chain cost management principles.

NEW QUESTION # 35
A company is designing a new warehousing strategy. The firm wants to hire the most qualified personnel, utilize the best technology, and minimize the repetition of inventory across operations. Which of the following warehousing strategies will be BEST suited toward attaining the organization's goals?

A. Hub and spoke
B. Decentralized
C. Centralized
D. Third-party

Answer: C

Explanation:
A centralized warehousing strategy minimizes the repetition of inventory across locations, optimizing resource utilization and technology use. It facilitates hiring qualified personnel and streamlining operations, which aligns with the firm's goals of efficiency and effectiveness in warehousing.

NEW QUESTION # 36
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. Potential conflicts that could impede the project's success
B. The roles and responsibilities of each stakeholder in the project
C. How much time there is to complete the project
D. Additional resources that will be needed to finalize the project

Answer: A

Explanation:
When a project manager brings stakeholders together to conduct an analysis, understanding the resources, expectations, and gains from the project is likely to identify potential conflicts that could impede the project's success. Identifying these conflicts early allows the project manager to address and mitigate them, ensuring smoother project execution. This is crucial for aligning stakeholder interests and maintaining focus on project goals. Other aspects like additional re-sources, time frames, and roles and responsibilities are important but typically come after under-standing and resolving any potential conflicts. References:
*Project Management Institute. (2017). A Guide to the Project Management Body of Knowledge (PMBOK Guide). PMI.
*Kerzner, H. (2017). Project Management: A Systems Approach to Planning, Scheduling, and Controlling.
Wiley.

NEW QUESTION # 37
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