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Supply Management Integration

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Total Questions : 167

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Question # 1

A warehouse manager notices that there has been a constant shortage of 4K TVs for the last few months. An investigation finds that the TVs have been stolen, even though warehouse access is strictly controlled by employee ID badge. In this situation, the warehouse manager's FIRST course of action should be to

Options:

A.  

set up a security camera inside the warehouse facility

B.  

perform more frequent cycle counting on the 4K TVs and monitor the transaction history more closely

C.  

set up a cage and lock the storage location of the 4K TVs

D.  

call a meeting to inform the employees of the finding, advising them to be aware of the situation

Discussion 0
Question # 2

A manufacturing firm redesigns its premier product to benefit from material standardization. The change will entail re-tooling costs. The firm conducts a cost benefit analysis on four possible options. Option 1 is to make no change at all. Options 2, 3, and 4 represent different re-tooling configurations involving different materials:

Option 1Option 2Option 3Option 4

Re-tooling Costs (Year 1)$0$800,000$1,000,000$1,200,000

Material Costs

Year 151,000,000$700,000$650,000$600,000

Year 2$1,100,000$750,000$700,000$650,000

Year 3SI,200,000$800,000$750,000$700,000

Year 451,300,000$850,000$800,000$750,000

Year 551,400,000$900,000$850,000$800,000

Total$6,000,000$4,000,000$3,750,000$3,500,000

Labor Costs

Year 1$1,000,000$700,000$650,000$600,000

Year 2$1,100,000$770,000$715,000S660,000

Year 3$1,210,000$847,000$786,500$726,000

Year 4$1,331,000$931,700$865,150$798,600

Year 5$1,464,100$1,024,870$951,665$878,460

Total$6,105,100$4,273,570$3,968,315$3,663,060

In addition to this, there will be a cost of $3.5 million in lost production during Year 1, should any of the re-tooling options (2, 3, or 4) be selected.

The firm wants to rank the options in order of financial preference, from the best option to the worst. Based on this information, how should the four options be ranked?

Options:

A.  

2, 3, 1, 4

B.  

4, 1, 3, 2

C.  

4, 3, 2, 1

D.  

1, 2, 3, 4

Discussion 0
Question # 3

A company requires a physical tracking system for goods received and handled in its warehouse. The firm's executive management requests a report to justify funding for the tracking system. Which of the following is the PRIMARY point the report should address?

Options:

A.  

Training opportunities on scanner technology

B.  

Waste stream tracking

C.  

inventory accuracy

D.  

Use of physical tracking by competitors

Discussion 0
Question # 4

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

Options:

A.  

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

B.  

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

C.  

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

D.  

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

Discussion 0
Question # 5

Which of the following will be MOST useful for measuring service quality?

Options:

A.  

Invoice procedures

B.  

Fitness for purpose

C.  

Warranty response

D.  

Accurate documentation

Discussion 0
Question # 6

XYZ Company is a manufacturer that buys raw materials from Supplier

A.  

In the past several years, Supplier A has experienced increasingly unpredictable order patterns from XYZ, which has necessitated it carry more inventory as safety stock. A meeting with XYZ reveals that this is because XYZ frequently stocks out of items its upstream customers require, and thus orders more than it needs in order to ensure that it is covered. Which of the following BEST describes the problem within this supply chain?

Options:

A.  

Growth stage in a product cycle

B.  

Risk transfer

C.  

Fluctuating lead times

D.  

Bullwhip effect

Discussion 0
Question # 7

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?

Options:

A.  

Place orders using the economic order quantity

B.  

Negotiate a new contract with the supplier to modify price breaks

C.  

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

D.  

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

Discussion 0
Question # 8

An organization purchases materials beyond current and anticipated requirements in expectation of a price increase or shortage, in the hope that it will profit from the sale of the materials at a later date. This describes which of the following buying strategies?

Options:

A.  

Consignment

B.  

Forward

C.  

Speculative

D.  

Spot

Discussion 0
Question # 9

PQR, Inc. produces office supplies for big box retailers. This is a highly competitive market and the requirement for maintaining a continuous inventory of product for retailers is a high priority for PQR. Recently, the firm experienced shipping delays from overseas suppliers. Which of the costs associated with shortages would be MOST critical for PQR?

Options:

A.  

Idle workers

B.  

Production downtime

C.  

Expedited shipping

D.  

Lost sales

Discussion 0
Question # 10

A cross-functional team evaluates the feasibility of a new product line for a company. This type of study is BEST described as

Options:

A.  

risk analysis

B.  

cost analysis

C.  

C spend analysis

D.  

market analysis

Discussion 0
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