ISM Supply Management Integration Exam Practice Test

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Total 167 questions
Question 1

MNO, Inc. is a national retail home goods chain formed of local franchisees. Each franchisee uses its own returns processing systems. A key advertising point for MNO is its liberal return policy, which is part of its overall focus on excellent customer service. While feedback from customers is positive regarding MNO's return policy, there have been inquiries as to why stores handle returns via different processes. MNO's supply manager suggests the implementation of a reverse supply chain to deal with this issue and possibly yield cost enhancement opportunities. In order to implement this, which of the following is the FIRST course of action the supply manager should take''



Answer : A

Implementing a reverse supply chain requires first defining a consistent return process that can be integrated into the existing forward supply chain. This ensures that all franchisees follow the same procedures for handling returns, which enhances efficiency, customer satisfaction, and potentially reduces costs. Standardizing the return process also allows for better tracking and management of returned goods, improving overall supply chain performance. By addressing this foundational step first, MNO, Inc. can ensure a smoother implementation of the reverse supply chain. Reference:

* Rogers, D. S., & Tibben-Lembke, R. (2001). An Examination of Reverse Logistics Practic-es. Journal of Business Logistics, 22(2), 129-148.

* Blanchard, D. (2010). Supply Chain Management Best Practices. John Wiley & Sons.


Question 2

UVX, Inc. is seeking suppliers of components to be used in a new heavy equipment product UVX is introducing in the marketplace. The firm conducts a market intelligence analysis and spend analysis to determine feasibility. These findings are reported to the company stakeholders, who decide to produce 25 units every two weeks. UVX issues a solicitation for bids and includes the stakeholders' requirements with the specifications.

At the close of the bidding process, UVX receives one offer that can deliver enough components to produce 15 units every four weeks. The remaining potential bidders decline altogether, citing an inability to meet UVX's specifications.

Which of the following should UVX have done in order to ensure a better response to the solicitation?



Answer : C

Early Supplier Involvement (ESI) is a practice where suppliers are included early in the product development process. This can help UVX, Inc. by providing the suppliers with ample time and in-formation to understand and meet the specifications and requirements. By involving suppliers ear-ly, UVX can also benefit from the suppliers' expertise in manufacturing, which may lead to better design decisions, cost savings, and improved product quality. In the scenario provided, had UVX engaged potential suppliers early on, they would have been better positioned to understand the challenges and constraints of the suppliers, potentially leading to more bids that meet the re-quirements. Reference:

* Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and Supply Chain Management. Cengage Learning.

* Cousins, P. D., Lamming, R., Lawson, B., & Squire, B. (2008). Strategic Supply Manage-ment: Principles, Theories and Practice. Pearson Education.


Question 3

A chemical supply company creates a new liquid chemical product which must be shipped by tanker truck. The new chemical is expected to constitute 10% of the firm's sales over the next five years. The company's other sales are all solid powder chemicals. Given these circumstances, which of the following will be the MOST cost effective method for the company to ship the new product'



Answer : D

Utilizing a third-party logistics (3PL) provider specializing in liquid transport offers cost-effective shipping solutions without the need for significant capital investment in specialized equipment. This approach allows the company to focus on core activities while leveraging the expertise and infrastructure of the 3PL provider.


Question 4

How long after the delivery date must a freight claim on a motor carriage shipment be presented and filed with the carrier in the United States'



Answer : D

In the United States, freight claims for motor carriage shipments must be filed within nine months of the delivery date. This timeframe is mandated by regulations to allow shippers and carriers to address disputes over transportation damages or losses.


Question 5

Which of the following is MOST likely to be an advantage of a standardization program?



Answer : D

Standardization ensures that products meet uniform quality standards, reducing variability and enhancing customer satisfaction. This advantage is vital in maintaining brand reputation and streamlining production processes.


Question 6

A sourcing manager needs to outsource production in order to meet demand for a specific product. The internal production schedule and forecasted sales have been provided for the next nine months. Internal production follows a level schedule of 4,000 units per month and up to 7,000 units may be stored in inventory. There is no beginning inventory for January. During what month(s) will outsourced production be required to meet forecasted sales?

Month Jan Feb Mar Apr May Jun Jul Aug Sep

Unit Sales 3,000 3,000 4,000 1,000 9,000 5,000 4,000 3,000 5,000



Answer : D

Outsourcing is required in May, June, and September to meet sales forecasts. Internal production is capped at 4,000 units per month, and inventory can buffer only up to 7,000 units. The high sales months exceed these capacities, necessitating additional outsourcing.


Question 7

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



Answer : B

Resiliency planning and risk assessment in global supply chains are critical due to the potential impact of natural and man-made disasters. These events can disrupt operations, affecting logistics, supply continuity, and financial performance. Effective risk management strategies mitigate such disruptions, ensuring supply chain stability.


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Total 167 questions