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ISM Supply Management Integration Sample Questions (Q60-Q65):
NEW QUESTION # 60
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. The cost of replacing single pane windows
- B. The cost of changing light bulbs to LED lights
- C. The efficiency of the warehouse's air conditioning unit
- D. The building's total carbon footprint
Answer: D
Explanation:
When considering a new warehouse's environmental impact, the building's total carbon footprint (Option A) should be given the greatest consideration. This encompasses the overall emissions and energy consumption of the warehouse, which has a broader and more significant effect on the environment compared to specific aspects like air conditioning efficiency or light bulb costs. By focusing on the total carbon footprint, the firm can address both direct and indirect emissions, ensuring a comprehensive approach to sustainability.
Reference: Environmental Protection Agency guidelines on carbon footprint assessments.
NEW QUESTION # 61
BCD, Inc. is an electronics manufacturer. For many years, BCD has purchased custom white packaging with the company's signature black and red logo. Recently, BCD's quality team rejected a large number of these boxes due to the red and black portions of the logo not being correctly aligned. In addition, BCD's program manager has requested that supply management reduce the costs of the packaging, which have risen dramatically in recent years.
BCD's supply manager meets with the current supplier and learns the following:
1)The two-tone logo requires multiple setups, and the logo is often misaligned, leading to scrap
2)A single-color logo will not have alignment problems
3)The white boxes are more expensive to produce than plain cardboard boxes
4)The marketing team has determined that the all-white packages are no longer a unique way to brand the organization's products Given this situation, which of the following would be the BEST course of action for BCD's supply manager to take?
- A. Create and issue a Request for Proposal (RFP) in order to find new suppliers to provide the all-white boxes with the two-tone logo
- B. Renegotiate the current pricing for the white boxes by increasing volume and contracting for a longer period of time
- C. Work with the supplier's quality team to correct the misalignment problem
- D. Work with the quality and marketing teams as well as the supplier to negotiate the purchase of plain boxes with a single-color logo
Answer: D
Explanation:
The best course of action is to work with the quality and marketing teams, as well as the supplier, to negotiate the purchase of plain boxes with a single-color logo. This solution addresses the alignment issues and reduces costs while aligning with the marketing team's assessment that all-white packaging is no longer unique.
Reference: Cost reduction and quality improvement in supply chain management.
NEW QUESTION # 62
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. Stock level
- B. Variance
- C. Cycle time
- 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 # 63
XYZ, Inc. is a manufacturer and distributor of fishing gear. XYZ relies on poorly-executed forecasts from its retail partners, which leads to exaggerated demand. This in turn leads to XYZ experiencing increased inventory, material handling concerns, and difficulties managing its accounts payable. Which of the following BEST describes what is occurring in this situation?
- A. Bullwhip effect
- B. Backflush
- C. Speculative buying
- D. Adaptive smoothing
Answer: A
Explanation:
The situation describes the bullwhip effect, where poor forecasting by retail partners leads to exaggerated demand signals, causing inefficiencies like excess inventory and handling challenges. This effect is common in supply chains with inadequate communication and coordination. References: Supply chain management literature extensively discusses the bullwhip effect as a critical issue in demand forecasting and inventory management.
NEW QUESTION # 64
A large retailer and one of its suppliers establish a process to combine intelligence from both organizations in order to improve product availability while reducing inventory, transportation, and logistics costs. This process is known as which of the following?
- A. Vendor-managed inventory
- B. Sales and operations planning
- C. Collaborative planning, forecasting and replenishment
- D. Enterprise resource planning
Answer: C
Explanation:
The process described is Collaborative Planning, Forecasting and Replenishment (CPFR), which involves both the retailer and supplier working together to improve product availability and reduce costs associated with inventory, transportation, and logistics. References: CPFR is a widely adopted strategy in supply chain management to enhance collaboration and optimize the supply chain.
NEW QUESTION # 65
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