ISM INTE Exam Practice Test Instant Access

Question 1

Which of the following describes a market structure where there are few sellers and many buyers and where price is controlled by either an industry leader or a cartel?

AMonopsony

BPerfect competition

CMonopoly

DOligopoly

Answer : D

An oligopoly is a market structure where a few sellers dominate the market and many buyers ex-ist. In such a market, prices and output levels are often controlled by the leading firms or through collusion, such as forming a cartel. These firms hold significant market power, which allows them to influence prices and other market factors. Oligopolies are common in industries where high en-try barriers exist, such as telecommunications, airlines, and oil and gas. Reference:

* Perloff, J. M. (2016). Microeconomics: Theory and Applications with Calculus. Pearson.

* Mankiw, N. G. (2014). Principles of Microeconomics. Cengage Learning.

Question 2

GHI, Inc. is a U.S.-based company with an expanding product line. GHI widens its sourcing of components to global suppliers, including suppliers in countries which are not included in trading blocs or bilateral agreements with the United States. Compliance with which of the following will MOST likely reduce GHI's administrative burden of cargo inspections on materials imported from these sources?

AUnited Nations Convention on Contracts for the International Sale of Goods (CISG)

BForeign Corrupt Practices Act (FCPA)

CGlobal Environmental Management Initiative (GEMI)

DCustoms-Trade Partnership Against Terrorism (C-TPAT)

Answer : D

GHI, Inc. would benefit most from compliance with the Customs-Trade Partnership Against Terrorism (C-TPAT) (Option D). This initiative helps reduce the administrative burden of cargo inspections by establishing security guidelines and facilitating faster customs processing for participating companies. By aligning with C-TPAT, GHI can ensure smoother import procedures, even when dealing with countries outside of specific trading blocs. Reference: U.S. Customs and Border Protection information on C-TPAT.

Question 3

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'

AExplore possible root causes, including changes in the supplier's production processes

BAsk engineering to review tolerances on non-critical specifications and relax them if possible

CTest the parts at an independent laboratory and notify the supplier of the results

DRe-work the parts in-house and bill the supplier for any costs incurred

Answer : A

When a previously reliable supplier starts delivering flawed parts, the first step should be to ex-plore possible root causes. This approach helps in identifying any recent changes in the supplier's production processes, materials, or workforce that might be contributing to the quality issues. By understanding the root cause, the supply manager can work with the supplier to implement correc-tive actions, ensuring long-term solutions rather than temporary fixes. This collaborative approach also maintains a good relationship with the supplier and encourages continuous improvement. Reference:

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

* Burt, D. N., Petcavag

Question 4

XYZ Company engages a freight bureau to conduct an audit of its freight forwarder. How can XYZ BEST utilize the information obtained from this review?

AAssess the freight forwarder's staffing needs

BConfirm adherence to regulations and industry standards

CAchieve cost savings on future freight invoices

DIdentify instances where the freight forwarder violated XYZ's policies

Answer : C

Achieving cost savings on future freight invoices is the best use of audit information from a freight bureau. By analyzing freight costs and identifying discrepancies or inefficiencies, XYZ can negotiate better terms or optimize its logistics strategy.

Question 5

Which of the following are the quickest ways to ship food products in order to ensure they do not spoil?

AMotor carriage and rail

BWater and motor carriage

CAir freight and rail

DAir freight and motor carriage

Answer : D

Air freight and motor carriage are the quickest ways to ship food products, ensuring that perishable items reach their destination rapidly to prevent spoilage. Air freight offers fast transit, while motor carriage provides flexible last-mile delivery.

Question 6

A specialized sewing shop quilts fabrics for use in upholstered furniture. Various patterns are produced on different machines, each of which has its own set-up routine. At times, one type of machine is idle while others are backed up. The sewing floor supervisor finds new software which makes the machines' patterns interchangeable. Which of the following is the MOST likely result of upgrading to the new software?

ADecreased cycle time and increased set up costs

BIncreased productivity and decreased cycle time

CIncreased equipment costs and reduced inventory

DReduced inventory and increased productivity

Answer : A

The buyer should be most concerned about the risks associated with the shipping terms, especially as they take possession once the goods are loaded. This includes potential liabilities and loss during transit. Understanding these risks is critical for mitigating potential issues. Reference: Incoterms 2020 by ICC.

Question 7

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

Arisk analysis

Bcost analysis

CC spend analysis

Dmarket analysis

Answer : D

A market analysis best describes the study conducted by a cross-functional team to evaluate the feasibility of a new product line. This analysis assesses market demand, competition, and potential profitability, providing insights necessary for decision-making. Reference: Product development and market research methodologies.

ISM Supply Management Integration INTE Exam Practice Test