ISM INTE Exam Questions Instant Access - No Installation Required

Question 1

A supply manager is analyzing potential costs associated with the raw materials needed for a new product launch. Tooling costs are known, but the range of forecasts for future sales---and therefore demand for materials-varies widely. Given these circumstances, the supply manager should consider using which of the following?

AData mining

BDecision tree

CAnalysis of variance

DCritical path

Answer : B

A decision tree is an effective tool for evaluating potential costs and benefits under conditions of uncertainty, such as varying forecasts for future sales. It allows the supply manager to visually map out different decision paths and their associated costs, probabilities, and outcomes. This helps in comparing different scenarios and making informed decisions about the raw materials needed for a new product launch. Decision trees are particularly useful in situations with multiple possible outcomes and complex decisions. Reference:

* Clemen, R. T., & Reilly, T. (2013). Making Hard Decisions with DecisionTools. Cengage Learning.

* Heizer, J., Render, B., & Munson, C. (2017). Operations Management: Sustainability and Supply Chain Management. Pearson.

Question 2

A manufacturer of gas-powered motors realigns its supply chain to fit a new business segment. In the past, the firm focused on customized designs. Now, it wishes to compete in the electric motor market, which is highly competitive and price-sensitive. Given this situation, which of the following will ensure that the firm has the proper planning in place?

ANegotiating prices with suppliers with a focus on total cost of ownership models, to minimize inventory and logistics costs

BWorking with engineering to ensure the inclusion of customizable product and service features, in order to meet customer demands

CRequiring suppliers to verify that sustainability metrics for various programs are closely monitored

DWorking with engineering and suppliers to develop new product designs

Answer : A

In a price-sensitive and competitive market, focusing on total cost of ownership is critical. By negotiating with suppliers to minimize inventory and logistics costs, the firm can better control expenses and remain competitive. This approach ensures proper supply chain alignment with the new market segment's demands.

Question 3

Through cycle counting, a supply manager learns that inventory inaccuracies are being caused by errors made when received goods are entered into the company's enterprise business system. Which of the following is the FIRST course of action the supply manager should take to reduce these inaccuracies?

ADetermine how the KPIs for receiving accuracy are being measured, and if there is a disconnect between the KPIs and the cycle count data

BReview the warehouse personnel training materials to determine if there are any deficiencies, and develop a plan for making the necessary corrections

CForm a process improvement team using quality management techniques to determine the cause of the errors and make recommendations for their elimination

DImplement verification steps as data are entered into the system, and review available data to determine the scope and depth of the issue

Answer : C

Forming a process improvement team using quality management techniques is the first course of action. This team can analyze the root causes of errors in data entry, using systematic methods to identify and eliminate inaccuracies, thereby improving the accuracy of inventory records.

Question 4

Which of the following refers to a computer-based system that determines the purchase requisition requirements that go into the manufacture of end items, and addresses an organization's operational, financial and marketing strategies?

AElectronic data interchange (EDI)

BMaterial requirements planning (MRP)

CDistribution requirements planning (DRP)

DManufacturing resource planning (MRP II)

Answer : D

MRP II is a computer-based system that integrates operational, financial, and marketing strategies, expanding beyond material requirements planning (MRP) to include broader resource planning and management. Reference: MRP II frameworks are essential for aligning production with organizational objectives and market demands.

Question 5

For many years, WXY Company's policy has been to buy only domestically manufactured MRO materials and maintain quantities of these materials at each operating location. A recent analysis reveals that this practice is not the most efficient and effective way for this firm to manage its MRO purchases. Given this situation, which of the following is the BEST course of action for WXY's supply management department to take?

ACreate a cross-functional team of stakeholders to determine future actions

BCentralize its inventory into one location to reduce overall storage costs

COutsource the inventory fulfillment to a lower cost third party

DDetermine what supplier can deliver the best value, and contract with that supplier

Answer : A

Forming a cross-functional team ensures diverse perspectives and expertise in decision-making, leading to well-rounded strategies for managing MRO materials more efficiently. It fosters collaboration and alignment across departments. Reference: Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management.

Question 6

Which of the following forecasting methods is regarded as participatory7

AExponential smoothing

BBox-Jenkins

CSales force composite

DMarket research

Answer : C

The sales force composite method is participatory, involving input from the sales team who provide forecasts based on their knowledge of customer needs and market trends. This method leverages the insights of those directly engaged with customers, enhancing the accuracy of demand forecasts.

Question 7

An organization purchases material from several countries. These materials are assembled into products and sold in several other countries. This firm's product specifications will MOST likely reference

AInternational standards

BIncoterms 2010 rules

CNorth American Free Trade Act

Dexchange rates

Answer : A

For a firm purchasing and selling products internationally, referencing international standards ensures compatibility, quality, and compliance across different markets. This practice facilitates global trade and meets regulatory requirements. Reference: International standards (e.g., ISO) are critical in maintaining consistency and reliability in global supply chains.

ISM Supply Management Integration INTE Exam Questions