ISM INTE Exam Practice Test Instant Access

Question 1

A manufacturer is updating its production plans for the remainder of the year. The firm has already obtained revised needs information from its customers, as well as the finance and sales teams. Which of the following additional information would be MOST useful to the firm?

AUpcoming promotions from the marketing team

BRecent production issues from the quality team

CProduct modifications from the design team

DCorporate goals from the management team

Answer : A

Marketing promotions significantly impact demand forecasts and production planning. Understanding future promotions allows better alignment of production schedules with expected sales spikes. Reference: Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation.

Question 2

Which of the following is the FIRST stage in the Retail Event Collaboration Process Overview (VICS CPFR Model)?

AExecution

BStrategy and planning

CAnalysis

DDemand and supply management

Answer : B

In the VICS CPFR model, the first stage is strategy and planning, which involves establishing the collaboration framework and defining the scope of the partnership. This stage sets the foundation for subsequent processes. Reference: CPFR (Collaborative Planning, Forecasting, and Replenishment) guidelines emphasize starting with strategic alignment.

Question 3

Which of the following BEST explains why forecast accuracy is important in contracts with suppliers?

AIt locks in the lowest possible cost to the organization over the life of the contract.

B. It allows the buying firm to gauge supplier performance degradation over the life of the contract.

CIt improves continuity of supply while allowing the supplier to reduce costs over time.

DIt allows the organization more freedom in procuring supply in the market.

Answer : C

Accurate forecasts enable suppliers to optimize production and inventory levels, reducing costs and enhancing supply reliability. This mutual benefit strengthens supplier relationships. Reference: Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management.

Question 4

A firm engaging in low-cost country sourcing wants to assume the least amount of risk when importing goods into its own country. Which of the following Incoterms 2020 rules would be MOST useful in achieving this goal7

ACFR

BCPT

CEXW

DDAP

Answer : D

In the context of low-cost country sourcing and minimizing risk when importing goods, the selection of appropriate Incoterms 2020 rules is crucial.

DAP (Delivered at Place) is the most suitable Incoterm for a firm wanting to assume the least amount of risk. Under DAP, the seller is responsible for all costs and risks associated with delivering the goods to a specified destination, which includes transportation, export customs clearance, and any other logistical arrangements until the goods are made available for unloading at the buyer's location. This significantly reduces the buyer's risk as the seller handles most of the transportation and logistics.

Other Incoterms, such as:

CFR (Cost and Freight): The seller pays for the cost and freight to bring the goods to the port of destination. However, the risk is transferred to the buyer once the goods are loaded on the vessel.

CPT (Carriage Paid To): Similar to CFR, but can be used for any mode of transport. The seller covers transport costs to a specified destination, but the risk transfers to the buyer upon handing over the goods to the first carrier.

EXW (Ex Works): The buyer assumes all risks and costs from the seller's premises onward, making it the highest risk for the buyer.

Incoterms 2020 by the International Chamber of Commerce (ICC)

'A Guide to Incoterms 2020' by the International Trade Centre (ITC)

Question 5

Material accumulated for a well-defined future need is called

Abuffer stock

Bcontinuous inventory

Canticipation inventory

Dsafety stock

Answer : C

Anticipation inventory refers to stock that is accumulated in advance of expected demand increases, such as seasonal spikes or promotions. This type of inventory helps companies manage supply chain fluctuations and maintain smooth operations. Reference: Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation.

Question 6

Which of the following is the MOST important reason for establishing and maintaining a supplier quality certification program?

AQuality champions from both the buyer and seller will have better opportunities to communicate.

BSupplier payments should be closely tied to maintaining quality standards.

CA supplier quality certification program is necessary for the development of a supplier scorecard.

DCertification programs keep suppliers focused on quality elements important to the customer.

Answer : D

The primary reason for establishing a supplier quality certification program is to ensure that suppliers maintain a focus on quality elements important to the customer. This continuous emphasis on quality helps in maintaining high standards and reduces defects or inconsistencies in supplied materials. Reference: Supplier quality management best practices.

Question 7

The supply manager for a semiconductor company receives an emergency phone call from the firm's factory manager, who states that the manufacturing equipment is down and that a replacement part is needed as soon as possible. The supply manager checks the stock for this part but finds nothing. In this situation, the supply manager should do which of the following?

AAsk the factory manager to perform an equipment failure analysis in order to understand the root cause of the equipment failure

BPerform a cost analysis to examine if it is better to expedite the part or wait for the part's scheduled arrival date

CContact the equipment supplier and ask it to coordinate an expedited delivery of the part as soon as possible

DVerify with the warehouse manager if there is an extra spare part in stock that was not correctly registered in the stock database system

Answer : C

In urgent situations, expediting replacement parts minimizes downtime and maintains production flow. Direct communication with the supplier is critical for fast resolution. Reference: Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2013). Supply Chain Logistics Management.

ISM INTE Supply Management Integration Exam Practice Test