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ISM Supply Management Integration Sample Questions (Q160-Q165):
NEW QUESTION # 160
Which of the following BEST explains why forecast accuracy is important in contracts with suppliers?
- A. It 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.
- C. It improves continuity of supply while allowing the supplier to reduce costs over time.
- D. It allows the organization more freedom in procuring supply in the market.
Answer: C
Explanation:
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.
NEW QUESTION # 161
Which of the following refers to the percentage of order requirements met through stock that is present on the shelf?
- A. Inventory turnover
- B. Fill rate
- C. Lead time
- D. Buffer stock
Answer: B
NEW QUESTION # 162
When an organization is devising a long-term forecast, consulting external sources of information is MOST useful
- A. for setting realistic organizational goals
- B. for benchmarking a specific competitor
- C. in gathering market intelligence
- D. in eliminating irrelevant data
Answer: C
Explanation:
Consulting external sources is crucial for gathering market intelligence when devising long-term forecasts.
This information helps organizations understand market trends, customer behavior, and competitive landscapes, enabling more accurate and strategic planning.
NEW QUESTION # 163
During an inventory review, a supply manager confirms that parts used for the maintenance of equipment sold during the previous year are still being stored in the warehouse. These parts cannot be used on current equipment. Which of the following BEST describes these parts'
- A. Surplus
- B. Obsolete
- C. Excess
- D. Expired
Answer: B
Explanation:
Parts that were used for maintenance of equipment sold in the previous year but cannot be used on current equipment are best described as obsolete. Obsolete inventory refers to items that are no longer usable or saleable due to advancements in technology or changes in market demand. These parts should be identified and removed from active inventory to free up space and reduce carrying costs. References:
*Heizer, J., Render, B., & Munson, C. (2017). Operations Management: Sustainability and Supply Chain Management. Pearson.
*Chopra, S., & Meindl, P. (2015). Supply Chain Management: Strategy, Planning, and Op-eration. Pearson.
NEW QUESTION # 164
An ERP purchasing module indicates a gross requirement of 100 units for part number A123. There is an open purchase order for 55 units. The item master for this supplier shows an order lot size of 30 units each. In this situation, how many units of this part will the exception report indicate should be ordered7
Answer: B
Explanation:
With a gross requirement of 100 units and an open order for 55 units, 45 additional units are needed. Given the lot size of 30 units, the exception report would indicate ordering 45 units to meet the requirements.
NEW QUESTION # 165
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