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Question # 4

A utility installation company conducts an annual review of its assets. Included with its equipment are several trenching machines that were purchased three years ago at a cost of $85,000 each. How should this value be categorized in the asset management system?

A.

Equity

B.

Book

C.

Market

D.

Historic

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Question # 5

A supply manager learns that parts used in manufacturing are arriving scratched and must be polished before use, thereby hampering production. Sending the parts back to the supplier is not an option, as they are needed to meet increased demand. Which of the following will be MOST helpful in resolving this problem?

A.

Acceptance/rejection history

B.

Process control

C.

Corrective action plan

D.

Supplier certification

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Question # 6

To ensure items frequently employed in production are immediately available for Kanban replenishment, a storage location is established specifically for these items. This inventory location is known as a(n)

A.

overflow location

B.

random location

C.

point-of-use location

D.

fixed location

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Question # 7

A supply manager is seeking to align the procurement function with the organization's business strategy and growth potential. Which of the following is the BEST initial course of action to take in this instance7

A.

Schedule a meeting with each functional area to learn about their procurement requirements

B.

Consult with accounting to obtain information on the financial relationships with each current supplier

C.

Develop a recommendation on procurement activities and the necessary interactions with external stakeholders

D.

Review current procurement activities and assess if they are strategic or tactical and how they contribute value

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Question # 8

Which of the following will be MOST useful for measuring service quality?

A.

Invoice procedures

B.

Fitness for purpose

C.

Warranty response

D.

Accurate documentation

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Question # 9

Which of the following requires investment recovery action’

A.

Finished goods

B.

Work-in-process

C.

Raw materials

D.

Slow-moving materials

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Question # 10

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.

Excess

C.

Obsolete

D.

Expired

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Question # 11

A supply manager is tasked with assisting internal customers in refining their budgets and planning future sourcing. The supply manager works with the firm's marketing director on a budget which includes a large direct mail campaign and the revision of promotional materials for several products.

Six months later, marketing has nearly exhausted the budget due to cost increases in paper and printing, even though the marketing campaign's scope has not changed. Which of the following did the supply manager and marketing director fail to consider?

A.

Ongoing project monitoring

B.

Comparison of actual results with established goals

C.

Alignment of departmental priorities with those of the parent organization

D.

Use of pricing data to forecast trends

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Question # 12

A supply manager is reviewing safety stock for a particular unit. The unit is small, Inexpensive, non-perishable, and easily stored, but is critical to the firm's manufacturing process. The following information is known about this unit:

Maximum lead time = 8 Days

Average lead time = 3 Days

Maximum daily usage = 6,000 Units

Average daily usage = 4,000 Units

What is the maximum safety stock that should be maintained for this unit?

A.

12,000

B.

10,000

C.

36,000

D.

48,000

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Question # 13

MNO, Inc. operates within a volatile industry in which unforeseen demand and events often result in unreliable forecasts. Which of the following is the BEST way for MNO to generate better information about demand and improve forecast accuracy?

A.

Improve fill rate

B.

Increase collaboration with downstream customers

C.

Focus on the organization's key competencies

D.

Increase inventory quantities

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Question # 14

If a shipment has a gross weight of 500 pounds and overall dimensions of 42 inches x 48 inches x 48 inches, what is the density of the shipment (in pounds per cubic foot)?

A.

0.744

B.

0.005

C.

8.9

D.

5.0

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Question # 15

A supply manager negotiates a volume discount with a key supplier. The supplier will provide a discount on screws, bolts, and nuts, based on the quantity indicated on the purchase order (PO). Which of the following would be the BEST way for the buying firm to maximize the benefits of this discount?

A.

Raise the reorder point on these items so that the firm can take the advantage of the volume discount arrangement

B.

Communicate the volume discount arrangement to the engineering department so that the firm can consume these items in greater quantities

C.

Set up the fixed order quantity on these items to ensure that each purchase order issued will meet the required quantity for the volume discount

D.

Lower the reorder point on these items so that the firm can take the advantage of the volume discount arrangement

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Question # 16

At the beginning of each year, a large firm’s indirect procurement organization holds a brainstorming session. These sessions produce many great ideas and foster support among the procurement team. However, after a few years, support for the brainstorming sessions begins to diminish, and the projects discussed are pushed aside in order to deal with more pressing issues. In this situation, which of the following would be the BEST course of action to take?

A.

Discontinue the brainstorming sessions and urge employees to make improvements within their areas of responsibility as they see opportunities arise

B.

Ask other functional areas to suggest improvement projects, and dedicate resources to support these initiatives

C.

Create a center of excellence with select managers committed to implementing the ideas discussed in the brainstorming sessions

D.

Assign functional project managers to work on the brainstorming project

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Question # 17

XYZ, Inc. notices that one of its suppliers has been failing to achieve on-time delivery, even though XYZ sends it a 6-month projected order forecast every month. The supplier claims that it takes nine months to receive important raw materials, and that this causes the poor delivery performance. Nevertheless, XYZ must continue purchasing from this supplier, as it is a sole supplier. Given this situation, which of following is the BEST course of action for XYZ to take?

A.

Send the 6-month forecast data weekly instead of monthly to the supplier, and request it purchase raw materials based on the projections

B.

Request that the supplier submit an open order report on a weekly basis with details on the latest shipment status

C.

Discuss the issue with engineering to determine if the firm can use different raw materials to manufacture the product

D.

Extend the forecast timeline from six months to one year, and request the supplier purchase raw materials based on the projections

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Question # 18

A company finds that tracking demand for products sold at its retail outlets makes forecasting a challenge. Which of the following would be MOST useful in providing rapid updates when dealing with suppliers?

A.

Regression analysis of future sales

B.

Safety stock review

C.

Point-of-sale system

D.

Probability modeling

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Question # 19

A supply manager is part of a ramp-up team for a new product line. The supply manager's role will include finding and evaluating new sources and obtaining commitments to support the volume projected by marketing. In recent campaigns, sales forecasts have been considerably higher than actual demand, and the supply manager wants to minimize the risk of such a situation happening again. Which of the following arguments made by the supply manager will MOST likely influence the team to re-examine product launch expectations?

A.

"Supplier quality problems could mean the company misses the critical time-to-market window."

B.

"The company may experience involuntary down time if suppliers cannot keep up with production needs."

C.

"Cost overruns on unfamiliar materials might cause suppliers to raise prices. ’

D.

"An overly optimistic forecast may result in costly excess inventory and obligations."

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Question # 20

A supplier of aircraft seating receives a forecast from a major aircraft manufacturer. The forecast information is considered confidential, and thus the supplier must sign a Non-Disclosure Agreement (NDA). Given this situation, which of the following is MOST likely to be protected by the NDA?

A.

The time frame expected for completion

B.

The start date of the project

C.

The number of aircraft anticipated to be built

D.

The name of the end customer submitting the request for bid

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Question # 21

A firm sells an average of 2,000 units of snacks from its existing stock while it waits for orders to be delivered. Demand during lead time varies in accordance with a normal distribution. The firm's supply manager prepares a presentation to explain the concept of customer service and safety stock levels using the following figure:

What does the shaded area D (in red) represent?

A.

Average demand during lead-time

B.

Service level

C.

Stock-out risk

D.

Re-order point

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Question # 22

Which of the following is the GREATEST advantage of using component standardization in product design?

A.

Increasing the potential supply base for the standardized components

B.

Leveraging volume and simplifying new product development

C.

Reducing component costs and forecast complexity

D.

Reducing the effort required to maintain the supply chain

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Question # 23

A firm collects the following forecasted and actual demand for a certain part:

PeriodForecastActual

KI30311

22531

32826

42520

What is the absolute value of the forecast error?

A.

10

B.

Cannot be determined from above information

C.

14;

D.

0

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Question # 24

An organization purchases materials beyond current and anticipated requirements in expectation of a price increase or shortage, in the hope that it will profit from the sale of the materials at a later date. This describes which of the following buying strategies?

A.

Consignment

B.

Forward

C.

Speculative

D.

Spot

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Question # 25

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.

Collaborative planning, forecasting and replenishment

C.

Sales and operations planning

D.

Enterprise resource planning

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Question # 26

Which of the following is a key requirement of xRP7

A.

Data integrity

B.

Supplier consolidation

C.

Smoothing algorithms

D.

Should-cost data

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Question # 27

A manufacturer is concerned that excess packaging materials used for a product will send the wrong message to consumers who may have selected the product based on its sustainable design. How can supply management positively impact this situation?

A.

Verify that recyclable packaging materials are properly coded for sorting

B.

Work with product development to ensure sustainable packaging is developed

C.

Include a notice with the product explaining that the packaging is recyclable

D.

Increase the amount of shrink-wrap packaging

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Question # 28

When an organization is devising a long-term forecast, consulting external sources of information is MOST useful

A.

for setting realistic organizational goals

B.

in gathering market intelligence

C.

in eliminating irrelevant data

D.

for benchmarking a specific competitor

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Question # 29

A supply manager is tasked with creating a business continuity plan in the event of natural disasters. The firm is most concerned with understanding the impacts and consequences of events. Which of the following steps of a business continuity plan should be the PRIMARY focus of the supply manager?

A.

Disruption assessment

B.

Mitigation plan

C.

Execution plan

D.

Disruption scanning

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Question # 30

A manufacturing firm prepares the following materials requirement plan (MRP):

Master Production Schedule

Week123456

Item A101015152020

Relevant Information

ItemItem's ParentItem's Lead TimeItem's Lot SizeItem's Current Inventory

ANone1 weekLFL50

BA2 weeks5010

CB2 weeks5010

Using MRP methodology, how much of Item B should be ordered, and when should it be ordered7

A.

50 items immediately and 50 items in week 3

B.

20 items in week 4 and 20 items in week 5

C.

10 items in week 2 and 20 items in week 3

D.

50 items in week 2

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Question # 31

A firm needs to provide raw materials to accommodate a recent increase in manufacturing production. The supply manager uses the material forecast from the material requirements planning (MRP) software and the storage capacity from the warehouse management system (WMS) to forecast the firm's requirements. Which of the following will impact this forecast MOST significantly?

A.

Validation of data by supply management

B.

The type of planning system used

C.

The interface between the MRP software and the WMS

D.

Accounting for storage of works in progress

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Question # 32

A manufacturer is working to standardize high-volume, low-cost hardware components used in its assembly process. The manufacturer wants to transfer some of the risks associated with inventory carrying costs, warehousing costs, and re-stocking costs to the supplier. Which of the following will be MOST useful in accomplishing this goal?

A.

Vendor-managed inventory

B.

Reorder-point system

C.

Safety stock

D.

Kanban

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Question # 33

Which of the following refers to a procedure whereby data are collected and compared to requirements in order to make an acceptance decision?

A.

Process mapping

B.

Inspection

C.

Internal audit

D.

Peer review

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Question # 34

A manufacturer must work to reduce cost of goods sold (COGS) to achieve profit objectives and remain competitive in a tight market. The manufacturer has long standing relationships with its main suppliers and a strong supply management department that conducts periodic reviews with the suppliers. Nevertheless, the manufacturer is not hitting targets. Which of the following is the BEST course of action for supply management to undertake in order to initiate improvements?

A.

Continue to operate as usual, as manufacturing and operations must focus on labor cost reduction to best impact COGS

B.

Conduct a workshop with suppliers and internal stakeholders, focusing on sustainable improvements and goal alignment

C.

Demand each supplier provide price concessions regardless of contract terms, as it is a tight market

D.

Retender the contracts representing the main cost drivers in order to maximize COGS reduction

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Question # 35

Based on the global reach and complexity of supply chains, resiliency planning and risk assessment are necessary because of which of the following’

A.

Supplier bankruptcies in competitive markets

B.

Natural and man-made disasters

C.

Lack of training within the organization

D.

Uncollected receivables

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Question # 36

A retailer of high-value consumer electronics experiences a significant increase in theft within its forward and reverse logistics operations, both of which are subcontracted to third parties. Which of the following is the FIRST course of action the retailer should undertake in order to mitigate loss within the subcontractors' chain of custody?

A.

Redesign product packaging to add tamper proof capabilities

B.

Invest in a Transportation Management System in order to track the movement of products in real time

C.

Invest in radio-frequency identification (RFID) technology, in order to track inventory within the entire supply chain

D.

Assess internal process flow diagrams and those of the subcontractors to identify areas where risk of loss can occur

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Question # 37

A well-established retailer of consumer goods has earned a reputation for providing high quality merchandise at competitive prices. In recent years, however, the retailer has experienced a steady decline in sales within its stores. Which of the following is the BEST course of action for the retailer to take?

A.

Perform an industry benchmark analysis to better gauge performance against that of similar retailers within the marketplace

B.

Invest in promotional offerings in order to boost sales

C.

Implement revisions to its sales forecasting methodology with the goal of improving inventory turns

D.

Conduct an economic and market analysis to better understand trends occurring within the industry

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Question # 38

BCD Manufacturing's products have very high velocity. Accordingly, the firm is redesigning its warehouse to accommodate additionalimplement a system that

will allow its products to be stored in flexible locations, due to the high demand of different SKUs. This strategy should also allow the orgfeization to improve warehouse efficiency. In this situation, which of the following types of storage strategies should BCD employ?

A.

Overflow locations

B.

Fixed item locations

C.

Floating locations

D.

Point-of-use locations

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Question # 39

A manufacturing firm is preparing a materials requirement plan for the next six weeks. The information is as follows:

Master Production Schedule

Week123456

Item A51015202530

Other Relevant Information

ItemItem's ParentItem's Lead TimeItem's Lot SizeItem's Current Inventory

ANone1 weekLFL20

BA2 weeks105

CB3 weeks205

How many levels does the product structure have in the bill of materials?

A.

1

B.

2

C.

0

D.

3

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Question # 40

Identifying risks is MOST associated with which of the following stages of a project?

A.

Executing

B.

Monitoring and Controlling

C.

Initiating

D.

Planning

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Question # 41

Over the past 90 days, a buying company's manufacturing engineers have reported an increase in the number of defective parts received from a key supplier. The engineers report that there are three different types of defects occurring, and that they are all being discovered during production. The supplier states that it does not have enough resources to assess the root cause of the three types of defects all at one time. Which of the following should the buying firm do in this instance?

A.

Work with engineering to determine the impact each defect type has on the customer base and assist the supplier in prioritizing and solving the defect type with the highest customer impact first

B.

Calculate the number of times each of the defect types have occurred over the past 90 days, and instruct the supplier to work on finding the root cause of the defect with the highest frequency

C.

Calculate the number of times each of the defect types have occurred over the past two weeks, and instruct the supplier to work on finding the root cause of the defect with the highest frequency

D.

Work with engineering to submit three corrective action requests and ask the supplier to address all three

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Question # 42

Which of the following refers to the practice of buying a commodity on the open market for immediate delivery?

A.

Hedging

B.

C.

D.

Answer:

E.

Forward buying

F.

Spot buying

G.

Speculative buying

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Question # 43

A manufacturer of gardening products has many international suppliers. Because of extended lead-times and logistical concerns, it is critical that the company provides accurate seasonal demand planning data to its suppliers. Given this situation, which of the following types of feedback from the supplier would be MOST critical to the manufacturer?

A.

Price increases on key components

B.

Anticipated production schedules and capacity planning

C.

Notification of any constraints to meeting demands

D.

Planned delivery schedules

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Question # 44

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

A.

60

B.

100

C.

45

D.

30

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Question # 45

Selection of a supplier takes place during which of the following phases of the project management process?

A.

Project planning

B.

Project initiation

C.

Project monitoring and control

D.

Project execution

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Question # 46

Which of the following refers to the percentage of order requirements met through stock that is present on the shelf?

A.

Fill rate

B.

Lead time

C.

Inventory turnover

D.

Buffer stock

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Question # 47

A supply manager for JKL, Inc. is negotiating a contract with a supplier of a component. The component will be used in a new product JKL Is manufacturing and plans to bring to market early next year. Which of the following will be the MOST important provision for the supply manager to negotiate for?

A.

A fixed cost of raw materials that will remain stable over the following year

B.

A low minimum order quantity that allows flexibility to buy additional materials

C.

A sustainable packaging solution with recyclable transport crating

D.

Ownership of the molds and dies used to manufacture the component

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Question # 48

The packaging optimization process begins by understanding which of the following?

A.

Product characteristics

B.

Packaging density

C.

Transportation modes

D.

Packaging budget

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Question # 49

A company introduces a new product line. Although the line is selling well, profit margins are barely at the break-even point. In this situation, which of the following is MOST likely to improve profit margins’

A.

Conduct an analysis of all cost factors, including labor and overhead, to identify possible savings

B.

Determine whether in-house production of the components would be more economical

C.

Negotiate more favorable pricing with suppliers, using the promise of future business if the new line succeeds

D.

Research prices for similar products in the marketplace to determine if the company can raise its prices

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Question # 50

An organization has a forecast for June of 125 units. However, 140 units actually sell. What is the exponential smoothing forecast for July if the alpha is 0.2?

A.

137 units

B.

130 units

C.

53 units

D.

128 units

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