Question 1

DEF, Inc. is in the ramp-up phase of a unique medical device. The device has a two-year life expectancy. The sales forecast for the ramp-up period is as follows MonthJulAugSepOctNovDecJanFeb

Unit Sales1001502006001,4002,2004,00010,000

Demand after February is expected to remain at 10,000 units per month for several months, then decrease

gradually. The units are small, and thus maintaining an inventory of up to 10,000 units is possible.

There are only three suppliers capable of providing the specialized component critical to this product. The

production capacities of these suppliers are as follows:

•Supplier X has a capacity of 500 units per month at a cost of S20 per unit, representing 80% of its total

business

•Supplier Y has a capacity of 2,000 units per month at a cost of S2O.5O per unit, representing 50% of its total

business

•Supplier Z has a capacity of 20,000 units per month at a cost of $20.70 per unit, representing 10% of its total

business

Two of these companies—Supplier X and Supplier Y—are minority businesses.

Given this situation, DEF should contract with

Options :

A : Supplier Z only, as it can best fulfill the forecasted demand

B :

all three companies in a tiered system, with up to 40% from Supplier X and Y-s total monthly business, and the remainder going to Supplier Z

C : Suppliers X and Y, and work with them to increase their production capability

D :

all three companies in a tiered system, with up to 5,000 units from Supplier X, 20,000 units from Supplier Y, and the remainder from Supplier Z

Answer: B

Question 2

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?

Options :

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

Answer: B

Question 3

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

Options :

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

Answer: D

Question 4

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?

Options :

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

Answer: C

Question 5

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?

Options :

A :

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

B :

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

C : Requiring suppliers to verify that sustainability metrics for various programs are closely monitored

D : Working with engineering and suppliers to develop new product designs

Answer: A

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