Question 1

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?

Options :

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

Answer: A

Question 2

Which of the following describes a market structure where there are few sellers and many buyers and where price is controlled by either an industry leader or a cartel?

Options :

A : Monopsony

B : Perfect competition

C : Monopoly

D : Oligopoly

Answer: D

Question 3

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 4

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

Options :

A : 60

B : 100

C : 45

D : 30

Answer: C

Question 5

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?

Options :

A : Average demand during lead-time

B : Service level

C : Stock-out risk

D : Re-order point

Answer: C