PDF (New 2025) Actual ISM INTE Exam Questions
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NEW QUESTION # 77
Analysis of inventory turnover is generally considered part of what status assessment ratio?
- A. Debt-to-equity
- B. Working capital
- C. Operating expense
- D. Financial efficiency
Answer: D
Explanation:
Inventory turnover analysis is part of assessing financial efficiency. It measures how effectively a company uses its inventory and resources, indicating how well inventory is managed relative to sales, thus reflecting operational efficiency.
NEW QUESTION # 78
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. Lack of training within the organization
- C. Uncollected receivables
- D. Natural and man-made disasters
Answer: D
Explanation:
Resiliency planning and risk assessment in global supply chains are critical due to the potential impact of natural and man-made disasters. These events can disrupt operations, affecting logistics, supply continuity, and financial performance. Effective risk management strategies mitigate such disruptions, ensuring supply chain stability.
NEW QUESTION # 79
A firm has created the following process flow diagrams depicting two possible strategies for the production of a new product line. The triangles represent inventory, and the rectangles represent processing. Each of the two options start with the same raw materials, and both create the product through two stages of processing.
Which of the following statements is correct?
- A. Option A's product is customizable for customers.
- B. Option A's product will be equally as expensive to make as Option B's.
- C. Option B's product is an example of delayed differentiation.
- D. Option B's customers are likely to wait longer before receiving the product.
Answer: C
Explanation:
Option B's process flow indicates that the final inventory (triangle) occurs after the second processing stage, suggesting a strategy of delayed differentiation. This approach allows customization or final product adjustments to occur closer to the point of customer delivery, reducing lead time for specific customer requirements and minimizing excess inventory of finished goods. Reference: Lean manufacturing and supply chain strategies.
NEW QUESTION # 80
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 submit three corrective action requests and ask the supplier to address all three
- B. 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
- C. 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
- D. 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
Answer: D
Explanation:
Working with engineering to assess the impact of each defect type on customers helps prioritize corrective actions effectively. Addressing the defect with the highest customer impact first ensures that resources are focused on the most critical issues, improving product quality and customer satisfaction.
NEW QUESTION # 81
A firm wants to contract with two suppliers to develop a cellphone tower servicing five million customers. The new technology is required within the next 36 months and has a large budget. The following suppliers are under consideration:
*Supplier A - Has been in business for 20 years; however, every two to three years, its labor force goes on strike
*Supplier B - An established business located in an overseas country which may charge an additional 2% duty on some imported goods
*Supplier C - An established business which has been closed on recent occasions by governing authorities due to health and safety violations
*Supplier D - Has the smallest facilities and workforce of the four, but will be expanding over the next three months and has successfully subcontracted work in order to meet timelines Based on this information, which two suppliers offer the BEST capacity and capability?
- A. Suppliers C and D
- B. Suppliers B and D
- C. Suppliers A and C
- D. Suppliers A and B
Answer: B
Explanation:
Suppliers B and D offer the best capacity and capability for the project. Supplier B is established and can handle large budgets, despite potential duties, while Supplier D is expanding and has a successful track record of subcontracting to meet deadlines. These factors make them the most reliable choices for meeting the project's requirements within the 36-month timeline. Reference: Supplier selection criteria in supply chain management.
NEW QUESTION # 82
A sourcing manager needs to outsource production in order to meet demand for a specific product. The internal production schedule and forecasted sales have been provided for the next nine months. Internal production follows a level schedule of 4,000 units per month and up to 7,000 units may be stored in inventory.
There is no beginning inventory for January. During what month(s) will outsourced production be required to meet forecasted sales?
MonthJanFebMarAprMayJunJulAugSep
Unit Sales3,0003,0004,0001,0009,0005,0004,0003,0005,000
- A. July only
- B. June, July and September
- C. May, June and September
- D. June only
Answer: C
Explanation:
Outsourcing is required in May, June, and September to meet sales forecasts. Internal production is capped at
4,000 units per month, and inventory can buffer only up to 7,000 units. The high sales months exceed these capacities, necessitating additional outsourcing.
NEW QUESTION # 83
Which of the following is the MOST important reason for establishing and maintaining a supplier quality certification program?
- A. Supplier payments should be closely tied to maintaining quality standards.
- B. Certification programs keep suppliers focused on quality elements important to the customer.
- C. A supplier quality certification program is necessary for the development of a supplier scorecard.
- D. Quality champions from both the buyer and seller will have better opportunities to communicate.
Answer: B
Explanation:
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.
NEW QUESTION # 84
Which of the following buying strategies refers to planning inbound material purchases and flows without the need for significant inventory levels7
- A. Spot buying
- B. Hedging
- C. Forward buying
- D. Buying to requirements
Answer: D
Explanation:
Buying to requirements involves planning purchases based on actual needs, minimizing inventory levels. This strategy supports lean inventory practices and reduces carrying costs, aligning procurement with just-in-time principles to enhance efficiency and responsiveness in supply chain operations.
NEW QUESTION # 85
A supply manager receives four bids for a special piece of equipment. The equipment is large and does not fit into a normal sea container. The bids are as follows:
Supplier 1Supplier 2Supplier 3Supplier 4
Bid$2,110,000$2,105,000$2,110,000$2,115,000
Incoterms 2020 RuleGIFDPUFCAFAS
The costs of transportation, included within each bid price, are as follows:
Responsibility for Payment to CarrierTransfer of Risk to BuyerCost of Transportation Supplier, before goods are loaded onto vessel: purchaser thereafterAlongside vessel nominated by purchaser$50,000 Supplier to named port of destination: purchaser thereafterOnce goods have been loaded onto the vessel$55,000 Supplier to named place of destination once unloaded: purchaser thereafterOnce goods have been unloaded at named place of destination540,000 PurchaserWhere goods are loaded onto the collecting vehicle$30,000 The supply manager has taken account the firm's risk profile and wishes to use FCA for its Incoterms 2020 rules. Adjusting the pricing in the tenders to reflect this, which supplier should be awarded the contract (based on the lowest price)?
- A. Supplier 2
- B. Supplier 3
- C. Supplier 4
- D. Supplier 1
Answer: B
Explanation:
Using FCA Incoterms means the buyer assumes responsibility at the point where goods are loaded onto the transport. Adjusting for transportation costs, Supplier 3, with a lower base bid price and assuming buyer's responsibility earlier, results in the lowest adjusted total cost. This selection balances cost and risk, aligning with the buyer's preferred Incoterm.
NEW QUESTION # 86 
There are 10,000 units in stock for the beginning of January, and maximum inventory holding is 19,000 units.
Sales are recorded at the end of the month.
Procurement receives a communication from one of its retailers that it is planning a promotional event in July.
The retailer forecasts that it will require an additional 20,000 units. By how much should the level production strategy increase its monthly output of units in order to meet the requirements of the retailer and minimize overall inventory levels?
- A. 1,429
- B. 3,000
- C. 2,572
- D. 2,000
Answer: D
Explanation:
Evaluating multimodal shipment options can provide a balance between speed and cost, potentially mitigating delays from the storm while staying within budget. This approach allows for flexible logistics solutions, combining various transport modes to achieve timely delivery. References: Multimodal transportation is often used to address logistical challenges and enhance supply chain resilience.
NEW QUESTION # 87
A company supply manager conducts a review of current freight contracts and finds that payments to the primary carrier for outbound shipments have been based on a published rate schedule, which is revised annually. The supply manager believes the shipping costs may be higher than necessary. In order to reduce outbound transportation costs, which of the following should the supply manager do FIRST'
- A. Solicit proposals from several other reputable carriers
- B. Perform a carrier performance review
- C. Explore savings opportunities with the primary carrier
- D. Initiate a carrier cost audit
Answer: C
Explanation:
The first step in reducing outbound transportation costs is to explore potential savings with the current carrier.
This approach involves negotiating rates and service terms, leveraging existing relationships, and possibly uncovering cost-saving opportunities without the need for complex audits or new vendor searches. Engaging with the primary carrier directly can be an efficient starting point.
NEW QUESTION # 88
A supply manager for a U.S. firm is tasked with negotiating domestic shipping terms. The terms must ensure that the supplier has liability for any damaged products and is responsible for filing any claims with the shipper. The terms must also allow the buying firm to pay the shipper directly for shipping costs. Which of the following will BEST accomplish this objective?
- A. FOB Destination, Freight Collect
- B. FOB Destination, Freight Prepaid
- C. FOB Origin, Freight Allowed
- D. FOB Origin, Freight Collect
Answer: D
Explanation:
FOB Origin, Freight Collect ensures that the supplier holds liability for damaged products and is responsible for claims with the shipper, while the buying firm pays the shipping costs directly to the carrier. This arrangement clearly delineates responsibilities and liabilities as required.
NEW QUESTION # 89
BCD, Inc. is an electronics manufacturer. For many years, BCD has purchased custom white packaging with the company's signature black and red logo. Recently, BCD's quality team rejected a large number of these boxes due to the red and black portions of the logo not being correctly aligned. In addition, BCD's program manager has requested that supply management reduce the costs of the packaging, which have risen dramatically in recent years.
BCD's supply manager meets with the current supplier and learns the following:
1)The two-tone logo requires multiple setups, and the logo is often misaligned, leading to scrap
2)A single-color logo will not have alignment problems
3)The white boxes are more expensive to produce than plain cardboard boxes
4)The marketing team has determined that the all-white packages are no longer a unique way to brand the organization's products Given this situation, which of the following would be the BEST course of action for BCD's supply manager to take?
- A. Create and issue a Request for Proposal (RFP) in order to find new suppliers to provide the all-white boxes with the two-tone logo
- B. Work with the supplier's quality team to correct the misalignment problem
- C. Work with the quality and marketing teams as well as the supplier to negotiate the purchase of plain boxes with a single-color logo
- D. Renegotiate the current pricing for the white boxes by increasing volume and contracting for a longer period of time
Answer: C
Explanation:
The best course of action is to work with the quality and marketing teams, as well as the supplier, to negotiate the purchase of plain boxes with a single-color logo. This solution addresses the alignment issues and reduces costs while aligning with the marketing team's assessment that all-white packaging is no longer unique.
Reference: Cost reduction and quality improvement in supply chain management.
NEW QUESTION # 90
Which of the following refers to the percentage of order requirements met through stock that is present on the shelf?
- A. Buffer stock
- B. Fill rate
- C. Lead time
- D. Inventory turnover
Answer: B
Explanation:
The fill rate refers to the percentage of customer order requirements met directly from stock on hand. It measures the effectiveness of inventory management in fulfilling customer demand without delays, thus indicating the availability of products on the shelf.
NEW QUESTION # 91
Which of the following will be MOST useful for measuring service quality?
- A. Fitness for purpose
- B. Warranty response
- C. Invoice procedures
- D. Accurate documentation
Answer: A
Explanation:
Fitness for purpose" measures service quality by assessing whether a product or service meets the intended use and customer requirements. It focuses on customer satisfaction and the degree to which the service fulfills its purpose, which is crucial for evaluating overall service quality. This approach helps organizations align their offerings with customer expectations, ensuring high standards of service delivery.
NEW QUESTION # 92
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