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Supply Management Integration
Last Update: Jul 16, 2024
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Supply Management Integration Practice Questions

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Supply Management Integration Questions and Answers

Questions 1

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?










Questions 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?



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


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


A sustainable packaging solution with recyclable transport crating


Ownership of the molds and dies used to manufacture the component

Questions 3

A company needs 1,000 widgets in Year 1 and projects that it will need 1,200 widgets in Year 2. The Year 1 order cost for widgets is $5, and the Year 1 carrying cost is S4. A recent contract renewal with the company's 3PL warehouse supplier will increase carrying costs in Year 2 to S6. How, if at all, will the Economic Order Quantity (EOQ) be affected?



The EOQ will increase in Year 2 to 54 units.


The EOQ will stay the same in Year 2.


The EOQ will decrease in Year 2 to 32 units.


The EOQ will decrease in Year 2 to 45 units.