INTE Exam Dumps - ISM CPSM Questions and Answers

With a gross requirement of 100 units and an open order for 55 units, 45 additional units are needed. Given the lot size of 30 units, the exception report would indicate ordering 45 units to meet the requirements.

Speculative buying occurs when an organization purchases more inventory than necessary based on the forecasted increase in prices or potential shortages. This strategy aims to capitalize on market conditions, potentially resulting in financial gains. Reference: Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management.

The process described is Collaborative Planning, Forecasting and Replenishment (CPFR), which involves both the retailer and supplier working together to improve product availability and reduce costs associated with inventory, transportation, and logistics. References: CPFR is a widely adopted strategy in supply chain management to enhance collaboration and optimize the supply chain.

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.

The first course of action should be to assess internal process flow diagrams and those of the subcontractors to identify areas where the risk of loss can occur. Understanding the processes helps pinpoint vulnerabilities and implement targeted security measures. This approach ensures that the root causes of theft are addressed before investing in technology solutions. Reference: Risk management and loss prevention strategies in logistics.

In the context of low-cost country sourcing and minimizing risk when importing goods, the selection of appropriate Incoterms® 2020 rules is crucial.

DAP (Delivered at Place) is the most suitable Incoterm for a firm wanting to assume the least amount of risk. Under DAP, the seller is responsible for all costs and risks associated with delivering the goods to a specified destination, which includes transportation, export customs clearance, and any other logistical arrangements until the goods are made available for unloading at the buyer's location. This significantly reduces the buyer's risk as the seller handles most of the transportation and logistics.

Other Incoterms, such as:

CFR (Cost and Freight): The seller pays for the cost and freight to bring the goods to the port of destination. However, the risk is transferred to the buyer once the goods are loaded on the vessel.

CPT (Carriage Paid To): Similar to CFR, but can be used for any mode of transport. The seller covers transport costs to a specified destination, but the risk transfers to the buyer upon handing over the goods to the first carrier.

EXW (Ex Works): The buyer assumes all risks and costs from the seller's premises onward, making it the highest risk for the buyer.

References:

Incoterms® 2020 by the International Chamber of Commerce (ICC)

"A Guide to Incoterms® 2020" by the International Trade Centre (ITC)

Delivering 2 pallets optimizes cost-effectiveness based on the probabilities of usage and potential costs of over- or under-supply. This number balances the likelihood of demand with the costs associated with restocking and emergency purchases, minimizing overall expenditure in uncertain conditions.

Establishing progress milestones and monitoring allows the company to track performance and address issues promptly, reducing delays and cost overruns. It provides clear checkpoints and accountability in service contracts. References: Effective contract management involves setting measurable milestones to ensure timely and cost-effective project completion.

Access issues at the new warehouse can lead to increased delivery times and shipping costs, as drivers may face delays or require alternative routes. Resolving access problems is crucial for restoring efficient operations.

Raising the reporting level of key supply management personnel is crucial for integrating supply management into the company's strategic focus. This ensures that supply management decisions align with executive strategies on cost containment and competitiveness, enhancing visibility and influence.