Free ISM INTE Practice Exam with Questions & Answers | Set: 2

An oligopoly is a market structure where a few sellers dominate the market and many buyers ex-ist. In such a market, prices and output levels are often controlled by the leading firms or through collusion, such as forming a cartel. These firms hold significant market power, which allows them to influence prices and other market factors. Oligopolies are common in industries where high en-try barriers exist, such as telecommunications, airlines, and oil and gas. References:

•Perloff, J. M. (2016). Microeconomics: Theory and Applications with Calculus. Pearson.

•Mankiw, N. G. (2014). Principles of Microeconomics. Cengage Learning.

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.

Air freight and motor carriage are the quickest ways to ship food products, ensuring that perishable items reach their destination rapidly to prevent spoilage. Air freight offers fast transit, while motor carriage provides flexible last-mile delivery.

For a firm purchasing and selling products internationally, referencing international standards ensures compatibility, quality, and compliance across different markets. This practice facilitates global trade and meets regulatory requirements. References: International standards (e.g., ISO) are critical in maintaining consistency and reliability in global supply chains.

Implementing a Corrective Action Plan (Option C) will be most helpful in resolving the issue of scratched parts. This plan involves identifying the root cause of the problem, implementing changes to prevent recurrence, and monitoring the effectiveness of these changes. A structured approach to corrective action can address quality issues efficiently and prevent future disruptions. Reference: Quality management systems and corrective action planning.

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.

When a previously reliable supplier starts delivering flawed parts, the first step should be to ex-plore possible root causes. This approach helps in identifying any recent changes in the supplier's production processes, materials, or workforce that might be contributing to the quality issues. By understanding the root cause, the supply manager can work with the supplier to implement correc-tive actions, ensuring long-term solutions rather than temporary fixes. This collaborative approach also maintains a good relationship with the supplier and encourages continuous improvement. References:

•Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and Supply Chain Management. Cengage Learning.

•Burt, D. N., Petcavag

Achieving cost savings on future freight invoices is the best use of audit information from a freight bureau. By analyzing freight costs and identifying discrepancies or inefficiencies, XYZ can negotiate better terms or optimize its logistics strategy.

To calculate the Mean Absolute Percentage Error (MAPE), we follow these steps:

1.Find the absolute error for each month.

2.Convert the absolute error to a percentage of the actual demand for each month.

3.Find the average of these percentage errors over the six-month period.

Here’s the calculation:

•January: ∣100,000−80,000100,000∣×100=20%\left| \frac{100,000 - 80,000}{100,000} \right| \times 100 = 20\%100,000100,000−80,000×100=20%

•February: ∣105,000−90,000105,000∣×100=14.29%\left| \frac{105,000 - 90,000}{105,000} \right| \times 100 = 14.29\%105,000105,000−90,000×100=14.29%

•March: ∣110,000−100,000110,000∣×100=9.09%\left| \frac{110,000 - 100,000}{110,000} \right| \times 100 = 9.09\%110,000110,000−100,000×100=9.09%

•April: ∣70,000−100,00070,000∣×100=42.86%\left| \frac{70,000 - 100,000}{70,000} \right| \times 100 = 42.86\%70,00070,000−100,000×100=42.86%

•May: ∣90,000−110,00090,000∣×100=22.22%\left| \frac{90,000 - 110,000}{90,000} \right| \times 100 = 22.22\%90,00090,000−110,000×100=22.22%

•June: ∣100,000−90,000100,000∣×100=10%\left| \frac{100,000 - 90,000}{100,000} \right| \times 100 = 10\%100,000100,000−90,000×100=10%

MAPE=(20+14.29+9.09+42.86+22.22+10)6=19.41%≈20%MAPE = \frac{(20 + 14.29 + 9.09 + 42.86 + 22.22 + 10)}{6} = 19.41\% \approx 20\%MAPE=6(20+14.29+9.09+42.86+22.22+10)=19.41%≈20%

Thus, the MAPE for the six months of data is approximately 20%. References:

•Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006). Operations Management for Compet-itive Advantage. McGraw-Hill/Irwin.

•Hyndman, R. J., & Athanasopoulos, G. (2018). Forecasting: principles and practice. OTexts.

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.