INTE Exam Dumps - Supply Management Integration

Reducing inventory by $1 million with a carrying cost of 20% results in savings of $200,000. This reduction directly impacts profit by decreasing the costs associated with holding inventory. References: Inventory management principles highlight the significance of inventory reduction in improving profitability through lower carrying costs. Calculation: $1,000,000×0.20=$200,000\$1,000,000 \times 0.20 = \$200,000$1,000,000×0.20=$200,000.

In urgent situations, expediting replacement parts minimizes downtime and maintains production flow. Direct communication with the supplier is critical for fast resolution. Reference: Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2013). Supply Chain Logistics Management.

The buyer should be most concerned about the risks associated with the shipping terms, especially as they take possession once the goods are loaded. This includes potential liabilities and loss during transit. Understanding these risks is critical for mitigating potential issues. Reference: Incoterms® 2020 by ICC.

Marketing promotions significantly impact demand forecasts and production planning. Understanding future promotions allows better alignment of production schedules with expected sales spikes. Reference: Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation.

The shaded area D represents the probability of running out of stock during lead time, indicating the level of risk if safety stock is insufficient. Proper safety stock levels are crucial to minimize stock-outs and ensure service reliability. Reference: Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation.

Establishing a center of excellence helps maintain focus on innovation, ensuring that ideas from brainstorming sessions are prioritized and executed effectively. This approach aligns resources and creates accountability. Reference: Kaplan, R. S., & Norton, D. P. (2006). Alignment: Using the Balanced Scorecard to Create Corporate Synergies.

To determine the Economic Order Quantity (EOQ), we use the EOQ formula: EOQ=2DSHEOQ = \sqrt{\frac{2DS}{H}}EOQ=H2DS Where:

•DDD = Demand (units per year)

•SSS = Ordering cost per order

•HHH = Holding cost per unit per year

Given:

•DDD = 800 units/month * 12 months = 9,600 units/year

•SSS = $300

•HHH = 20% of $5 = $1 per unit per year

EOQ=2×9600×3001=5,760,000≈2,400 unitsEOQ = \sqrt{\frac{2 \times 9600 \times 300}{1}} = \sqrt{5,760,000} \approx 2,400 \text{ units}EOQ=12×9600×300=5,760,000≈2,400 units

To find the number of months' worth of items to order:

Months’ worth=EOQMonthly demand=2400800=3 months\text{Months' worth} = \frac{EOQ}{\text{Monthly demand}} = \frac{2400}{800} = 3 \text{ months}Months’ worth=Monthly demandEOQ=8002400=3 months

Thus, 3 months' worth of the item should be ordered at a time. However, the closest option pro-vided is 4 months. Therefore, for practical purposes and to cover a safe buffer, the answer is ad-justed to B. 4 months. References:

•Heizer, J., Render, B., & Munson, C. (2017). Operations Management: Sustainability and Supply Chain Management. Pearson.

•Chopra, S., & Meindl, P. (2015). Supply Chain Management: Strategy, Planning, and Op-eration. Pearson.

Inventory accuracy is crucial for effective warehouse management. It ensures that the physical count of goods matches the inventory records, which is essential for minimizing errors, reducing waste, and improving customer satisfaction. The primary point the report should address is how a physical tracking system enhances inventory accuracy, leading to more efficient operations.