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ISM Exam INTE Topic 1 Question 14 Discussion

Actual exam question for ISM's INTE exam

Question #: 14
Topic #: 1

[All INTE Questions]

PQR, Inc. produces office supplies for big box retailers. This is a highly competitive market and the requirement for maintaining a continuous inventory of product for retailers is a high priority for PQR. Recently, the firm experienced shipping delays from overseas suppliers. Which of the costs associated with shortages would be MOST critical for PQR?

AIdle workers

BProduction downtime

CExpedited shipping

DLost sales

Show Suggested Answer

Suggested Answer: D

In a highly competitive market like office supplies, the most critical cost associated with shortag-es is typically lost sales. If PQR, Inc. experiences shipping delays and cannot maintain continuous inventory, customers are likely to turn to competitors to meet their needs. This can result in im-mediate lost sales and potentially long-term loss of customer loyalty. The cost of lost sales often outweighs other costs like idle workers or production downtime because it directly affects revenue and market share. Reference:

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

* Christopher, M. (2016). Logistics & Supply Chain Management. Pearson UK.

by Hortencia at Sep 15, 2024, 04:47 AM

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Dick

4 months ago

Idle workers? Might as well give them a game of office chair jousting to pass the time. C) Expedited shipping is the way to go!

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Nobuko

4 months ago

Expedited shipping is the way to go!

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Roxane

4 months ago

Idle workers? Might as well give them a game of office chair jousting to pass the time.

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Elke

4 months ago

Lost sales? That's a no-brainer. D) Lost sales is the biggest threat to PQR's profitability here.

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Freeman

4 months ago

Hmm, tough one. But I think C) Expedited shipping is the way to go. Can't let the retailers run out of inventory!

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Matilda

4 months ago

I'm going with C) Expedited shipping. Gotta get those supplies moving, even if it costs a bit more.

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Shonda

4 months ago

Lost sales would be a huge hit for PQR, we need to avoid that at all costs.

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Martha

4 months ago

I agree, we can't afford to have production downtime.

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Rikki

4 months ago

Expedited shipping is definitely crucial in this situation.

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Thersa

4 months ago

I'd say D) Lost sales. Losing out on sales is the most critical impact to the bottom line for PQR in this situation.

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Talia

5 months ago

Definitely C) Expedited shipping. PQR needs to get those supplies to the retailers ASAP to avoid lost sales.

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Shaunna

4 months ago

Idle workers would be a waste of resources for PQR during the shipping delays.

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Glynda

4 months ago

I agree, production downtime would also be a big issue for PQR if they can't get their supplies on time.

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Brock

4 months ago

Expedited shipping is definitely crucial for PQR to avoid lost sales.

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Willetta

5 months ago

Expedited shipping could also be important to avoid losing customers to competitors.

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Mickie

5 months ago

I agree with Jeanice, lost sales can have a big impact on the company's revenue.

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Jeanice

5 months ago

I think the most critical cost for PQR would be lost sales.

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