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ISM Supply Management Core Exam Sample Questions (Q150-Q155):
NEW QUESTION # 150
Questions pertaining to standardizing products, reducing the number of suppliers, and combining volumes to attain better pricing are BEST addressed by which of the following?
- A. ERP system
- B. Category strategy
- C. Spend analysis
- D. Category action plan
Answer: B
Explanation:
A category strategy involves analyzing and managing specific categories of products or services to achieve better pricing, quality, and supplier relationships. By standardizing products, reducing the number of suppliers, and combining volumes, the company can leverage its purchasing power to negotiate better terms and conditions. This approach is comprehensive and strategic, focusing on optimizing procurement and supply chain management for specific categories.
References
* CIPS (Chartered Institute of Procurement & Supply). Category Management in Procurement.
* ISM (Institute for Supply Management). Strategic Sourcing and Category Management.
NEW QUESTION # 151
DEF Inc. receives several batches of inferior quality products from a supplier. Although all of the samples provided by this supplier met or exceeded specifications, it is learned that the facility used to produce the samples is in a different location than the regular production facility, and that the production environment could affect quality.
DEF could have prevented this situation by doing which of the following?
- A. Requesting larger samples from the supplier prior to going into production
- B. Requiring the supplier to provide assurance that its products will meet the required specifications
- C. Placing stricter quality controls in the receiving dock to prevent defective products from being accepted into inventory
- D. Requesting and testing samples from all possible supplier manufacturing locations
Answer: D
Explanation:
* Requesting and Testing Samples from All Possible Supplier Manufacturing Locations: This would have ensured that DEF Inc. tested the quality of products from the actual production facility, not just the sample facility.
* Requesting Larger Samples: While this might help, it doesn't address the issue of different production environments potentially affecting quality.
* Requiring Assurance from Supplier: This is important but not sufficient by itself. The assurance doesn't substitute for actual testing from the correct facility.
* Stricter Quality Controls at Receiving Dock: This is a reactive measure and doesn't prevent the
* problem from occurring in the first place.
References
* Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning.
* Burt, D. N., Petcavage, S. D., & Pinkerton, R. L. (2010). Supply Management. McGraw-Hill Education.
NEW QUESTION # 152
Which of the following scatterplots shows the strongest positive linear relationship? A)
B)
C)
D)
- A. Option B
- B. Option A
- C. Option C
- D. Option D
Answer: A
NEW QUESTION # 153
A supply manager receives negative feedback from internal stakeholders about several suppliers. However, the scorecards for these suppliers have been positive over the past few quarters, and any diminished performance is not reflected. Which of the following MOST likely explains this situation?
- A. The stakeholder requirements changed over time.
- B. The scorecard metrics were calculated incorrectly.
- C. The stakeholders failed to attend quarterly review meetings.
- D. The stakeholders' input to scorecards was improperly captured.
Answer: A
Explanation:
* Review Stakeholder Feedback: Understanding the nature of the negative feedback is the first step.
* Analyze Scorecard Metrics: If the scorecards have been positive, but the feedback is negative, it suggests a misalignment.
* Identify Changes in Requirements: Stakeholders' needs and expectations might have evolved, and these changes may not be reflected in the current scorecard metrics.
* Adjust Metrics Accordingly: The scorecards should be updated to align with the new requirements to ensure they accurately reflect supplier performance.
References
* Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning.
* van Weele, A. J. (2018). Purchasing and Supply Chain Management: Analysis, Strategy, Planning and Practice. Cengage Learning.
NEW QUESTION # 154
A multinational company is in the market to purchase widgets. The firm's standard payment terms are net 80.
While negotiating terms and conditions, a supplier offers to provide a 2% discount on the purchase price of the widgets if they are paid within 35 days. This is an example of which of the following?
- A. Supplier financing
- B. Dynamic discounting
- C. Fixed discounting
- D. Profit repatriation
Answer: B
Explanation:
* Definition: Dynamic discounting is a financial strategy where the buyer can take a discount for early payment, often negotiated on a sliding scale.
* Example Context: The supplier offers a 2% discount if payment is made within 35 days instead of the standard 80 days.
* Benefit: This incentivizes the buyer to pay earlier, improving the supplier's cash flow while offering the buyer a cost saving.
References
* Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning.
* van Weele, A. J. (2018). Purchasing and Supply Chain Management: Analysis, Strategy, Planning and
* Practice. Cengage Learning.
NEW QUESTION # 155
......
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