Web: www.solution2pass.com Email: support@solution2pass.com Version: Demo [ Total Questions: 10] ISM CORE Supply Management Core Exam IMPORTANT NOTICE Feedback We have developed quality product and state-of-art service to ensure our customers interest. If you have any suggestions, please feel free to contact us at feedback@solution2pass.com Support If you have any questions about our product, please provide the following items: exam code screenshot of the question login id/email please contact us at and our technical experts will provide support within 24 hours. support@solution2pass.com Copyright The product of each order has its own encryption code, so you should use it independently. Any unauthorized changes will inflict legal punishment. We reserve the right of final explanation for this statement. ISM - CORE Pass Guaranteed 1 of 7 Only Solution2Pass for Any Exam A. B. C. D. A. B. C. D. Question #:1 A firm currently pays $14 per unit for a part used in manufacturing. In an effort to lower costs, the firm invites potential suppliers to participate in an online auction. Suppliers complete a pre-qualification phase before the auction begins. The auction starts with an opening bid of $9 per unit. The auction lasts four hours and no suppliers submit bids. Which of the following is the MOST likely reason for the lack of participation in this auction? The specifications favor a particular supplier The pre-qualification process was flawed The reserve price was set too low The suppliers lack experience with reverse auctions Answer: C Explanation The reserve price is the minimum price that the buyer is willing to accept for a unit of the part. If the opening bid of $9 per unit is significantly lower than the current price of $14 per unit, suppliers may perceive that the auction conditions are not favorable for their participation, leading to a lack of bids. This low reserve price might be seen as unachievable or unprofitable by potential suppliers, discouraging them from engaging in the auction. References: "Purchasing and Supply Chain Management" by Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, and James L. Patterson Articles on online auctions and reserve pricing in supply chain management journals Question #:2 A supply manager seeks bids on a new piece of capital equipment. The equipment is budgeted at $115,000. Three suppliers send in bids of $110,000, $114,000 and 5135,000. After receiving the bids, additional negotiations with the low bidder result in a final cost of $105,000. In this situation, what should the baseline value be for calculating cost avoidance? $114,000 $135,000 $110,000 $115,000 Answer: C Explanation ISM - CORE Pass Guaranteed 2 of 7 Only Solution2Pass for Any Exam A. B. C. D. Initial Bids Review : Evaluate the bids submitted by the suppliers ($110,000, $114,000, and $135,000). Lowest Bid Consideration : The lowest initial bid of $110,000 should be the baseline because it represents the market's competitive price before any negotiation. Calculate Cost Avoidance : After negotiations, the final cost is $105,000. The cost avoidance is calculated against the $110,000 baseline, showing the savings achieved through negotiation. 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. Question #:3 A firm becomes a publicly-traded company. To ensure compliance with Sarbanes-Oxley, the company must report what types of risks (if any) on the annual report to shareholders? No risks Operational risks only Financial risks only All major risks Answer: D Explanation Under the Sarbanes-Oxley Act, publicly-traded companies are required to disclose all major risks in their annual reports to shareholders. This includes operational, financial, strategic, and compliance risks. The aim is to provide a comprehensive view of the risks that could potentially impact the company's performance and ensure transparency for investors. References Sarbanes-Oxley Act of 2002, Section 404. SEC (Securities and Exchange Commission) guidelines on risk disclosures. Question #:4 A supply manager for an electronics manufacturer is asked to source packaging for the company's new printed circuit board. The specifications recommend 0.50 mm tolerances, with a projected breakage ratio of 0.50%, at a cost of $1.00 each. The supply manager finds an alternative source that is specified at 0.60 mm tolerances, ISM - CORE Pass Guaranteed 3 of 7 Only Solution2Pass for Any Exam A. B. C. D. A. B. with a projected breakage ratio of 0.75%, at a cost of $0.80 each. If the cost of the new circuit board is $120 per unit, which packaging should the supply manager recommend and why? The 0.50 mm packaging, as It is the most cost effective. The 0.50 mm packaging, as the supply manager's primary responsibility is honoring internal stakeholder requests. The 0.60 mm packaging, as it is the most cost effective. The 0.60 mm packaging, as it is only $0.80 each, while the 0.50 mm packaging is $1.00 each. Answer: C Explanation To determine the most cost-effective packaging option, we need to consider both the cost per packaging unit and the projected breakage ratio. Here are the calculations: For 0.50 mm packaging: Cost per unit: $1.00 Breakage ratio: 0.50% Effective cost considering breakage: $1.00 * (1 + 0.005) = $1.005 For 0.60 mm packaging: Cost per unit: $0.80 Breakage ratio: 0.75% Effective cost considering breakage: $0.80 * (1 + 0.0075) = $0.806 Comparing $1.005 to $0.806, the 0.60 mm packaging is more cost-effective. Therefore, the supply manager should recommend the 0.60 mm packaging. References Supply Chain Management principles regarding cost analysis. Basic breakage and cost calculations used in supply chain decision-making. Question #:5 Which of the following is the simplest form of supplier evaluation? Benchmarking ISM - CORE Pass Guaranteed 4 of 7 Only Solution2Pass for Any Exam B. C. D. A. B. C. D. Categorical Weighted point Scorecard Answer: B Explanation The categorical method is the simplest form of supplier evaluation. It involves rating suppliers based on various categories such as quality, delivery, and service. Each category is rated using a simple system, such as satisfactory/unsatisfactory or good/average/poor. This method is straightforward and easy to implement compared to benchmarking (Option A), weighted point (Option C), and scorecard (Option D) methods, which are more detailed and complex. References: Supplier Evaluation and Performance Excellence: A Guide to Meaningful Metrics and Successful Results by Sherry R. Gordon Purchasing and Supply Chain Management by Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, and James L. Patterson Question #:6 A company's major supplier of sub-assemblies provides excellent quality and reasonable costs. However, shipping delays and damage in transit make this supplier less reliable than desired. The supply manager would like to retain this supplier if possible, but is concerned about the reliability issues. Given this situation, which of the following is the BEST course of action for the supply manager to take? Negotiate lower prices to compensate for the impact of delivery problems Collaborate with the supplier to improve its outbound logistics Increase forecasting lead times and safety stock for the supplier's products Give the supplier a deadline by which to remedy unsatisfactory performance Answer: B Explanation The best course of action is to collaborate with the supplier to improve its outbound logistics. This approach addresses the root cause of the reliability issue—shipping delays and damage in transit. Working closely with the supplier can lead to process improvements, better packaging solutions, and enhanced logistics practices. This collaboration can help maintain the supplier relationship while improving reliability and ensuring a consistent supply of sub-assemblies. References ISM - CORE Pass Guaranteed 5 of 7 Only Solution2Pass for Any Exam A. B. C. D. A. B. Supplier Relationship Management (SRM) principles Lean Supply Chain and Logistics Management by Paul Myerson Case studies from the Council of Supply Chain Management Professionals (CSCMP) Question #:7 A supply manager Is conducting negotiations with a supplier. The supplier states that it cannot offer a lower price because the product under negotiation is covered by a government contract. In this situation, the supply manager should offer to reduce the order quantity negotiate the other terms and conditions, and return to the issue of price at a later time conclude that this is in fact the best price that the supplier can legally offer require the supplier to provide specifics on the government contract restrictions Answer: D Explanation When a supplier states that a product is covered by a government contract, implying that they cannot offer a lower price, it is essential for the supply manager to verify this claim. The supply manager should require the supplier to provide specifics on the government contract restrictions. This will help determine if the price is indeed fixed by the government or if there are other negotiable aspects. By understanding the exact restrictions, the supply manager can better navigate the negotiation process, ensuring compliance while potentially identifying areas for negotiation that are not restricted. References: Federal Acquisition Regulation (FAR) guidelines on government contracts. "The Art of Negotiation" by Michael Wheeler. Institute for Supply Management (ISM) guidelines on government contract negotiations. Question #:8 A buyer finds an opportunity to reduce costs for a particular service through competitive bidding. The buyer issues a request for quotation (RFQ) to prequalified suppliers. However, the statement of work is incomplete, and not clear enough to get an accurate price for the service. Which of the following is the BEST course of action for the buyer to take in order to get a proper statement of work included in the RFQ? Gather information on the service and prepare a new statement of work ISM - CORE Pass Guaranteed 6 of 7 Only Solution2Pass for Any Exam B. C. D. A. B. C. D. Send an email to stakeholders asking them to review and update the current statement of work Contact the stakeholders and coordinate the improvement of the existing statement of work Send an email to stakeholders and request a new statement of work Answer: C Explanation The buyer has identified an opportunity to reduce costs through competitive bidding but the current statement of work (SOW) is incomplete. Gather information on the service and prepare a new statement of work : This could be effective but may not leverage the expertise of stakeholders. Send an email to stakeholders asking them to review and update the current statement of work : This may not ensure thorough and coordinated input. Contact the stakeholders and coordinate the improvement of the existing statement of work : This is the best course of action as it ensures a collaborative approach, leveraging the knowledge and expertise of all relevant parties to create a comprehensive and accurate SOW. Send an email to stakeholders and request a new statement of work : Similar to option B, this may not ensure a coordinated effort. Therefore, the best course of action is to contact the stakeholders and coordinate the improvement of the existing statement of work References: Project management best practices on developing statements of work. Procurement strategy literature on stakeholder engagement. Question #:9 A major supplier for JKL, Inc. has a production capacity of 100 units a month. For the last six months, however, the supplier's production rate has climbed to 105 units a month. JKL audits the supplier and takes note of the higher production rate. In this situation, which of the following would MOST likely be of concern to JKL? Increased pricing Deteriorating quality Increased lead time Loss of flexibility ISM - CORE Pass Guaranteed 7 of 7 Only Solution2Pass for Any Exam A. B. C. D. Answer: B Explanation The MOST likely concern for JKL, Inc. regarding the supplier’s increased production rate from 100 to 105 units a month would be B. Deteriorating quality. When production rates increase beyond the standard capacity, there is a risk that the quality of the products may decline as the process may be rushed or overextended1. This is a common concern in supply chain management, as maintaining the quality of products is crucial for customer satisfaction and the company’s reputation2. Question #:10 A small electronics manufacturer patents a new device for securing internet servers. While this device consists of standard components and is simple to manufacture, it also contains proprietary engineering and design elements not widely known in the marketplace. After receiving a large order, which exceeds the company's current manufacturing capacity, the firm's supply management department is tasked with outsourcing the manufacture of the device to the most competitive sources available. As the supply management team evaluates selected suppliers, which of the following should be given the MOST consideration? Component part availability Risks to the company's intellectual property Logistical vulnerabilities associated with offshore suppliers Reduced product quality Answer: B Proprietary Elements : The device contains proprietary engineering and design elements that are not widely known. Intellectual Property (IP) Protection : Protecting these elements is critical to maintaining the company’s competitive advantage. Supplier Evaluation : When evaluating suppliers, the risk of IP theft or misuse should be a primary consideration. Security Measures : Assessing suppliers' security measures and their ability to protect sensitive information is essential. Balancing Risks and Costs : While other factors like component availability and logistics are important, the potential impact of IP risks outweighs them due to the proprietary nature of the product. References WIPO (World Intellectual Property Organization) guidelines on intellectual property management. About solution2pass.com solution2pass.com was founded in 2007. We provide latest & high quality IT / Business Certification Training Exam Questions, Study Guides, Practice Tests. We help you pass any IT / Business Certification Exams with 100% Pass Guaranteed or Full Refund. Especially Cisco, CompTIA, Citrix, EMC, HP, Oracle, VMware, Juniper, Check Point, LPI, Nortel, EXIN and so on. 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