1. Supplier B is one of two global manufacturers of a certain commodity chemical. During a time of supply constraint, Supplier B constructs a new manufacturing facility, which doubles its capacity. Just as the new facility is ready to commence operations, global demand for the commodity drops dramatically, due to the development of a superior substitute. From the moment that Supplier B begins construction of the new facility, Company A’s negotiating position relative to that of Supplier B became

2. A supply manager is implementing a new organization-wide travel policy and reservation booking process as part of an internal cost-cutting initiative. While the new policy and program are under development, the organization finalizes several key acquisitions of smaller companies. Because of the timing of these acquisitions, the acquired employees are not included in the needs assessment survey undertaken to develop the new program’s design. To ensure employee satisfaction with the new policy and reservation process, the supply manager should do all of the following EXCEPT

3. In this type of supplier relationship, the supplier provides desirable quality, delivery, or prices for a purchaser and reacts positively to unforeseen needs such as changes in business volume.

4. A supply manager is negotiating with a critical supplier. The parties have relatively equal bargaining power. Which of the following would MOST likely occur in “win-win “negotiation between these parties?

5. In anticipation of an upcoming price increase by its current supplier, a supply manager in charge of purchasing corrugated boxes conducts a competitive bid to determine if there are any suppliers who can offer more competitive prices. The supply manager accepts a bid from a supplier who will meet the current supplier’s price, and will also hold pricing firm for a second year. The actions of the supply manager can BEST be described as

6. A cross-functional team is executing a strategic sourcing strategy to consolidate the number of agencies used to create Web sites for the company’s products. The team has been working on the project for several months and has finalized its recommendation. Days before the team is scheduled to award the business to selected agencies, two new project stakeholders are identified. The new stakeholders are not familiar with the project’s goals, objectives, or execution. Given this situation, which of the following is the BEST course of action to take?

7. Several items are identified as ‘critical’ in a supply segmentation analysis. In order to add value, the supply management professional should look to

8. A supply manager completes a category profile and identifies services provided by multiple service providers. A market and industry analysis shows that the service providers are growing their businesses by acquiring competitors, thus enabling them to provide a greater range of services. Which of the following techniques will BEST enable the supply manager to leverage market competition?

9. A supply manager is evaluating a departmental budget and notices that there is no comparison between established goals and actual results. This indicates an omission in which of the following?

10. Which of the following is LEAST appropriate as an objective for negotiations?

11. A multi-location manufacturing company wants to have supply management prepare plans on how the organization will resume critical functions within a predetermined time after a disaster or major disruption, with the exception of data, which are handled by the IT department. Which of the following plans is the supply management group being asked to prepare?

12. Supply manager is developing a process to monitor market trends. Information about which of the following is of LEAST importance in this instance?

13. A category manager for ISM. has an upcoming negotiation with Supplier A. Supplier A has a patent on a unique piece of technology that enhances ISM’s best-selling product. ISM’s competitors also use Supplier A’s technology, but the supplier’s capacity is limited for ISM as well as its competitors. Given this situation, which of the following strategies should the category manager employ?

14. An organization outsources its customer service call center. The supplier’s facility is severely damaged by a flood. The FIRST course of action should be to:

15. Once a diagnostic of a company’s spend has been performed, which of the following should take place next in the strategic sourcing process?Collect supplier information

16. Of the following, the selection of a potential new supplier of capital equipment would MOST likely be affected by the:

17. It is said that Digital procurement is the application of disruptive technologies that enable Strategic Sourcing (S2C) to become predictive, Transactional Procurement (P2P) to become automated, and Supplier Risk Management (SRM) to become proactive. Which of the following are disruptive technologies?

18. Which one of the elements listed is NOT necessary for a legal contract?

19. A supply professional is seeking competitive bids on 700 standard parts. Comparing bids on a part-by-part basis will be very time-consuming, and the supply professional feels the effort would not be a good use of time. Which of the following would be the LEASTappropriate course of action?

20. In addition to reduction of total cost of ownership, which of the following is the PRIMARY reason why organizations look to supply management for top-line revenue generation?

21. A sourcing specialist at a global organization has been experiencing extended lead times for security components sourced from Asia. Although the products are shipped on a timely basis, due to their nature, they are being held in customs for extended time periods. Given this situation, which of the following would be the BEST approach for minimizing total lead time?

22. Which of the following provides the MOST comprehensive view when determining the total cost of procured materials?

23. In order to guarantee supply of a component that appears in the critical quadrant of the supplier segmentation model, a supply manager should

24. Which of the following is LEAST likely to contribute to the effectiveness of audits?

25. A supply manager wishes to align the goals of the organization’s procurement function with its strategic financial metrics. Of the following, the MOST appropriate approach would be to

26. In the hierarchy of the planning process, which of the following should be completed FIRST?

27. Which of the following refers to the process of identifying elements or factors that could lead to injury, loss, damage, or failure?

28. Which of the following supply process improvements is LEAST likely to help an organization meet its sales goals?

29. A supply manager for XYZ Plastics notices a large increase in orders from hardware stores for large, blue plastic sheets after a hurricane strikes a major city. Several months later, XYZ’s inventory of unsold product rises dramatically. Which of the following is the MOST likely cause of this?

30. Which of the following supply process improvements is LEAST likely to help an organization meet its sales goals?

31. In order to guarantee supply of a component that appears in the critical quadrant of the supplier segmentation model, a supply manager should

32. A buying organization has the greatest opportunity to experience cost efficiencies when it

33. A sourcing specialist working on a project improvement team identifies a product line for which both profit margins and sales volumes have declined. Although the end product is a staple in the industry, customers have resisted price increases and have sought alternatives. The product is also subject to sharp fluctuations in demand due to consumer trends. Resultant stockouts have led to lost sales. Through value analysis, the team identifies a ball bearing component that is single sourced from a supplier to the aerospace industry. The supplier was chosen years back, because of its ability to provide the precise overall dimensions required for the component. Discussions with the supplier reveal that 3 weeks of the 6-week lead time for the product are spent in a precision polishing operation for a smooth surface condition. The process also accounts for one-third of the product cost. Product quality and reliability from the supplier have been exceptional, although there are other suppliers for ball bearings. Which of the following courses of action should the project team recommend to recoup shrinking margins and volume for this product line?

34. What is one advantage of the SCOR system?

35. Which of the following is LEAST likely to be true with regard to a Service Level Agreement (SLA)?

36. Which of the following are the PRIMARY factors that influence transportation costs?

37. A supply manager forms a cross-functional team to study opportunities for standardization in the manufacture of widgets. Currently, the widgets are produced in facilities located in Hong Kong, Costa Rica, and the United States. Which of the following factors is LEAST likely to affect the standardization efforts?

38. A supply manager completes a category profile and identifies services provided by multiple service providers. A market and industry analysis shows that the service providers are growing their businesses by acquiring competitors, thus enabling them to provide a greater range of services. Which of the following techniques will BEST enable the supply manager to leverage market competition?

39. A supply manager is developing a supply risk management plan. Upon review of the current strategic sourcing plan, it is learned that many single-sourced items are delivered on a just-in-time (JIT) basis. Which of the following is the BEST course of action for the supply manager to take in order to determine whether to change the current sourcing plan?

40. The consolidation of requirements from multiple buying organizations into a single large order to obtain quantity discounts is called

41. One general goal of supplier relationship management (SRM) is to:

42. Which of the following best defines the term "supply chain"?

43. Common problems associated with the introduction of e-commerce in an organization will be likely to include all of the following EXCEPT:

44. Using a sole-sourced supplier with significant transparency of costs between buyer and seller in order to leverage each firm’s comparative advantage is an example of a strategy for what category of spend?

45. Shortly after contract negotiations have begun, a supplier makes an offer with a price well above the expected range (High Ball Offer). Which of the following tactics should you use?

46. A supply management team is preparing to justify to top management a major expenditure on a new automated system to improve requisition processing. The cost will be significant, and time commitments may affect related departments. However, the team has evaluated various options and is convinced that the benefits of this system will make the costs worthwhile. Which of the following is LEAST likely to support their case?

47. ABC Corporation has a centralized supply management organization. The CEO directs that the organization must lower costs and expenses, and that performance appraisals will be based on results achieved. Given this scenario, which of the following should be given the LEAST attention?

48. A supply manager seeks to improve the negotiation skills of a commodity team. Sourcing teams in the organization have been price-focused and rewarded accordingly. This has come at the expense of stakeholder satisfaction and cannot be maintained in current relationships with the supply base. The supply manager works with the team to gather internal and external commodity data, current market pricing, and value propositions that can be offered to selected suppliers. The team learns that although this may take time, value-based relationships will lead to longer-term agreements. Which of the following has been employed to arrive at the method of improvement described?

49. Which of the following is MOST likely to minimize picking errors, increase inventory accuracy, and reduce associated costs?

50. An electronics company spends millions to improve production and order-fulfillment times. The company’s on-time delivery performance is excellent. However, delivery performance is no longer the key to profitable growth. The supply manager recognizes the need to move to a much lower break-even point. This represents a misalignment with

51. Which of the following is a generally acceptable reason for limiting competition by soliciting a bid from only one
supplier?

52. What is one way to reduce the contribution of lead time to the bullwhip effect?

53. As typically defined, social responsibility includes all the following areas EXCEPT

54. A supply manager has met with internal stakeholders to improve the level of service provided. In order to improve response and reduce administrative costs, the supply manager is considering an e-business application. Disaster recovery is a prime concern in selecting a supplier. Which of the following criteria would address this concern?

55. An organization outsources its customer service call center. The supplier’s facility is severely damaged by a flood. The FIRST course of action should be to

56. Supply management contributes to an organization’s flexibility and quality in which two of the following ways?

I. Promoting early supplier involvement

II. Ensuring accurate specifications

I. Promoting early supplier involvement

IV. Increasing the supply base

57. A supply manager is evaluating several potential overseas suppliers, and the degree of risk each would bring to the supply chain. Which of the following employment characteristics would be MOST favorable in a manufacturing relationship?

58. A supply manager sources for steel, a strategic component for the organization. As a result, an offshore supplier is chosen. A contract is executed and production begins. But within a few weeks, the supply manager receives criticism from senior management about the arrangement with the offshore supplier. Which of the following is the MOST likely reason for this criticism?

59. ABC Ltd. hires several outside law firms for all of its legal work. An investigation by the firm’s category management team concludes that ABC’s legal needs can be fulfilled by two suppliers and that rationalizing the supply base will reduce costs and drive cost efficiencies with the remaining suppliers. The category management team intends to present this plan to senior management. Which of the following will be MOST important for this team to emphasize?

60. Which of the following cost analysis methods would be LEAST useful in selecting and negotiating with a domestic supplier of capital equipment to be used in a production facility?