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ISM Supply Management Core Exam Sample Questions (Q77-Q82):

NEW QUESTION # 77
A manager wants to examine the effect of season (Spring, Summer, Autumn or Winter) and time of the game (Morning, Afternoon or Evening) on the number of television viewers for a National Basketball Association game. How many dummy variables should be included in the multipleregression?

A. 0
B. 1
C. 2
D. 3

Answer: C

NEW QUESTION # 78
A firm's supply manager is asked by the engineering department to replace a chemical used in a majority of products made by the firm. The current chemical is Imported and has components that are highly regulated.
Engineering wants to replace it with a chemical that uses non-hazardous domestic materials. This chemical would still have to be reported and customers would have to be notified of the change. Initial tests indicate that the new chemical is as effective as the old one. In this situation, which of the following should be the FIRST step taken by the supply manager?

A. Perform a total cost analysis of the recommended new formula
B. Notify all customers of the proposed change
C. Check if the proposed supplier is ISO 14000 certified
D. Update the project folder and timeline for implementation

Answer: A

Explanation:
* Identify the Change Requirement: The engineering department wants to replace a highly regulated imported chemical with a domestic, non-hazardous alternative.
* Evaluate the Impact:
* Assess the cost implications of switching chemicals, including sourcing, handling, and compliance costs.
* Consider the impact on production processes, product quality, and customer acceptance.
* Total Cost Analysis: Performing a comprehensive total cost analysis will provide a clear picture of all associated costs, ensuring that the decision is financially sound and aligns with the company's strategic objectives.
* Subsequent Steps: If the cost analysis is favorable, update project timelines, check supplier certifications, and notify customers. References:
* Total Cost of Ownership (TCO) Analysis Frameworks
* Chemical Supply Chain Management
* Best Practices in Supplier Evaluation and Selection

NEW QUESTION # 79
A supply manager for DEF Inc. meets with the firm's operations team to discuss the requirements for a new piece of equipment. The team establishes the specifications, and the supply manager begins contacting suppliers. The supply manager finds that almost everything specified is outside the normal features of the equipment and will require custom modifications. These modifications will raise the cost to 2.5 times the amount budgeted. In this situation, which of the following should the supply manager do?

A. Review the specifications to ensure alignment between what is available and what is requested
B. Negotiate with the suppliers to get a price closer to the budgeted cost
C. Purchase the equipment as specified by the operations team and quoted by the suppliers
D. Source new suppliers for the equipment with better prices

Answer: A

NEW QUESTION # 80
A supply management department obtains executive support to adopt category management. Which of the following is a key step in establishing the categories to be managed?

A. Conducting a Pareto analysis
B. Conducting a spend and forecast analysis
C. Developing category-specific action plans
D. Developing a category management governance structure

Answer: B

Explanation:
* Adopting Category Management: Executive support has been obtained to implement category management.
* Key Step: Conducting a spend and forecast analysis is crucial to understanding current expenditures and future needs.
* Spend Analysis: Helps in identifying how much is spent in different categories and areas of potential savings.
* Forecast Analysis: Projects future needs based on historical data, market trends, and organizational goals, ensuring that the categories are managed effectively.
References
* CIPS. (n.d.). Category Management: Best Practices.
* ISM. (n.d.). Conducting Spend Analysis for Effective Procurement.

NEW QUESTION # 81
RST, Inc. is a global electronics manufacturer which has purchased electronic assemblies from Supplier X for many years. RST has experienced occasional quality problems with these assemblies, and these problems have caused significant delays in production. Because RST's senior management regards Supplier X as a loyal supplier, the firm has not looked to replace it. Nevertheless, RST's supply manager feels that Supplier X has become complacent in Its relationship with RST and is behind the market in important technological advances.
Which of the following should the supply manager do FIRST to convince RST's senior management to re-source the electronic assemblies?

A. Present a global business case to senior management, as the market for the assemblies is international
B. Present a value analysis of Supplier X to both RST's and Supplier X's senior management
C. Begin the seven-step strategic sourcing process
D. Perform an on-site quality assessment of Supplier X

Answer: A

Explanation:
To convince senior management to re-source electronic assemblies, the supply manager should present a global business case. This approach considers the international market dynamics and highlights the competitive disadvantage of continuing with a supplier that has quality issues and lacks technological advancements. Presenting a value analysis (A), performing an on-site quality assessment (C), or starting the strategic sourcing process (D) are useful steps but might not be as compelling initially as a comprehensive business case. References: Strategic sourcing best practices, supplier evaluation criteria, global market analysis in procurement.

NEW QUESTION # 82
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