Reliable CORe Test Cost & Exam CORe Quick Prep
Reliable CORe Test Cost & Exam CORe Quick Prep
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ISM Supply Management Core Exam Sample Questions (Q271-Q276):
NEW QUESTION # 271
In Dec. of 2013, a company signed a promissory note and recorded a note payable of $150,000. This note is payable in three equal annual installments beginning from Dec. of 2014. How should the company report the note payable on its Dec. 31, 2013 balance sheet?
- A. $50,000 in current liability and $100,000 in noncurrent liability
- B. $50,000 in noncurrent liability and $100,000 in current liability
- C. $150,000 in current liability
- D. $150,000 in noncurrent liability
Answer: A
NEW QUESTION # 272
EFG, Inc. is conducting a sourcing activity to identify a provider of operational software. Both large and small consulting firms are invited to bid. Given that the supplier's financial stability will be an important element in the selection process, which of the following is the BEST course of action for EFG to take?
- A. Contact the suppliers and ask them for the contact information of the bankers who service their accounts
- B. Have EFG's comptroller evaluate the suppliers' financial statements and interview the suppliers' CFOs
- C. Obtain Dun & Bradstreet reports for the potential suppliers and review them for financial vulnerabilities
- D. Conduct a reference check on the suppliers, focusing on timely performance and financial stability
Answer: C
Explanation:
The BEST course of action for EFG, Inc. to take in assessing the financial stability of potential suppliers for operational software is A. Obtain Dun & Bradstreet reports for the potential suppliers and review them for financial vulnerabilities. Dun & Bradstreet reports provide comprehensive insights into a company's financial health, including credit scores, financial stability, and potential risks1. This information is crucial for making informed decisions during the supplier selection process.
NEW QUESTION # 273
A company that makes specialized equipment for a very competitive industry relies on several critical engineered imported components. The components present a high degree of risk that could impact the future growth of the company. Given this situation, which of the following is the BEST course of action for the buying organization to take when preparing for negotiations with suppliers?
- A. Require suppliers to provide risk insurance, with the buying organization listed as contingency beneficiary
- B. Determine with senior management and internal stakeholders the acceptable levels of risk for each product
- C. Change sources of any components or raw materials that are imported from high-risk countries
- D. Ask suppliers to analyze potential sources of risk for all components and raw materials
Answer: B
Explanation:
The best course of action is to determine with senior management and internal stakeholders the acceptable levels of risk for each product. This collaborative approach ensures that the organization has a clear understanding of its risk tolerance and can develop appropriate strategies to mitigate those risks. It involves assessing the potential impact of risks on the business and aligning risk management strategies with the company's overall objectives. This preparation is crucial for effective negotiations with suppliers, ensuring that all parties are on the same page regarding risk management.
References
* Risk Management in Supply Chains by David L. Olson and Desheng Dash Wu
* COSO (Committee of Sponsoring Organizations of the Treadway Commission) ERM (Enterprise Risk Management) Framework
* ISO 31000 Risk Management Standards
NEW QUESTION # 274
Which of the following is the FIRST step in the category management process?
- A. Build the team and project charter and develop a scope of work
- B. Conduct contract negotiations with strategic and/or preferred suppliers
- C. Conduct market research to understand the supply market
- D. Develop a strategy to classify suppliers capable of providing material requirements
Answer: A
Explanation:
The first step in the category management process is to build the team, create a project charter, and develop a scope of work. This foundational step ensures that there is a clear understanding of the project's goals, roles, and responsibilities. A well-defined project charter aligns the team and stakeholders, sets the project's direction, and helps in developing a comprehensive strategy for managing the category.
References:
* "Category Management in Purchasing: A Strategic Approach to Maximize Business Profitability" by Jonathan O'Brien.
* Institute for Supply Management (ISM) guidelines on category management.
* Chartered Institute of Procurement & Supply (CIPS) resources on category management.
NEW QUESTION # 275
Of the following, the BEST way for supply management to effectively support stakeholders is to ensure that
- A. communications are tailored to each stakeholder
- B. goals are given precedence over a team environment
- C. communications with stakeholders are held face-to-face
- D. stakeholders are regarded as equally important
Answer: A
Explanation:
The best way for supply management to effectively support stakeholders is to ensure that communications are tailored to each stakeholder. Tailoring communications means providing relevant information in a manner that each stakeholder understands and values. This approach ensures clarity, fosters engagement, and meets the unique needs of each stakeholder, thereby enhancing collaboration and support.
References
* "Effective Communication Skills for Scientific and Technical Professionals," Harry E. Chambers.
* "Managing Stakeholders as Clients: Sponsorship, Partnership, Leadership, and Citizenship," Mario Henrique Trentim.
NEW QUESTION # 276
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