2025 ISM - CORe - Supply Management Core Exam Download Demo
2025 ISM - CORe - Supply Management Core Exam Download Demo
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ISM Supply Management Core Exam Sample Questions (Q160-Q165):
NEW QUESTION # 160
RST, Inc. has been purchasing custom parts from Supplier X for a number of years. RST wishes to exit from its relationship with Supplier X and switch to another supplier. In this situation, which of the following is the BEST course of action for RST to take?
- A. Purchase items from a new supplier while continuing to buy from Supplier X
- B. Stop purchasing from Supplier X Immediately
- C. Wait until demand is lower to exit from Supplier X
- D. Require that a new supplier provide sample items prior to purchasing from them
Answer: A
NEW QUESTION # 161
A supply manager wants to develop a strategy to facilitate supplier Innovation. Which of the following is MOST likely to achieve this goal?
- A. Awarding contracts only to the most innovative companies
- B. Locating new suppliers that lead their industry
- C. Leveraging innovations from one supplier to improve all other suppliers
- D. Recognizing current suppliers for innovative performance
Answer: D
Explanation:
To facilitate supplier innovation, the supply manager should focus on strategies that encourage and recognize innovative efforts:
* Locating new suppliers that lead their industry is useful but may not leverage existing relationships.
* Recognizing current suppliers for innovative performance encourages ongoing innovation by rewarding and highlighting successful efforts.
* Leveraging innovations from one supplier to improve all other suppliers can be effective but depends on the willingness of suppliers to share innovations.
* Awarding contracts only to the most innovative companies could limit the pool of potential suppliers and may not be practical.
Recognizing current suppliers for innovative performance is likely the most effective strategy. It motivates suppliers to continuously improve and innovate by providing them with acknowledgment and potential rewards.
References:
* CIPS (Chartered Institute of Procurement & Supply) literature on supplier innovation.
* Institute for Supply Management (ISM) best practices for fostering supplier innovation.
NEW QUESTION # 162
Consider the following supplier terms for the same product:
Supplier A:2%/15, Net 30
Supplier B:4%/5, Net 30
Which supplier's terms are more advantageous to the buying organization?
- A. Supplier A
- B. Supplier B
- C. Cannot be determined based on the above information
- D. The terms are equivalent
Answer: B
Explanation:
Supplier B's terms of 4%/5, Net 30 are more advantageous. This means a 4% discount is available if the invoice is paid within 5 days, whereas Supplier A offers a 2% discount for payment within 15 days. Paying early (5 days) to get a 4% discount is more beneficial in terms of cost savings compared to a 2% discount for paying within 15 days. The greater discount percentage within a shorter period represents better cash flow management and cost savings.
References:
* Financial Terms in Procurement
* Cash Flow Management Techniques in Supply Chain
NEW QUESTION # 163
A supply manager of a U.S. publicly listed company is conducting an internal audit of the procurement department to ensure compliance with applicable laws and regulations. Top management has communicated the importance of financial reporting and effective controls within the organization's procurement processes. In order to carry out the audit in alignment with top management's direction, the supply manager should be particularly familiar with which of the following?
- A. Sherman Antitrust Act
- B. Sarbanes-Oxley Act
- C. Uniform Commercial Code
- D. Federal Trade Commission Act
Answer: B
Explanation:
The Sarbanes-Oxley Act is critical for a supply manager conducting an internal audit of the procurement department in a U.S. publicly listed company. This act mandates strict reforms to improve financial disclosures and prevent accounting fraud. It includes provisions for enhanced financial reporting, internal controls, and auditor independence. Familiarity with the Sarbanes-Oxley Act ensures that the procurement processes comply with these stringent regulations, enhancing transparency and accountability.
References
* The Sarbanes-Oxley Act of 2002
* SEC (Securities and Exchange Commission) guidelines
* Compliance Week articles on SOX compliance
NEW QUESTION # 164
A supply manager for UVW, Inc. Is considering the use of lead division buying. Which of the following factors is MOST supportive of such efforts?
- A. Several divisions use consistent quantities of the same item.
- B. There is ongoing involvement of the engineering department.
- C. Each division needs products tailored to its own production.
- D. Deliveries must be coordinated with production schedules.
Answer: A
NEW QUESTION # 165
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