ISM Leadership and Transformation in Supply Management - LEAD Exam Practice Test
The chief procurement officer (CPO) for a large municipal government obtains funding for a new e-procurement system. After the system has been operational for a year, the city council's finance committee requests a status report, with emphasis on whether or not the system has realized projected benefits. Future funding for e-procurement depends on whether the council is satisfied with progress. Though the system has yielded many positive results, savings have not yet met expectations. Given this situation, which of the following is the BEST approach for the CPO to take to address the council's concerns?
Correct Answer: A
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Members of a cross-functional team have each had a chance to present their ideas. Afterwards, the members discuss these ideas in detail, on occasion arguing and testing one another. After this process is complete, the team can move on to which phase of team formation?
Correct Answer: D
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A company establishes a standard cost of $2.50 for aluminum widgets used in various production processes. The firm experiences a purchase price variance of $30,000 on 200,000 units purchased during the quarter. What was the average price paid for each widget?
Correct Answer: B
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CDE, Inc. designates a team comprised of finance and procurement professionals to develop and implement a "No PO/No Pay" policy for the organization. The goal is for the firm to have 100% purchase order (PO) usage. The team spends twelve months re-structuring processes, defining metrics, and conducting employee training sessions on the policy. However, six months after launch, the level of PO adoption shows only a modest increase from 9% to 12%. Which of the following could the team have done to BEST ensure greater success in this initiative?
Correct Answer: A
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UVW, Inc. and Supplier Y have enjoyed a healthy long-term relationship. The two organizations routinely share information and jointly support continuous improvement.
In recent months, UVW and Supplier Y's sales, supply management, and engineering teams have been co-developing a new product that would position them uniquely in their market segment. Price and terms have been agreed upon, and the contract is now in its final stages. However, when UVW's team presents the finalized deal to its senior management, they express displeasure with Supplier Y, and the deal is put on hold until further evaluation.
Which of the following is the MOST likely reason this occurred?
In recent months, UVW and Supplier Y's sales, supply management, and engineering teams have been co-developing a new product that would position them uniquely in their market segment. Price and terms have been agreed upon, and the contract is now in its final stages. However, when UVW's team presents the finalized deal to its senior management, they express displeasure with Supplier Y, and the deal is put on hold until further evaluation.
Which of the following is the MOST likely reason this occurred?
Correct Answer: A
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A firm's five-year strategic plan forecasts annual sales revenue growth primarily based on product quality improvements. The firm's chief procurement officer (CPO) wants to monitor supply management's contribution to the plan by applying business intelligence. Which of the following is the BEST way for the CPO to achieve this objective?
Correct Answer: B
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A firm's supply manager issues a new set of procurement policies. Shortly thereafter, the supply manager learns that a former team leader is giving department employees instructions in conflict with updated policies. The former team leader is well-respected, and the department employees are beginning to question whether the supply manager's new policies are correct. Which of the following is the FIRST step the supply manager should take to address this situation?
Correct Answer: D
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A supply management audit finds that sole source purchases have increased significantly due to the inexperience of the sourcing team, and that the waiving of competition is not justified in many cases. This has resulted in increased costs, as well as noncompliance with organizational policies requiring competitive solicitations. Which of the following is the BEST way to rectify this situation?
Correct Answer: A
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Which of the following is considered a "right-to-know" requirement concerning hazardous substances?
Correct Answer: D
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JKL, Inc. has traditionally sourced most of its raw materials and components from long-established domestic suppliers. Lately, however, the firm has had a growing reliance on off-shore suppliers. JKL's supply manager is concerned that this will change how risks are monitored and managed. Which of the following should the supply manager do FIRST?
Correct Answer: B
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CDE, Inc. is a U.S.-based sporting apparel company. CDE contracts with a manufacturer in another country to produce a specialized line of clothing. In the first few months, sales of the new line are very disappointing. It is then discovered that the manufacturer is marketing counterfeit copies of the new line in the U.S. and abroad, thus undercutting CDE's pricing and damaging its reputation. Given this situation, which of the following should CDE do FIRST?
Correct Answer: D
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A government entity emphasizes that preference be given to businesses owned by individuals with disabilities.
This organization's actions can be BEST characterized as
This organization's actions can be BEST characterized as
Correct Answer: B
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A buyer from BCD, Inc. meets with an industry peer at a professional conference and tells the peer that Supplier X provides a low quality product, when in fact Supplier X provides a high quality product. The buyer makes the statement in the hope of retaining BCD's competitive edge, but as result of the conversation, the peer removes Supplier X from participation in an upcoming RFP. The buyer's statement can BEST be described as
Correct Answer: B
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A tech company creates several innovative software programs for internal usage, including a program that streamlines supply chain management. To leverage its efforts, the company markets a version of this program. An important potential customer asks the supply manager about future enhancements to the software. While such updates are in progress, they have not been announced. Given this situation, which of the following is the BEST course of action for the supply manager to take?
Correct Answer: A
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