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ISM Supply Management Core Exam Sample Questions (Q282-Q287):

NEW QUESTION # 282
NXY, Inc. is a manufacturer of metal castings. The firm contracts with Supplier Y to help meet WXY's supplier diversity initiative. Initially, Supplier Y has no issues meeting just-in-time scheduling and quality goals. However, after several months, the engineering lab finds inconsistent metallurgy and dimensional tolerance issues with Supplier Y's components. The firm's production manager is willing to assist Supplier Y.
Given this situation, which of the following courses of action should WXY's supply manager take?

A. Assign a Six Sigma black belt from WXY to help Supplier Y find the root cause of the problems and institute procedures to improve quality
B. Request that WXY's senior management hold a conference call with Supplier Y and inform it that the quality issues need to be resolved immediately
C. Replace Supplier Y, as trying to improve its performance will likely be a waste of time and resources
D. Assign specialists in lean manufacturing from WXY to develop Supplier Y into a lean manufacturing organization

Answer: A

Explanation:
* Initial Performance: Supplier Y initially met quality and scheduling goals, indicating potential for capability.
* Quality Issues: The emergence of quality issues necessitates a structured problem-solving approach.
* Six Sigma Black Belt: A Six Sigma Black Belt is trained in identifying root causes and implementing process improvements.
* Long-term Improvement: Assigning a Six Sigma expert will help Supplier Y develop sustainable quality improvement processes, aligning with WXY's supplier diversity initiative and long-term goals.
* Supportive Approach: This approach is supportive rather than punitive, fostering supplier development and collaboration. References
* ASQ (American Society for Quality) guidelines on Six Sigma methodologies.

NEW QUESTION # 283
After thorough market research, a company discovers that there are three well-defined customer segments for a new product it plans to release. Customer segment A represents young professionals, who each have a willingness to pay (WTP) of $45. Customer segment B represents college students, who each have a WTP of $25. Customer segment C represents mid-career professionals, who each have a WTP of $100. What price should the company charge for its new product in order to maximize revenues? Assume that each customer segment has the same number of individual customers.

A. $45
B. $25
C. $70
D. $100

Answer: D

Explanation:

NEW QUESTION # 284
DEF, Inc. conducts a Request for Information (RFI) to identify suppliers who will be invited to participate in a Request for Proposal (RFP) for technical support. The RFI requires audited financial statements. DEF receives an inquiry from a publicly traded supplier asking if their 10K statement will suffice, and a privately held supplier states that it will only provide its audited financial statement after receiving a nondisclosure agreement from DEF.
Given this situation, which of the following is the BEST course of action for DEF to take?

A. Negotiate with all respondents for more financial information
B. Issue a revision to the current RFI listing alternate methods and conditions acceptable in demonstrating financial health
C. Maintain the requirement for audited financial statements so that all respondents are graded on the same basis
D. State that DEF reserves the right to use information other than that received in response to the RFI to evaluate respondents' financial condition

Answer: B

Explanation:
The best course of action for DEF, Inc. is to issue a revision to the current RFI, listing alternate methods and conditions acceptable in demonstrating financial health. This approach accommodates the concerns of both publicly traded and privately held suppliers, ensuring a fair and inclusive process. It maintains the requirement for financial health demonstration while providing flexibility in how suppliers can meet this requirement.
References:
* "Request for Proposal: A Guide for Effective RFP Process" by Bud Porter-Roth.
* Guidelines on RFIs and RFPs from the National Institute of Governmental Purchasing (NIGP).
* "Procurement Principles and Management" by Peter Baily, David Farmer, Barry Crocker, and David Jessop.

NEW QUESTION # 285
A criminologist wants to investigate the relationship between income, gender composition, and the number of violent crimes. The criminologist collects data from the 50 U.S. states on the number of violent crimes committed in 2012, the percentage of the population that is male, andper capita income in each state. Regression results and residual plots for the regression are provided below.

The criminologist find that the correlation between the percent of the population that is male and per capita income is -0.053. Aside from the fact that neither slope coefficient is statistically significant, what other regression issue is MOST likely occurring in this model?

A. Multicollinearity
B. Homoskedasticity
C. Lagged variables
D. Heteroskedasticity

Answer: D

NEW QUESTION # 286
MNO, Inc. purchases benchmarking data services from Supplier X, which is the sole source for data relevant to MNO's industry. In recent months, Supplier X's pricing has increased and its technical support has worsened. MNO's supply manager is preparing to negotiate for contract renewal with Supplier X and needs to resolve these concerns. Which of the following is the BEST course action for the supply manager to take before conducting negotiations?

A. Develop win-win scenarios to add long-term value in a collaborative relationship
B. Revise the Service Level Agreement (SLA) with Supplier X, with penalties for non-performance
C. Determine whether data can be collected from other sources, to bring the services in-house
D. Compare Supplier X's rates against similar services to establish reasonable costs

Answer: A

Explanation:
* Identify the Issues: The supply manager should first clearly outline the specific issues with Supplier X, such as the price increases and declining technical support.
* Develop Win-Win Scenarios: Before entering negotiations, it is essential to develop scenarios that can
* create mutual benefits for both MNO, Inc. and Supplier X. This approach fosters a collaborative relationship rather than an adversarial one.
* Long-term Value: By focusing on long-term value, the supply manager can address the current issues and also set a precedent for future interactions. This may involve proposing solutions like better support mechanisms or more favorable pricing structures in exchange for commitments from MNO.
* Collaborative Relationship: Building a collaborative relationship helps in negotiating terms that are beneficial and sustainable for both parties. This includes working together to find efficiencies or improvements that can lead to cost savings or enhanced service levels.
References:
* CIPS: "Guide to Supplier Relationship Management"
* ISM: "Negotiation Strategies for Long-Term Supplier Relationships"

NEW QUESTION # 287
......

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Don West Don West

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