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  • Exam Name: Supply Management Core Exam
  • Last Update: 15-Jun-2024
  • Questions and Answers: 180
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CORE Questions and Answers

Question # 1

When developing a supplier exit strategy, which of the following is generally considered the MOST important internal consideration?

A.

Minimizing termination penalties

B.

Developing and enforcing policies

C.

Obtaining the lowest possible price

D.

Maintaining continuity of supply

Question # 2

A manufacturing company with plants and suppliers in numerous locations wants to cut its travel budget for the next year by 20%. Which of the following is MOST likely to help reduce travel costs?

A.

Expanding use of video conferencing as an alternative to travel

B.

Obtaining discounts from preferred providers of travel services

C.

Lowering the allowable per diem

D.

Sending an individual rather than a team when conducting site visits

Question # 3

A manufacturer develops a new product that will be more efficient and easier to use than previous versions. Prototypes are created, evaluated, and approved, and the company begins large scale

production.

Three months into production, costs rise beyond expectations, due to one of the raw materials not providing the economies of scale predicted by the design team. This results in a net loss at the

recommended price point. Which of the following actions should the design team have taken to prevent this situation?

A.

Renegotiate price and find other suppliers to offset the high costs

B.

Collaborate with the supplier in the design process to understand the production method

C.

Create a larger number of prototypes for testing and evaluation before going to large scale production

D.

Buy the raw material in bulk

Question # 4

At what point in a business relationship with a supplier should discussions be held about which party has responsibility for specific costs, in the event the relationship needs to end?

A.

At any point in the relationship

B.

At no point in the relationship

C.

When the relationship needs to end

D.

In the beginning of the relationship

Question # 5

A company buys electronic connectors in lot sizes of 5000 units at a price of $1.00 per unit, including freight. This connector has an annual usage of 80,000 units. The carrying cost is 25% per year. Assuming a constant consumption rate, what are the annual carrying costs for the connectors?

A.

$7250

B.

$625

C.

$5000

D.

$1875

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