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ISM Supply Management Core Exam Sample Questions (Q93-Q98):

NEW QUESTION # 93
A firm's supply manager is asked by the engineering department to replace a chemical used in a majority of products made by the firm. The current chemical is Imported and has components that are highly regulated.
Engineering wants to replace it with a chemical that uses non-hazardous domestic materials. This chemical would still have to be reported and customers would have to be notified of the change. Initial tests indicate that the new chemical is as effective as the old one. In this situation, which of the following should be the FIRST step taken by the supply manager?

A. Perform a total cost analysis of the recommended new formula
B. Update the project folder and timeline for implementation
C. Check if the proposed supplier is ISO 14000 certified
D. Notify all customers of the proposed change

Answer: A

Explanation:
* Identify the Change Requirement: The engineering department wants to replace a highly regulated imported chemical with a domestic, non-hazardous alternative.
* Evaluate the Impact:
* Assess the cost implications of switching chemicals, including sourcing, handling, and compliance costs.
* Consider the impact on production processes, product quality, and customer acceptance.
* Total Cost Analysis: Performing a comprehensive total cost analysis will provide a clear picture of all associated costs, ensuring that the decision is financially sound and aligns with the company's strategic objectives.
* Subsequent Steps: If the cost analysis is favorable, update project timelines, check supplier certifications, and notify customers. References:
* Total Cost of Ownership (TCO) Analysis Frameworks
* Chemical Supply Chain Management
* Best Practices in Supplier Evaluation and Selection

NEW QUESTION # 94
An earthquake destroys a major manufacturing plant that produces sneakers. The manufacturing plant for rubber, a complementary good to sneakers, is unaffected by the earthquake. What is the result?

A. The equilibrium quantity of sneakers decreases, and the equilibrium quantity of rubber increases.
B. The equilibrium quantity of sneakers increases, and the equilibrium quantity of rubber decreases.
C. The equilibrium quantity for both products decreases.
D. The equilibrium quantity for both products remains the same.

Answer: C

NEW QUESTION # 95
A buying firm receives samples from a supplier. The samples pass endurance testing, and a production batch is ordered and received. Soon after, it is found that the production parts break much sooner than the samples did.
The supplier claims the life requirements of the parts are not stated in the warranty clause of the contract and thus denies liability.
Which of the following is TRUE in this situation?

A. Express warranties only apply to products inspected immediately upon receipt, and thus the buyer is not protected.
B. If the life expectancy of the product is not clearly defined in the product specifications, there Is no protection.
C. Express warranties are only specific assurances documented by the seller, and if quality is not documented, the buyer is not protected.
D. Express warranties may be in the form of a sample, and therefore the buyer is protected.

Answer: D

Explanation:
* Express Warranties: These are explicit guarantees made by the seller regarding the quality or performance of the goods.
* Form of Warranty: An express warranty can be communicated through various forms, including samples, descriptions, and affirmations of fact.
* Implication of Samples: When a buyer receives a sample and bases their purchasing decision on it, the sample sets an expectation for the production batch.
* Protection Under Law: According to the Uniform Commercial Code (UCC) in the United States, if the seller provides a sample, the actual goods delivered must match the quality of the sample.
* Conclusion: Given the parts received do not meet the quality of the samples provided, the buyer is protected as the samples served as an express warranty. References
* Uniform Commercial Code (UCC) Article 2, Section 2-313.

NEW QUESTION # 96

Which of the following formulas in Excel would correctly calculate the mean of the data below? (Select all that apply.)

A. =MEDIAN(B2:B13)
B. =SUM(B2:B13)/12
C. =MEAN(B2:B13)
D. =MODE(B2:B13)
E. =AVERAGE(B2:B13)

Answer: B,E

NEW QUESTION # 97
The use of procurement cards to simplify purchases of low cost/low complexity items is BEST suited for which of the following categories of spend?

A. Strategic
B. Leverage
C. Tactical
D. Critical

Answer: C

NEW QUESTION # 98
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