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ISM Supply Management Core Exam Sample Questions (Q64-Q69):

NEW QUESTION # 64
An airline company wants to improve its understanding of its product and customers. Using an internal model, the company predicts that business class revenues will decrease if the price of business class is reduced, but coach class revenues will increase if the price of coach class is reduced. Why might this be the case?

A. There are too many business class seats in the airplane.
B. Business class travel is a luxury good.
C. Coach travelers typically have a lower opportunity cost of time than business travelers.
D. Coach travelers often pay out of their own pocket, whereas business travelers do not.

Answer: C

NEW QUESTION # 65
A supply manager for TUV, Inc. contracts with a new supplier of a critical raw material. After receiving several shipments, TUV's manufacturing team finds too much variation in the material dimensions. A meeting is held between the engineering and quality staffs of both companies to discuss the situation. Which of the following should the supply manager do NEXT?

A. Suggest that the engineering and quality staffs visit the supplier's facility to review processes
B. Change the supplier from the approved list to probationary status and cancel current orders
C. Assess a financial penalty against the supplier for shipping uncertified materials
D. Return the unacceptable material and demand a replacement shipment that meets all specifications

Answer: A

NEW QUESTION # 66
A supply manager Is leading a project to implement a change from a common grade material to a newer grade that improves performance and achieves cost savings. The project team includes representatives from engineering, quality, sales, product development, and cost accounting. Two suppliers capable of producing the new material have been identified and proposals have been received. The project is now approaching the final implementation phase. Which of the following should be the NEXT step in the process?

A. Prepare purchase requisitions with estimated volumes for the two suppliers
B. Conduct a phase-out meeting with all stakeholders and determine which supplier will be awarded the business
C. Submit a report to senior management explaining the status of the project with an expected completion date
D. Have each stakeholder report its position on the success criteria established at the initial project meeting

Answer: B

Explanation:
The next step in the process is to conduct a phase-out meeting with all stakeholders to finalize the decision on which supplier will be awarded the business. This meeting allows the project team to review the proposals, discuss any final concerns, and make a collaborative decision based on the success criteria established at the initial project meeting. It ensures that all aspects, including performance, cost savings, and any potential risks, are considered before awarding the contract to the selected supplier. References:
* Project Management: A Systems Approach to Planning, Scheduling, and Controlling by Harold Kerzner.
* Strategic Supply Management: Principles, Theories and Practice by Paul Cousins, Richard Lamming, Benn Lawson, and Brian Squire.

NEW QUESTION # 67
What is the approximate poverty rate for the outlier in the scatterplot below?

A. 25%
B. 53%
C. 10%
D. 18%

Answer: D

NEW QUESTION # 68
A chemical company develops a new product that relies heavily on quartz, a common and abundant mineral.
The company believes that the new product is critical to its financial success and future growth. In developing a sourcing strategy for quartz, the company supply manager should focus PRIMARILY on

A. reducing exposure to price increases or supply disruption
B. streamlining the supply management process to achieve efficiency
C. using volume and economies of scale to minimize price
D. ensuring long-term availability of supply

Answer: D

Explanation:
For a chemical company that relies heavily on quartz, which is a common and abundant mineral, the supply manager should focus PRIMARILY on A. ensuring long-term availability of supply. This focus is crucial because the success and growth of the new product depend on the consistent availability of quartz. While price and efficiency are important considerations, the primary concern should be securing a reliable supply chain that can support the company's long-term production needs12.

NEW QUESTION # 69
......

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