ISM Leadership and Transformation in Supply Management - LEAD Exam Practice Test

A risk management program for a fast food chain finds a high probability of legal action due to possible food poisoning. Accordingly, the firm establishes legal plans to address potential lawsuits. This is a mitigation step for which type of risk?

A company has a strict policy of limiting employee gifts from suppliers to no more than S25. An employee violates this policy by accepting an $80 ticket to a sporting event from a regular supplier. Given this situation, which of the following is the BEST course of action for this employee's supervisor to take?

DEF, Inc. is finalizing a contract to have its head office refurbished. Within its budget of $1.2 million there is a general risk fund of $30,000. The building is old, and the electrical wiring drawings do not appear up to date. The total project bid from Supplier X is $1 million. This includes a fee of $20,000 for updating electrical wiring drawings and the contractors' risk fund of $100,000, half of which is for building-related issues, and half of which is for electrical issues.
DEF decides to assume the risk of electrical issues. What is the contract price paid to Supplier X?

Which of the following refers to the identification, analysis, determination, procurement and fulfillment of the goods and services an organization needs to meet short- and long-term objectives?

A buyer for TUV, Inc. transfers to headquarters from one of the company's subsidiaries. The buyer creates performance concerns for the department by ignoring policies regarding attendance, failing to document transactions properly and lacking focus. The department manager learns that the buyer did not receive training following the transfer because TUV's policies and procedures at headquarters differ only slightly from those within the divisions. Given this situation, which of the following is the BEST course of action for the department manager to take?

MNO, Inc. hires a contractor to renovate its office space. The firm pays a deposit for new countertops for the office's cafeteria, but the contractor states that it will not be able to install the new countertops by the agreed upon date. The space needs to be completed on time for a planned grand opening event. Which of the following is the BEST course of action for MNO to take?

The supply manager for a decentralized supply management organization is looking to transition the department's current buyers into category managers. The supply manager wishes to make these changes with minimal organizational disruption. Which of the following arrangements would BEST accomplish this goal?

XYZ Company has expanded its operations into two new countries over the past six months. Due to the cultural differences within the new countries, the firm's senior manager of procurement believes that qualitative key performance indicators (KPIs) need to be collected along with existing quantitative KPIs in order to accurately measure the success of the firm. XYZ has never used qualitative KPIs in the past. Given this situation, which of the following should the senior manager do before proposing the qualitative KPIs to the executive team?

Which of the following integrates various functions within an organization, including forecasting, materials management and purchasing?

A procurement manager for JKL, Inc. wants to integrate the firm's three procurement teams. The teams are located in different countries and employ over one hundred staff members in total. The manager wants to use technology-driven processes to analyze data across all three countries and develop a data visualization approach to be used in communications with senior management. Given this situation, which of the following is the BEST course of action for the procurement manager to take?

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?

A company determines it may be subject to potential loss of intellectual property in several supplier contracts. This can be BEST described as what type of risk?

A supply manager recently graduated from college is hired by a manufacturing organization as a buyer of industrial chemicals. The new supply manager has limited knowledge of chemicals and the marketplace. In this situation, which of the following is the FIRST step the supply manager should take?

A water bottling company pays a third party $0.05 each for its tamper-evident bottle closures. This cost can BEST be described as