Leadership and Transformation in Supply Management (LEAD) Free Practice Test

Question 1

MNO, Inc. is developing a five-year business plan. The organization's vision, mission and value statements have been established. Which of the following should the organization do NEXT?

A. Develop goals and objectives

B. Develop a communication plan for the statements

C. Develop pricing models for goods and/or services

D. Develop plans to achieve goals and objectives

Correct Answer: A

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Question 2

Which of the following is the FIRST step that a supply manager should take to ensure proper social responsibility in the management of regulated materials?

A. Embed contract language with criteria to handle disposal of regulated materials

B. Determine the relevant regulatory agency criteria to follow

C. Implement a proactive approach when considering regulated materials

D. Select only certified suppliers for sourcing events

Correct Answer: B

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Question 3

A supply management audit finds that sole source purchases have increased significantly due to the inexperience of the sourcing team, and that the waiving of competition is not justified in many cases. This has resulted in increased costs, as well as noncompliance with organizational policies requiring competitive solicitations. Which of the following is the BEST way to rectify this situation?

A. Train staff in solicitation policies and practices

B. Make sole source review a key performance indicator (KPI)

C. Improve audit procedures to identify problem areas sooner

D. Report noncompliance to management in user departments

Correct Answer: A

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Question 4

Which of the following requires a working knowledge of payback and net present value?

A. Indirect (MRO) budget

B. Capital expenditures budget

C. Purchasing and supply operating budget

D. Direct materials and services budget

Correct Answer: B

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Question 5

DEF, Inc. does not have a firm control of expenditures, and its global procurement department does not have a strong reputation within the organization. DEF asks the supply manager to centralize the procurement organization, engage stakeholders, and educate the organization on the value of procurement. Which of the following should the supply manager do FIRST to ensure proper engagement and adherence to policies?

A. Create a global communication plan

B. Communicate the procurement policy

C. Validate the current procurement structure

D. Communicate a global procurement vision

Correct Answer: D

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Question 6

TUV, Inc. is acquiring Company A. As part of this acquisition, TUV's supply management department must review all of Company A's current contracts and agreements to ascertain how smoothly they can be transferred to TUV.
Which of the following should be supply management's FIRST area of interest?

A. Assignment consent

B. Due diligence

C. Financial assessments

D. Liability exposure

Correct Answer: A

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Question 7

A supply chain's stability, as well as its ability to continue business or recover from a major disruption, is BEST predicted by

A. the location of a primary supplier in relation to its sub-tier suppliers

B. the amount a primary supplier purchases from sub-tier suppliers

C. the financial strength of primary suppliers

D. how a primary supplier manages its sub-tier suppliers

Correct Answer: D

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Question 8

A company's human resources manager feels that the HR department can obtain indirect services efficiently and that centralizing their purchases through supply management adds no value. Which is of the following is the BEST response supply management can make to these claims?

A. Quantify procurement's indirect spend savings

B. Validate procurement efficiency metrics with finance

C. Implement an earned value management system

D. Eliminate bottlenecks at critical processes

Correct Answer: A

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ISM Leadership and Transformation in Supply Management (LEAD) Free Practice Test