Question 1

According to the Law of Agency, a supply manager acting as an agent makes decisions and acts in whose interest(s)?

Options :

A : The interests of the profession

B : His/her personal interest

C : The interest of the organization that employs him/her

D : The interests of the supplier which overlap with those of the buyer

Answer: C

Question 2

An organization is preparing its budget for the next fiscal year. Management challenges the procurement teamto reduce MRO purchasing costs. The procurement team has reduced the janitorial services budget by 2.5%, but corporate management wants a 5% reduction. Which of the following is the BEST approach for the team to take in order to meet management's expectation?

Options :

A : Demand that the current supplier reduce costs to meet the required budget

B : Contact the current supplier and develop a solution to reduce costs

C : Send out a request for quotation (RFQ) to all possible qualified suppliers

D : Conduct a root-cause analysis, and then negotiate with the current supplier

Answer: B

Question 3

A supply manager Is conducting negotiations with a supplier. The supplier states that it cannot offer a lower price because the product under negotiation is covered by a government contract. In this situation, the supply manager should

Options :

A : offer to reduce the order quantity

B : negotiate the other terms and conditions, and return to the issue of price at a later time

C : conclude that this is in fact the best price that the supplier can legally offer

D : require the supplier to provide specifics on the government contract restrictions

Answer: D

Question 4

A machining company outsources its recycling program to a third party. The third party recycles the metals from the production area, but neglects to recycle the aluminum cans from the break room, as this stipulation was not included in the service-level agreement. This situation is MOST likely a result of the supply manager's failure to have an appropriate

Options :

A : scope of work

B : performance goal

C : warranty

D : conflict management plan

Answer: A

Question 5

A supply manager is trying to leverage spend on travel and meeting services for a series of conferences to be held at various locations. The specifics of the conferences will vary according to location and cultural considerations. The organization seeks the best solution to help the conferences succeed. In this situation, which of the following will be MOST appropriate?

Options :

A : Request for Information (RFI)

B : Invitation for Bid (IFB)

C : Request for Proposal (RFP)

D : Non-competitive negotiations

Answer: C

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