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Supply Management Core Exam

Last Update Jun 17, 2024
Total Questions : 180

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Supply Management Core Exam Questions and Answers

Questions 1

CBA Incorporated is an up-and-coming automobile manufacturer. CBA issues a request for proposal (RFP) for a supplier of a new radiator, to be designed by the supplier in accordance with specifications created by CBA. Two bidders are Interested: Supplier X, with whom CBA currently does business, and Supplier Y, who is new to CBA. The firm plans to make the chosen supplier a single source for all of CBA's radiators in return for collaborative design development and open book pricing, so that profit margins can be agreed to and set. The suppliers respond to the RFP, and Supplier X quotes a much higher price than Supplier Y. Given this situation, which of the following should CBA do?



Conduct a should cost analysis for the radiator and offer the contract to the supplier that can meet the cost and the design specifications


Contract with Supplier Y, as it is offering a lower price than Supplier X


Engage Supplier X in negotiations with senior management about the merits of a win-win strategy and the opportunities that CBA is offering in terms of volume


Inform Supplier X that the should cost price is the final offer, and terminate negotiations and source elsewhere if Supplier X refuses to accept the offer

Questions 2

A manufacturer develops a new product that will be more efficient and easier to use than previous versions. Prototypes are created, evaluated, and approved, and the company begins large scale


Three months into production, costs rise beyond expectations, due to one of the raw materials not providing the economies of scale predicted by the design team. This results in a net loss at the

recommended price point. Which of the following actions should the design team have taken to prevent this situation?



Renegotiate price and find other suppliers to offset the high costs


Collaborate with the supplier in the design process to understand the production method


Create a larger number of prototypes for testing and evaluation before going to large scale production


Buy the raw material in bulk

Questions 3

At what point in the development of a category strategy should spend review occur?



After key internal stakeholders agree on sourcing priorities


After development of the sourcing team


After presentation of the strategy to senior management


During validation of the savings or contribution