Question 1

A procurement specialist reviews a report from a financial agency about a potential supplier. The report reveals that the supplier had a lien against some of its assets a few years ago, that the supplier has had several delayed payments over the last few months, and that the supplier's debt-to-equity ratio equals 2.0. Which of the following is the BEST course of action for the procurement specialist to take?

Options :

A : Inform senior management of the potential supplier-s financial status

B : Exclude the supplier from the bidding process

C : Inform current suppliers about the potential supplier-s financial status

D : Use the information in considering whether to qualify the supplier

Answer: D

Question 2

A company's major supplier of sub-assemblies provides excellent quality and reasonable costs. However, shipping delays and damage in transit make this supplier less reliable than desired. The supply manager would like to retain this supplier if possible, but is concerned about the reliability issues. Given this situation, which of the following is the BEST course of action for the supply manager to take?

Options :

A : Negotiate lower prices to compensate for the impact of delivery problems

B : Collaborate with the supplier to improve its outbound logistics

C : Increase forecasting lead times and safety stock for the supplier-s products

D : Give the supplier a deadline by which to remedy unsatisfactory performance

Answer: B

Question 3

Which of the following is the MOST important reason for supply management to share company business plans with current and prospective suppliers?

Options :

A : To set the stage for supplier concessions and discounts

B : To remind suppliers how important supply management is to their success

C : To show suppliers the benefits of investing time and resources into the relationship

D : To prevent any problems or misunderstandings in the buyer/supplier relationship

Answer: C

Question 4

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

Question 5

Which of the following contract types is an agreement to pay a specified price when the items or services have been delivered and accepted?

Options :

A : Incentive

B : Fixed price incentive

C : Firm fixed price

D : Cost

Answer: C

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