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

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 3

A service provider has experienced diminished value and stagnant results within an important category. Which of the following is the BEST course of action the firm can take to improve the category strategy?

Options :

A : Open existing contracts and retender them

B : Network with suppliers and launch RFIs to look at alternative solutions

C : Conduct category rotation to bring a different viewpoint to the management of the category

D : Conduct an in-house survey with key stakeholders

Answer: C

Question 4

A buyer wishes to stop future shipments of goods from a supplier who has failed to meet the delivery schedule for several months. The buyer wishes to retain the ability to seek damages resulting from the supplier's failure to perform. In this case, the buyer's BEST option is to employ which of the following?

Options :

A : Reservation of Rights

B : Termination for Convenience

C : Repudiation

D : Termination for Cause

Answer: D

Question 5

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

Confidently Practice Online with Free CORE Exam Cram

Buying Options: