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ISM Supply Management Core Exam Sample Questions (Q168-Q173):

NEW QUESTION # 168
Consider the following data for four separate machines:
Purchase PriceProjected Annual SavingsEstimated Life (in years)
Machine W$100,000$17,0006
Machine X$112,000$23,0007
Machine Y$143,000$19,0009
Machine Z$150,000$25,0008
Which machine produces the HIGHEST simple return on investment (ROI) over its useful life?

A. W
B. X
C. Y
D. Z

Answer: B

NEW QUESTION # 169
A supply manager issues a Request for Quotation (RFQ) for software development services. Two suppliers respond to the solicitation, and both suppliers' quotes are well above the target range. In this situation, which of the following is the FIRST course of action the supply manager should take?

A. Negotiate with both suppliers to attempt to meet the target cost
B. Use a BATNA option and look to develop the software in-house
C. Postpone any negotiations with the bidders and ask the firm's stakeholders to look for ways to reduce the project scope
D. Share the target range with the providers and ask for requotes

Answer: A

NEW QUESTION # 170
DEF Inc. receives several batches of inferior quality products from a supplier. Although all of the samples provided by this supplier met or exceeded specifications, it is learned that the facility used to produce the samples is in a different location than the regular production facility, and that the production environment could affect quality.
DEF could have prevented this situation by doing which of the following?

A. Requiring the supplier to provide assurance that its products will meet the required specifications
B. Requesting and testing samples from all possible supplier manufacturing locations
C. Placing stricter quality controls in the receiving dock to prevent defective products from being accepted into inventory
D. Requesting larger samples from the supplier prior to going into production

Answer: B

Explanation:
* Requesting and Testing Samples from All Possible Supplier Manufacturing Locations: This would have ensured that DEF Inc. tested the quality of products from the actual production facility, not just the sample facility.
* Requesting Larger Samples: While this might help, it doesn't address the issue of different production environments potentially affecting quality.
* Requiring Assurance from Supplier: This is important but not sufficient by itself. The assurance doesn't substitute for actual testing from the correct facility.
* Stricter Quality Controls at Receiving Dock: This is a reactive measure and doesn't prevent the
* problem from occurring in the first place.
References
* Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning.
* Burt, D. N., Petcavage, S. D., & Pinkerton, R. L. (2010). Supply Management. McGraw-Hill Education.

NEW QUESTION # 171
A rapidly-growing food service company Is creating a service level agreement (SLA) for laundry services. The current supply base has invested in new machines. Which of the following should be the PRIMARY focus area of the new SLA?

A. Distance from the company
B. Quality
C. Supplier capacity
D. Cost

Answer: B

NEW QUESTION # 172
A pharmaceutical company is developing a drug that aims to reduce the recovery time (in days) for a particular illness. To test the effect, the company gives 200 randomly selected patients a placebo and 200 randomly selected patients the new drug. The findings from the study are provided below.

Based on this output and a confidence level of 95%, which of the following options would be considered correct?

A. The researchers would not reject the null hypothesis. Furthermore, they would suspend production of the new drug, because there is no evidence that it significantly lowers recovery time.
B. The researchers would not reject the null hypothesis. Furthermore, they would continue production of the new drug, because there is evidence that it significantly lowers recovery time.
C. The researchers would reject the null hypothesis. Furthermore, they would suspend production of the new drug, because there is no evidence that it significantly lowers recovery time.
D. The researchers would reject the null hypothesis. Furthermore, they would continue production of the new drug, because there is evidence that it significantly lowers recovery time.

Answer: A

NEW QUESTION # 173
......

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