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ISM Leadership and Transformation in Supply Management Sample Questions (Q112-Q117):

NEW QUESTION # 112
A chemical company sets a standard cost for a key component at $5 per unit. The firm values inventory at standard cost. The firm plans to purchase 10,000 units during the month of March, but at the end of the month, they realize they actually purchased 12,000 units, at a cost of $4.50 per unit.
What is the firm's Purchase Price Variance (PPV) for the month of March?

A. ($4,000.00)
B. $4,000.00
C. ($6,000.00)
D. $6,000.00

Answer: C

Explanation:
To calculate the Purchase Price Variance (PPV), use the following formula:
PPV=(Actual Price-Standard Price)×Actual Quantity ext{PPV} = ( ext{Actual Price} - ext{Standard Price}) imes ext{Actual Quantity}PPV=(Actual Price-Standard Price)×Actual Quantity Given:
Standard Price = $5.00 per unit
Actual Price = $4.50 per unit
Actual Quantity = 12,000 units
ext{PPV} = ($4.50 - $5.00) imes 12,000 ext{PPV} = (-$0.50) imes 12,000 ext{PPV} = -$6,000.00 The negative sign indicates a favorable variance (cost savings). Hence, the PPV for the month of March is ($6,000.00). Leadership and transformation management documents emphasize the importance of variance analysis in controlling procurement costs and ensuring budget compliance. Reference highlight that monitoring PPV helps identify cost-saving opportunities and improve financial performance.

NEW QUESTION # 113
Which of the following requires that exporters certify electronic components are free of certain hazardous materials through the placement of a certification sticker on the unit?

A. WEEE
B. OSHA
C. RoHS
D. REACH

Answer: C

Explanation:
The RoHS (Restriction of Hazardous Substances) directive requires that exporters certify electronic components are free of certain hazardous materials through the placement of a certification sticker on the unit.
RoHS Directive: This European Union directive restricts the use of specific hazardous materials found in electrical and electronic products. The goal is to reduce environmental impact and increase recycling and reuse of electronic equipment.
Certification: Exporters must certify that their products comply with RoHS standards by labeling them accordingly. This ensures that products are safe and meet environmental regulations.
Reference:
European Union. (2003). Directive 2002/95/EC on the restriction of the use of certain hazardous substances in electrical and electronic equipment (RoHS). Official Journal of the European Union.
O'Connor, S. (2006). RoHS Compliance: A Guide to the RoHS Directive. IT Governance Publishing.

NEW QUESTION # 114
A subsidiary of a medical equipment company buys raw materials from suppliers contracted through the central commodity management group, which is located at corporate headquarters. The president of the local woman-owned merchants association contacts the firm's supply manager and asks why the firm does not support the local economy, as some of the raw materials are available from nearby woman-owned suppliers. Which of the following is the BEST way for the supply manager to address this concern?

A. Discuss purchasing social responsibility with supply management staff at headquarters
B. Request authority to contract locally for a portion of the requirements
C. Explain that sourcing policies are set by corporate headquarters
D. Refer the question to senior management and ask them to contact the association

Answer: A

Explanation:
Addressing concerns about local economic support and diversity requires discussing purchasing social responsibility with the supply management staff at headquarters. This approach aligns the company's sourcing practices with broader corporate social responsibility (CSR) goals. By engaging in this discussion, the supply manager can advocate for the inclusion of local, woman-owned suppliers, thereby supporting the local economy and diversity initiatives. This step is proactive and demonstrates the firm's commitment to social responsibility, which can enhance its reputation and community relationships.
Reference:
Carter, C. R., & Jennings, M. M. (2004). The Role of Purchasing in Corporate Social Responsibility: A Structural Equation Analysis. Journal of Business Logistics.
Porter, M. E., & Kramer, M. R. (2006). Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review.

NEW QUESTION # 115
A center-led supply management organization is BEST described as having which of the following types of decision-making structures?

A. Centralized
B. Decentralized
C. Top-down
D. Hybrid

Answer: D

Explanation:
A center-led supply management organization combines elements of both centralized and decentralized decision-making structures, making it a hybrid structure. In a center-led model, strategic decisions and policies are typically centralized to ensure consistency and leverage economies of scale, while operational decisions and daily activities are decentralized to allow for flexibility and responsiveness to local needs. This structure allows organizations to balance the benefits of both centralization (such as cost savings and standardization) and decentralization (such as increased agility and local responsiveness).
Reference:
Cousins, P. D., Lamming, R. C., Lawson, B., & Squire, B. (2008). Strategic Supply Management: Principles, Theories and Practice. Pearson Education.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and Supply Chain Management. Cengage Learning.

NEW QUESTION # 116
Which of the following is an example of an organization mission statement?

A. "Offer innovative customer service responsive to our market's needs"
B. "Update procedure manuals and reference materials for all divisions"
C. "Enhance our reputation in a demanding and rapidly changing field"
D. "Hire, train and retain skilled staff members to represent us"

Answer: A

Explanation:
* Understanding Mission Statements: A mission statement defines the organization's purpose, core values, and primary objectives, providing direction and guiding decision-making processes.
* Relevance to Mission Statements: The statement "Offer innovative customer service responsive to our market's needs" clearly outlines the organization's commitment to providing excellent customer service and adapting to market demands, aligning with the purpose and values of the company.
* Comparison with Other Options:
Option A is more about enhancing reputation, which is an outcome rather than a mission.
Option C focuses on internal procedures rather than the overall purpose.
Option D is related to HR functions, not the broader organizational mission.
* Effectiveness: A good mission statement is clear, concise, and focuses on the organization's key objectives and values, as seen in the correct answer.
* Reference: The principles of crafting effective mission statements are discussed in strategic management and organizational behavior literature, including "Strategic Management: Concepts and Cases" by Fred R. David and resources from the Balanced Scorecard Institute.

NEW QUESTION # 117
......

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ISM Leadership and Transformation in Supply Management Sample Questions (Q112-Q117):

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