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ISM Supply Management Core Exam Sample Questions (Q144-Q149):

NEW QUESTION # 144
UVW, Inc. issues a Request for Quotation (RFQ) for urgently-needed safety equipment. The equipment must be installed immediately in order to keep the firm in compliance with safety regulations. UVW is contacted by a small, minority-owned company which asks for two more weeks to submit its quotation, as its technical expert is out sick. In this situation, which of the following is the MOST appropriate course of action for UVW to take?

• A. Extend the RFQ due date and notify all suppliers of the extension
• B. Accept other quotations as scheduled and set aside a portion of the award for the minority-owned supplier
• C. Return all quotations and issue a new RFQ
• D. Inform the supplier that quotations must be received by the due date in order to be considered

Answer: D

Explanation:
Given the urgency of the safety equipment and the need to comply with safety regulations immediately, extending the RFQ due date (A) or setting aside a portion of the award (B) would delay the process. Returning all quotations and issuing a new RFQ (D) is also impractical due to time constraints. Therefore, the appropriate action is to inform the supplier that quotations must be received by the due date, ensuring the urgent needs are met without compromising fairness. References: Procurement best practices, RFQ management guidelines, safety compliance regulations.

NEW QUESTION # 145
Changing accounting assumptions from year to year without having justifiable reasons for the changes is a departure from the accounting principle of:

• A. Verifiability
• B. Consistency
• C. Conservatism
• D. Historical cost

Answer: B

NEW QUESTION # 146
A supply management team reviews all documents dealing with processes and procedures for the supply management function. Each team member reviews the documents and reports back to the group on the accuracy of the information, particularly concerning financial transactions. Any discrepancies are documented, updated, and submitted to senior management for approval. Which of the following is the MOST important legal requirement for this activity?

• A. Ensuring processes address the concerns of the legal team on intellectual property laws
• B. Ensuring processes meet the requirements of Sarbanes-Oxley and similar laws
• C. Ensuring processes address issues and requirements of contract and commercial laws
• D. Ensuring processes adhere to requirements of anti-corruption/anti-bribery laws

Answer: B

Explanation:
The supply management team is reviewing documents related to processes and procedures, with a focus on financial transactions. The most important legal requirement for this activity is:
* Sarbanes-Oxley Act Compliance: Ensuring that processes meet the requirements of the Sarbanes-Oxley Act (SOX) is critical. SOX mandates strict reforms to improve financial disclosures and prevent accounting fraud.
* Internal Controls: Verify that the processes have robust internal controls to ensure accurate financial reporting and safeguard against financial discrepancies.
* Documentation and Approval: Discrepancies should be documented, updated, and submitted for approval to ensure transparency and accountability.
Ensuring compliance with SOX and similar laws is paramount because these regulations directly impact the integrity and accuracy of financial reporting, which is crucial for maintaining investor confidence and legal compliance.
References:
* Sarbanes-Oxley Act (SOX) compliance requirements.
* Institute for Supply Management (ISM) guidelines on financial process management.

NEW QUESTION # 147
DEF, Inc. wants to ensure adequate material supply for an emerging product with high quality specifications for the raw materials. Given this situation, which of the following would be the BEST course of action for DEF to take?

• A. Ensure a wide selection of suppliers are offered opportunities to submit bids
• B. Choose a supplier with a large infrastructure and high quality standards
• C. Select an approved supplier and work collaboratively with it to meet the entirety of the organization's quality requirements
• D. Select a preferred supplier to cover the bulk of the requirement and supplement the balance with qualified suppliers

Answer: C

NEW QUESTION # 148
Exhibit:

A recent graduate is interested in investing in a stock. This individual is particularly interested in retail companies and has been following two companies closely for the past year. In order to decide which stock to invest in, this individual decides to compare monthly returns for both companies over the past year. A table of descriptive statistics is given below. What can be said about Company A regarding risk and average returns in relation to Company B?

• A. Company A has higher average monthly returns and is relatively more risky than Company B.
• B. Company A has lower average monthly returns and is relatively more risky than Company B.
• C. Company A has lower average monthly returns and is relatively less risky than Company B.
• D. Company A has higher average monthly returns and is relatively less risky than Company

Answer: D

NEW QUESTION # 149
......

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