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ISM Supply Management Core Exam Sample Questions (Q225-Q230):

NEW QUESTION # 225
One of TUV Company's largest suppliers has been performing poorly, and the quality of its services does not meet the needs of a particular stakeholder. Which of the following is the BEST way for TUV's supply manager to evaluate how to establish service level agreements (SLAs) to improve the performance of this supplier?

A. Notify the supplier that its level of performance is not acceptable, and renegotiate contract pricing to reflect the supplier's performance
B. Request that the supplier provide a set of metrics to be used in measuring performance
C. Notify the supplier of the performance issues, and terminate the contract if the supplier does not correct performance within thirty days
D. Develop measurements of supplier performance with the stakeholder, and include those measurements in an amendment to the contract

Answer: D

Explanation:
* Identify Stakeholder Needs: Understanding the specific performance issues as identified by the stakeholder.
* Collaborative Measurement Development: Working with the stakeholder to develop specific, measurable, achievable, relevant, and time-bound (SMART) performance metrics.
* Contract Amendment: Including these agreed-upon performance metrics in the contract ensures that the supplier is contractually obligated to meet these standards.
* Monitor and Review: Regularly reviewing these performance metrics to ensure continuous improvement and compliance by the supplier.
References
* Supplier Performance Management Literature
* Contract Management Best Practices
* Service Level Agreement Guidelines

NEW QUESTION # 226
The histogram below shows the Industrial Production Index, which measures the output of the manufacturing, mining, and utilities industries for 34 selected countries. After confirming that the data are accurate, economists studying the results are debating how to handle the value for Iceland, 187.4.

The economists are determined to present the most accurate depiction of the data for all 34 countries. Which of the recommendations below is BEST?

A. The value for Iceland is an outlier and should not be eliminated since it is a valid entry and removing it would affect the results.
B. The value for Iceland is an outlier and should be eliminated since it will skew the results gathered from the rest of the data.
C. The value for Iceland is not an outlier but should be changed so that it presents a more accurate picture of the data.
D. The value for Iceland is an outlier and should be changed so that it presents a more accurate picture of the data.

Answer: A

NEW QUESTION # 227
Analysts at a technology company predict that the company will be able to increase the price for its new product after it has been on the market for one year. Which of the following conditions would BEST explain this prediction?

A. As more products are sold, customers' willingness to pay rises.
B. The firms competing in this industry experience economies of scale.
C. The company faces two well-defined customer segments with different levels of willingness to pay.
D. Input prices for the product are expected to rise in the future.

Answer: A

NEW QUESTION # 228
During a prolonged recession, a hotel chain sees reservations at one of its locations decline by five percent. The chain soon decides to close that location. Why would a small change in capacity utilization have this effect?

A. The consumers most affected by the recession are generally those with lower willingness to pay.
B. Fixed costs are too high for the hotel to remain profitable at this decreased quantity.
C. Demand for hotel rooms in this location is extremely elastic.
D. Closing the location will allow the hotel chain to recover some of its sunk costs.

Answer: B

NEW QUESTION # 229
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. Share the target range with the providers and ask for requotes
B. Postpone any negotiations with the bidders and ask the firm's stakeholders to look for ways to reduce the project scope
C. Use a BATNA option and look to develop the software in-house
D. Negotiate with both suppliers to attempt to meet the target cost

Answer: D

NEW QUESTION # 230
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