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ISM Supply Management Core Exam Sample Questions (Q248-Q253):

NEW QUESTION # 248
A company's 2013 year-end balance sheet included the following:

The company's net cash from operating activities on its 2013 statement of cash flows is $200,000. Current year depreciation expense is $25,000. What amount should the company report as net income for 2013?

A. $230,000
B. $130,000
C. $170,000
D. $175,000

Answer: C

NEW QUESTION # 249
A firm's primary goal for its upcoming raw material negotiations with a well-performing supplier is cost reduction. In order to achieve this, which of the following courses of action should supply management take?

A. Review the supplier's key performance indicators (KPIs)
B. Offer to purchase a larger volume of material over the next five years
C. Research market conditions and the supplier's tolerance for early payment incentives
D. Inform the supplier where it is located on the Kraljic Matrix and request price concessions

Answer: C

Explanation:
* Research Market Conditions: Understanding current market conditions helps in assessing whether the supplier's prices are competitive and reasonable.
* Supplier's Financial Situation: Knowing the supplier's financial health and their tolerance for early payment incentives can be crucial in negotiations.
* Negotiate Incentives: Offering early payment incentives can be an effective strategy to negotiate cost reductions. This benefits the supplier by improving their cash flow.
* Evaluate Alternatives: Consideration of alternative suppliers or negotiating other terms can also put pressure on the supplier to offer better pricing.
References:
* CIPS: "Negotiation Techniques in Procurement and Supply"
* ISM: "Supplier Negotiation Strategies"

NEW QUESTION # 250
Which of the following explains external category market conditions by describing competitive factors within an industry?

A. Porter's Five Forces
B. SWOT analysis
C. Supplier analysis
D. Request for information

Answer: A

Explanation:
* External Category Market Conditions: These are factors outside the organization that can affect the supply market.
* Porter's Five Forces: This framework analyzes the competitive forces within an industry, which include:
* The threat of new entrants
* The bargaining power of buyers
* The bargaining power of suppliers
* The threat of substitute products or services
* The intensity of competitive rivalry
* Application: Using Porter's Five Forces helps in understanding the dynamics of the industry and how they affect the company's position and strategy.
* Strategic Decision Making: This analysis informs supply managers about potential risks and opportunities, enabling them to make better strategic sourcing decisions. References
* Michael E. Porter's "Competitive Strategy: Techniques for Analyzing Industries and Competitors".

NEW QUESTION # 251
Based on the histogram below, order the mean, median, and mode of the data from smallest to largest.

A. Median, Mode, Mean
B. Mean, Mode, Median
C. Mode, Mean, Median
D. Mode, Median, Mean

Answer: D

NEW QUESTION # 252
Company B sold a service contract that covers a two-year period for $10,000. The service period commenced on July 1, Year 1. Service revenue is recognized evenly throughout the contract period. What amount should Company B report as deferred revenue from this service contract on its balance sheet on December 31, Year 1?

A. $7,500
B. $2,500
C. $10,000
D. $5,000

Answer: A

NEW QUESTION # 253
......

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ISM Supply Management Core Exam Sample Questions (Q248-Q253):

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