Question 1
Procurement and Supply Chain Exam 2026. The role of supply management is best captured by the following question:
- How can supply and suppliers help decrease costs and increase revenues?
- How can supply and suppliers help decrease costs and decrease revenues?
- How can supply and suppliers help increase costs and decrease revenues?
- How can supply and suppliers help increase costs and increase revenues?
Answer: How can supply and suppliers help decrease costs and increase revenues?
Question 2
Since labor and other costs greatly exceed outlays for purchased materials and services in most service organizations, supply is of little consequence in most service organizations.
- true
- false
Answer: false
Question 3
One of the most important steps in achieving the potential of the supply function is hiring someone from outside of the company’s industry into the top supply position.
- true
- false
Answer: false
Question 4
If a supply manager identifies and eliminates the causes of uncertainty and risk in the supply chain, the organization may be able to reduce the level of inventory.
- true
- false
Answer: true
Question 5
If organizational objectives and supply objectives are incongruent:
- it will be easy to translate organizational objectives into supply objectives.
- it will be difficult to translate organizational objectives into supply objectives.
- it will be difficult to translate supply objectives into organizational objectives.
- it will be easy to translate supply objectives into organizational objectives.
Answer: it will be difficult to translate organizational objectives into supply objectives.
Question 6
The three levels of strategic planning are corporate, business unit, and functional.
- true
- false
Answer: true
Question 7
Supply should obtain needed goods and services at the lowest total cost of ownership because, in the long term, this often has a cost impact that is greater than the original purchase price.
- true
- false
Answer: true
Question 8
The executive to whom the chief purchasing officer (CPO) reports does not influence the status of purchasing and the degree to which it is emphasized within the organization.
- true
- false
Answer: false
Question 9
Which factors have a major influence on supply’s level in the organization:
- the nature of the products or services acquired; the extent to which supply and suppliers can provide competitive advantage; the ratio of purchased material and services costs to total costs or total income.
- the nature of the products or services acquired; the ratio of purchased material and services costs to total costs or total income; and the extent to which the organization is willing to outsource.
- the ratio of purchased material and services costs to total costs or total income; the extent to which supply and suppliers can provide competitive advantage; and the extent to which the organization is willing to outsource.
- the nature of the products or services acquired; the extent to which supply and suppliers can provide competitive advantage; and the degree of centralization.
Answer: the nature of the products or services acquired; the extent to which supply and suppliers can provide competitive advantage; the ratio of purchased material and services costs to total costs or total income.
Question 33
In portfolio analysis, cost analysis can be used in the acquisition of strategic goods or services to identify opportunities to:
- avoid, eliminate or reduce costs in the buyer’s cost structure.
- avoid, eliminate or reduce costs in supplier switching costs.
- divide the spend for the item or service among multiple suppliers.
- avoid, eliminate or reduce costs in buyer and supplier cost structures.
- avoid, eliminate or reduce costs in the supplier’s cost structure.
Question 34
A purchasing approach to minimize the acquisition costs and rely on competition to keep prices low is best suited for:
- noncritical/routine items.
- bottleneck items.
- bottleneck items and strategic items.
- leverage/commodity items.
- strategic items.
Question 35
When planning a negotiation strategy, if the estimated range of acceptable results for both buyer and seller indicate there is no zone of overlap, the negotiator must determine if the gap can be closed. Procurement and Supply Chain Exam 2026
- True
- False
Question 36
If the decision has been made that a new requirement cannot be made in-house and no existing supplier is adequate, then:
- one option exists: search the marketplace for an untried/unknown, new supplier.
- three options exist: search the marketplace for a new supplier, engage in reverse marketing, or redesign/respecify the requirement so that it is procurable.
- three options exist: search the marketplace for a new supplier, convince an existing supplier to develop the capability, or engage in reverse marketing.
- three options exist: search the marketplace for a new supplier, convince an existing supplier to develop the capability, or inform the internal user the item cannot be purchased.
- two options exist: search the marketplace for a new supplier or convince an existing supplier to develop the capability.
Question 37
A request for information (RFI) signals that the buyer has identified the supplier as the source of supply and represents a commitment for future business.
- True
- False
Question 38
Historically, the advantages of global sourcing were more dependable service, greater flexibility, and detailed knowledge of the buyer’s specific requirements.
- True
- False
Question 39
Assurance of supply is an argument that favors single sourcing.
- True
- False
Question 40
Purchasers integrate systems or processes with preferred suppliers to avoid unnecessary duplication and speed up transactions. Procurement and Supply Chain Exam 2026
- True
- False
Question 41
A goal of supply chain management is to:
- increase competition by increasing the number of suppliers in the supply chain.
- reduce uncertainty and risks between and among members of the supply chain.
- push inventory as far down the supply chain as possible.
- drive down prices through competitive online bidding.
- gain competitive advantage by acquiring confidential information from chain members.
Question 42
Buyer-supplier partnerships:
- improve buyer-supplier communication at the expense of internal relationships.
- reflect the trend toward horizontal integration.
- are designed to maximize efficiency in buyer-supplier operations.
- result in significant quality improvements and total cost increases.
- result in early supplier and supply involvement in design and description.
Question 43
Trends in supply management include:
- greater concentration of the supplier selection decision in procurement.
- switching suppliers frequently through online auctions to get price discounts.
- increasing the number of suppliers and developing closer relationships.
- limiting the number of suppliers and focusing on results from key suppliers.
- negotiating shorter term contracts with fewer suppliers to increase leverage.
Question 44
A document which is drawn by the buyer’s bank at the buyer’s request, and guarantees that the bank will pay the agreed-on amount when all prescribed conditions, such as satisfactory delivery, have been completed, is called a sight draft.
- True
- False
Question 45
Commercial letters of credit (CLCs) are the least actively used structured payment instruments in global trade. Procurement and Supply Chain Exam 2026
- True
- False
Question 46
For the Incoterm CIF (Cost, Insurance and Freight), the seller clears the goods for export, is responsible for delivering the goods on board at the port of shipment, pays the costs associated with transport of the goods to the port of destination, and procures and pays for marine insurance in the buyer’s name for the shipment.
- True
- False
Question 47
Implied authority includes the acts that the agent is expressly and directly authorized to perform.
- True
- False
Question 48
When an employee who is not a legal agent of the company agrees to buy something from a salesperson and the item is received and the company pays the invoice, the employee is exercising apparent authority.
- True
- False
Question 49
The principle(s) underlying blockchain technology include:
- transparency with pseudonymity.
- peer-to-peer transmission.
- irreversibility of records.
- a distributed database, peer-to-peer transmission, transparency with pseudonymity and irreversibility of records.
- a distributed database.
Question 50
In most organizations, current supply performance metrics and evaluation methods are highly effective at validating supply’s results and getting supply recognition as a major contributor to organizational success.
- True
- False
