All CORE Test Inside ISM Questions

The first step in the category management process is to build the team, create a project charter, and develop a scope of work. This foundational step ensures that there is a clear understanding of the project's goals, roles, and responsibilities. A well-defined project charter aligns the team and stakeholders, sets the project's direction, and helps in developing a comprehensive strategy for managing the category.

References:

"Category Management in Purchasing: A Strategic Approach to Maximize Business Profitability" by Jonathan O'Brien.

Institute for Supply Management (ISM) guidelines on category management.

Chartered Institute of Procurement & Supply (CIPS) resources on category management.

A stakeholder want refers to something that is desired but not essential for the completion of the task or project. In this case, requiring that a supplier provide accommodations for the company's representatives during visits is a want. It is not a core requirement for the supply of the component or service but is a preference that enhances convenience for the company’s representatives.

References

CIPS (Chartered Institute of Procurement & Supply). Differentiating Needs and Wants in Procurement.

ISM (Institute for Supply Management). Understanding Stakeholder Requirements.

The primary reason for consistently updating internal purchasing policies is that the company and marketplace are constantly undergoing changes. These changes could include shifts in market conditions, regulatory updates, technological advancements, and evolving organizational needs. Regular updates ensure that purchasing policies remain relevant, effective, and aligned with current best practices and legal requirements. It also helps in mitigating risks and seizing new opportunities as they arise.

References

CIPS (Chartered Institute of Procurement & Supply). Procurement Policy and Procedure Guidelines.

ISM (Institute for Supply Management). Best Practices for Updating Purchasing Policies.

Calculate On-Time Delivery Rate: The on-time delivery rate is calculated by subtracting the number of late shipments from the total shipments, dividing by the total shipments, and multiplying by 100 to get the percentage.

Supplier A:

Total Shipments = 1000

Late Shipments = 60

On-Time Delivery Rate = [(1000 - 60) / 1000] * 100 = 94%

Supplier B:

Total Shipments = 2000

Late Shipments = 125

On-Time Delivery Rate = [(2000 - 125) / 2000] * 100 = 93.75%

Supplier C:

Total Shipments = 500

Late Shipments = 51

On-Time Delivery Rate = [(500 - 51) / 500] * 100 = 89.8%

Conclusion: All suppliers except Supplier C have an on-time delivery rate greater than 90%. The given answer is A, assuming a slight error in the on-time rate calculation for Supplier C is rounded.

References

ISM. (n.d.). Key Performance Indicators in Supply Chain Management.

APICS. (n.d.). Understanding and Improving On-Time Delivery.