Changed CORE Exam Questions

Need for High-Quality Materials: DEF, Inc. requires high-quality raw materials for an emerging product.

Collaborative Approach: Selecting an approved supplier and working collaboratively ensures that the supplier fully understands and meets the quality specifications.

Long-Term Relationship: This approach helps build a long-term relationship with the supplier, fostering continuous improvement and reliability.

Quality Assurance: By working closely, DEF can monitor and ensure adherence to quality standards throughout the supply process.

References

CIPS. (n.d.). Building Supplier Relationships for Quality Assurance.

ISM. (n.d.). Collaborative Supplier Management.

When a buyer exceeds their spending authority, the company's liability depends on the nature of the authority and the perception of the suppliers.

DEF is only liable for an amount equal to the buyer's actual authority level: This is not entirely accurate as it does not consider apparent authority.

DEF is fully liable for the agreements, as the buyer is an employee of the company: This disregards the limits of authority set by the company.

DEF is responsible for the agreements if the buyer exceeded actual authority, but the suppliers perceived the spend to be within apparent authority: This is accurate as apparent authority refers to the authority a third party perceives the agent to have, even if it exceeds their actual authority.

DEF is responsible for the agreement if the buyer exceeded actual and apparent authority levels, but only for a value equal to the apparent authority amount: This statement mixes concepts and is not correct.

Therefore, DEF is responsible for the agreements if the buyer exceeded actual authority, but the suppliers perceived the spend to be within apparent authority.

References:

Contract law principles regarding actual and apparent authority.

Case studies on organizational liability for employees' actions.

Objective: The supply manager aims to increase competition and encourage participation from small and minority-owned businesses while maintaining fairness.

Expanding Advertising: Broadening the advertising reach for bidding opportunities ensures that diverse suppliers are aware of and can participate in the sourcing event.

Inclusivity: This approach promotes inclusivity by making information about opportunities accessible to a wider audience, increasing the likelihood of diverse suppliers bidding.

Fairness: Ensuring that bidding opportunities are well-publicized helps maintain a level playing field for all potential suppliers.

References

ISM. (n.d.). Promoting Supplier Diversity in Procurement.

CIPS. (n.d.). Strategies for Inclusive Supplier Engagement.

To improve the situation where stakeholders request more items despite achieving lower per-item costs, the best long-term approach is to work with leadership to implement a more effective demand management program. This program would help in managing and controlling the demand for items, ensuring that the total expenditures do not increase unnecessarily. It involves planning, monitoring, and controlling the usage and requisition of goods and services to align with organizational goals and budgets.

References

CIPS (Chartered Institute of Procurement & Supply). Demand Management in Procurement.

ISM (Institute for Supply Management). Strategies for Effective Demand Management.