CPSM CORE Exam Dumps

PQR, Inc.'s CEO has directed supply management to provide wing flap inventory at the lowest cost while meeting the goal of multinational market expansion. The options given are:

Option A suggests purchasing refurbished parts from a non-certified repair shop with an extended warranty. While this is the lowest cost option, using non-certified parts can compromise quality and regulatory compliance, which is critical in the aerospace industry.

Option B involves manufacturing the parts internally, which is the most expensive option at $11,000 per part.

Option D proposes purchasing materials from an outside manufacturer at $10,000 per part, which is still more expensive than repairing internally.

Option C, acquiring resale parts and repairing them internally, costs $9,000 per part. This option ensures the parts meet PQR's quality standards and regulatory requirements, as PQR can control the repair process. It balances cost efficiency and quality, making it the best course of action to meet the CEO's directive.

References:

Cost-benefit analysis in supply chain management.

Aerospace industry standards and regulations on part certification.

In a situation where there is a disagreement among business units about the risk and value of desktop computers, the supply manager should consider the different perspectives and categorize the desktops accordingly. Dividing the desktop computers into two groups (high risk/high value and low risk/low value) accommodates the varying needs and assessments of different business units. This approach allows the sourcing strategy to be tailored to meet the specific requirements of each group, ensuring that both critical and non-critical needs are addressed appropriately.

References:

Kraljic, P. (1983). Purchasing must become supply management. Harvard Business Review.

CIPS (Chartered Institute of Procurement and Supply). (2021). Procurement and Supply Chain Management.

Assess Risk: Understand the risk associated with terminating a supplier and the impact on the supply chain.

Continuity of Supply: Ensuring that there is no disruption in the supply of critical materials or services is paramount.

Strategic Planning: Developing a comprehensive exit strategy that includes alternative suppliers or contingency plans.

Minimizing Impact: Minimize any negative impact on production schedules, customer commitments, and overall supply chain stability.

References

Supplier Exit Strategies

Risk Management in Supply Chain

Continuity Planning Resources

The firm is facing shrinking profits on a product that requires high-tech parts with strict specifications. While the contract for these parts has been renegotiated for lower costs, further actions are needed to reduce product costs and improve margins.

Conduct a quality function deployment (QFD) analysis: This helps in translating customer needs into specific engineering requirements but may not directly address cost reduction.

Issue a request for information (RFI) to other suppliers: This might identify potential new suppliers but does not guarantee cost savings or immediate improvement.

Review the part requirements and design with engineering: This is the best course of action as it can uncover opportunities to simplify the design, use alternative materials, or modify specifications to reduce costs without compromising quality.

Renegotiate pricing with the current supplier: Since the contract was recently renegotiated, further price reductions may not be feasible immediately.

Therefore, the most effective course of action is to review the part requirements and design with engineering to identify potential cost-saving opportunities.

References:

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

Engineering and design collaboration for cost reduction strategies.