EMT Practice Test

1. Question Content...

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Question1: Which of the following is a key element in the development of an auditable supply chain management process?

Question2: A supply management office for a county government has been authorized to select a contractor to design, build and operate a new bridge.
In the past, the county has experienced four major problems when hiring contractors:
1) Contractors dropping out of the bidding process due to lack of resources or ability to perform the scope of the work
2) A limited number of competitive bids that are able to achieve the value supply management desires
3) Underperformance of contractors after the award
4) The perception that the contractors are not operating effectively
In order to prevent these problems, which of the following should supply management do FIRST?

Question3: A supply manager Is leading a project to implement a change from a common grade material to a newer grade that improves performance and achieves cost savings. The project team includes representatives from engineering, quality, sales, product development, and cost accounting. Two suppliers capable of producing the new material have been identified and proposals have been received. The project is now approaching the final implementation phase. Which of the following should be the NEXT step in the process?

Question4: A firm wants to reduce the supply base for a particular product from three to two suppliers. Which of the following is the BEST course of action for this firm to take?

Question5: Which of the following is the PRIMARY benefit of supply base rationalization?

Question6: A supply manager concludes that the best source for a critical component is a manufacturer located in an overseas country. The supplier's pricing and reputation are excellent, but it is in an area that Is politically and economically unstable. The supply manager has no experience in this country, but needs to build a relationship with the supplier. Given this situation, which of the following will be MOST helpful in the long-term?

Question7: The procurement officer for a publicly-traded U.S. company completes a 409 filing with the Securities and Exchange Commission (SEC), due to a number of supplier deliveries being missed that impact revenue forecasts. The procurement officer's NEXT step should be to

Question8: A multinational company is in the market to purchase widgets. The firm's standard payment terms are net 80.
While negotiating terms and conditions, a supplier offers to provide a 2% discount on the purchase price of the widgets if they are paid within 35 days. This is an example of which of the following?

Question9: A supply manager Is conducting financial analyses of bidders. The supply manager wants to select the supplier that is the most efficient in its use of assets. Based on the following information, which supplier should the supply manager choose?

Question10: A firm purchases large quantities of parts from an overseas supplier in order to take advantage of volume discounts. The firm wants to delay paying duty on the parts until they are required for manufacturing. Given this situation, which of the following Is the MOST appropriate course of action for the firm to take?

Question11: Which of the following is MOST important to review before employing a low-cost country sourcing (LCCS) strategy in a remote region located in a distant geographical location?

Question12: At what point in a business relationship with a supplier should discussions be held about which party has responsibility for specific costs, in the event the relationship needs to end?

Question13: According to the Kraljic matrix, how should a product with high business impact and low supply market complexity be categorized?

Question14: A company's major supplier of sub-assemblies provides excellent quality and reasonable costs. However, shipping delays and damage in transit make this supplier less reliable than desired. The supply manager would like to retain this supplier if possible, but is concerned about the reliability issues. Given this situation, which of the following is the BEST course of action for the supply manager to take?

Question15: A service provider has experienced diminished value and stagnant results within an important category. Which of the following is the BEST course of action the firm can take to improve the category strategy?

Question16: Which of the following BEST describes a single source supply strategy?

Question17: Which of the following contract types is an agreement to pay a specified price when the items or services have been delivered and accepted?

Question18: Developing a category management plan can BEST be accomplished by

Question19: According to the Law of Agency, a supply manager acting as an agent makes decisions and acts in whose interest(s)?

Question20: Which of the following is the BEST method for comparing a supplier's performance to that of another organization, with the goal of understanding where improvements might be made?

Question21: A university is evaluating its student registration software. The current system, purchased from Supplier A, has been in place for five years and works well, but may be outdated. A new system provided by Supplier B includes an online chat feature, which Supplier A's system currently does not have. While the costs for the two systems are essentially the same, Supplier B's system has an additional one-time implementation cost of
$250,000. Supplier A informs the university It will provide its own online chat option for a one-time fee of
$50,000.
The university calculates that switching to any new platform will involve migration costs. In this situation, the BEST course of action for the university is to

Question22: A supply manager Is seeking potential suppliers to recreate a now obsolete custom component. The supply manager identifies five suppliers who have the technology to manufacture the part. The supply manager wants to understand the capability of these suppliers prior to bidding. Which of the following should the supply manager use in this instance?

Question23: A machine that costs $200,000 is expected to realize an annual savings of $35,000. What is the simple ROI for this piece of equipment?

Question24: A team from RST, Inc. is conducting a negotiation session with a supplier. During the session, RST's lead negotiator perceives that various members of the supplier's team are being evasive on the issue of the supplier's capacity to handle the project. However, there is no apparent sign that the other members of RST's team share this perception. Given this situation, which of the following is the BEST course of action for the lead negotiator to take?

Question25: Which of the following is the PRIMARY reason for holding a business review with a supplier?

Question26: When developing a supplier exit strategy, which of the following is generally considered the MOST important internal consideration?

Question27: A supply manager Is assigned to a new product similar to products the firm has developed in the past. Because the stakeholders have not defined all of the product's requirements, not all engineering diagrams have been completed, and the program is behind schedule. The program manager requests all procurement lead times for the project. Which of the following is the BEST way for supply manager to respond in this situation?

Question28: A major supplier for JKL, Inc. has a production capacity of 100 units a month. For the last six months, however, the supplier's production rate has climbed to 105 units a month. JKL audits the supplier and takes note of the higher production rate. In this situation, which of the following would MOST likely be of concern to JKL?

Question29: A supply manager for an electronics manufacturer is asked to source packaging for the company's new printed circuit board. The specifications recommend 0.50 mm tolerances, with a projected breakage ratio of 0.50%, at a cost of $1.00 each. The supply manager finds an alternative source that is specified at 0.60 mm tolerances, with a projected breakage ratio of 0.75%, at a cost of $0.80 each. If the cost of the new circuit board is $120 per unit, which packaging should the supply manager recommend and why?

Question30: JKL, Inc. solicits bids for the repair of a boiler used in its shoe factory. Supplier A submits a bid of $7000. The next lowest bid is $8,000, and the remaining bids are between $10,000 and $11,000. JKL awards the contract to Supplier A. However, before beginning repairs, Supplier A realizes it made a mistake and underestimated the repair work. Supplier A refuses to do the work, saying it would lose money. If JKL declines to increase the payment and claims that Supplier A breached the contract, the MOST likely result would be which of the following?

Question31: A supply manager Is conducting the following activities:
*Mapping between category codes and category maps
*Normalizing supplier information
*Performing supplier mapping
*Refining mapping with financial systems data
Which of the following is the supply manager engaged in?

Question32: Which of the following should be supply management's PRIMARY service or material selection criterion?

Question33: A supply manager is developing a request for proposal (RFP) for travel agency services. The firm's travel manager has a short list of requirements that have served the company well in the past. However, the vice president (VP) of sales wants frequent fliers from the sales team to be given special status. The travel manager is concerned these additional requirements will limit competition and result in a less favorable deal. In which of the following ways can the supply manager BEST resolve this situation?

Question34: A supply manager seeks bids on a new piece of capital equipment. The equipment is budgeted at $115,000.
Three suppliers send in bids of $110,000, $114,000 and 5135,000. After receiving the bids, additional negotiations with the low bidder result in a final cost of $105,000. In this situation, what should the baseline value be for calculating cost avoidance?

Question35: PQR, Inc. is a small manufacturing firm that is rebuilding its customer base after emerging from bankruptcy.
PQR now projects growing demand for its products. PQR's supply manager is planning negotiations with a key supplier that has worked well with the firm in the past. Which of the following is the STRONGEST factor the supply manager can use to improve PQR's negotiating position?

Question36: A supply manager is planning to conduct negotiations with three potential suppliers, one of which will be selected to provide components for a new product line. A number of internal stakeholders have asked to participate in the negotiations. However, most of the stakeholders have not been involved with the sourcing process up to this point. In this situation, which of the following would be the BEST approach for the supply manager to take?

Question37: A product's labor content is $10 and its overhead is $12.50. The product sells for $36.50 per unit. Over the past year, supply management has reduced the product's cost of materials from $14 per unit to $12.
How much have supply management's efforts contributed to profit?

Question38: A manufacturing company signs a cost-reimbursable contract with a new customer that needs a large volume of its product manufactured in a short period of time. The product is difficult and time consuming to fabricate.
The contract provides generous flexibility for cost but has severe consequences if the deadline is missed. To ensure the timely completion of the contract, the manufacturer plans to negotiate with a lower-tier supplier for a critical sub-component.
Given this situation, which of the following negotiation objectives is MOST closely aligned with the interests of the manufacturing firm?

Question39: A supply manager Is leading a team in developing a strategic sourcing strategy for the company's corporate-wide desktop and laptop computer procurement. Several business unit managers get into a heated debate over the relative Importance and exposure of desktop computers for their specific business units. Some units consider the desktop computer to be a low risk/low value commodity, while others consider them to be high risk/high value critical items. How should the supply manager proceed?

Question40: The price of raw materials for a critical product is highly volatile. The supplier will not commit to long-term pricing due to the dramatic swings of raw material price. In this situation, the buying organization should

Question41: Which of the following is the BEST long-term strategy for creating top line revenue growth and increased sales for both an organization and its key suppliers?

Question42: Which of the following is the simplest form of supplier evaluation?

Question43: A company creates a corporate sourcing team with category management responsibilities. Previously, the firm had no dedicated sourcing staff, and all procurement was decentralized and transactional. The sourcing team is ready to commence its initial project. Which of the following should the team do FIRST?

Question44: Which of the following BEST describes the strategic sourcing process?

Question45: Planning and negotiating a contract while considering its impact on a supplier is an example of which of the following?

Question46: A company is about to conduct an opportunity assessment review of the items it purchases. Which of the following categories should be analyzed FIRST?

Question47: PQR, Inc. is a large international life insurance company. PQR's vice president of sales asks the firm's supply manager to require that any future procurement contracts contain a provision which obligates the supplier to make PQR's insurance products available to the supplier's employees for optional purchase. In this situation, the supply manager should

Question48: A supply management department is looking to standardize purchases across the entire organization and leverage spend with fewer suppliers. Which of the following will be MOST useful for determining historical baseline costs?

Question49: Items of low value and complexity are typically categorized as which of the following

Question50: CDE Inc. is a metal casting manufacturer that uses a supplier performance scorecard to measure key performance indicators (KPIs) across the business. CDE's supply manager wants Supplier Y to improve on a number of the measured KPIs. Which of the following is the BEST approach for the supply manager to take in order to achieve this objective?

Question51: A firm has repeatedly experienced communication problems with three crucial suppliers. The firm's supply manager concludes that many of these problems are the result of not having regular business reviews with these suppliers. However, all three suppliers have indicated that they do not see the value in regular business reviews. Given this situation, which of the following is the BEST course of action for the supplier manager to take?

Question52: During negotiations, each side adopts a point of view, and then both parties work to close the gap by exchanging concessions. Which of the following tactics is being used?

Question53: An educational institution that delivers continuing education programs to business leaders has seen increased demand for its program in multiple languages. The supply manager responsible for the sourcing, contracting, and relationship development of these training providers has noticed its customers in other countries using local instructors who can better relate to the audiences. Which of the following supply base innovation skills is the supply manager facing?

Question54: Which of the following is considered the HIGHEST level in a supply chain's strategic plan?

Question55: A supply manager Is planning for negotiations with a sole-source supplier of an essential part. The buying firm is already one of the supplier's top customers, and will need even larger quantities of the part to expand its product line in the near future. The supply manager learns that the supplier may experience some financial risks over the coming year, and that the supplier is anxious to solidify its relationships with major customers to mitigate that risk. Which of the following Is the BEST way for the supply manager to gain a deeper understanding of the supplier's position?

Question56: In portfolio analysis, purchases for which the buying organization consolidates spend with a handful of suppliers but still maintains competition are BEST classified as

Question57: Of the following, the BEST way for supply management to effectively support stakeholders is to ensure that

Question58: A buying company concludes the request for proposal (RFP) process and signs a contract for its primary logistics provider. Company policy requires that the supply manager notify and debriefall unsuccessful bidders. During these debriefings, one of the bidders-Supplier X- states that it will offer a price discount lower than that of the successful bidder. Supplier X's proposal is very strong, and the firm has a track record of success with the buying company. Given this situation, which of the following is the BEST course of action for the supply manager to take?

Question59: A supply manager solicits bids for janitorial services. The incumbent cost is $20,000 per month to perform Scope A. After working with internal stakeholders, obtaining bids, and performing negotiations, a new supplier is awarded the agreement. The new supplier's cost is $19,000 per month to perform Scope A as well as Scope B, which was previously performed by another supplier at a cost of $2,000 per month.
What is the annual cost reduction?

Question60: A firm enters into a contract with a minority business. The invoice does not match the purchase order, and some incorrect items are shipped. The erroneous items, valued at $5,000, are returned. The replacement items are scheduled to be delivered within 2 days. The total invoice is for $18,000, which is a substantial amount for the business. Preferential payment terms have previously been negotiated from 30 to 14 days from receipt of goods, as cash flow is a significant issue. The situation is summarized as follows:
Purchase Order RaisedGoods Received Invoiced
Timing18 days ago 13 days ago 12 days ago
Amount$18,000 $18,000 $18,000
As it will take one business day to process payment, a decision needs to be made on whether the supplier should receive payment on time. Which of the following courses of action should the supply manager take?

Question61: A supply manager is drafting a request for proposal (RFP) for courier services. Which of the following requirements is MOST likely to affect external stakeholder satisfaction?

Question62: A manufacturing company has numerous sites around the country. Supply management teams at each location do not have the same understanding of the different Internal processes. Which of the following should senior supply management do in order to correct this problem?

Question63: Consider the following supplier terms for the same product:
Supplier A:2%/15, Net 30
Supplier B:4%/5, Net 30
Which supplier's terms are more advantageous to the buying organization?

Question64: Development of which of the following would be MOST beneficial for supplier technologies and processes important to the buying organization?

Question65: CDE, Inc. contracts with a supplier for the fabrication of trade show booths and displays. The contract is on a cost-plus fixed fee (CPFF) basis, with the supplier's agreed-upon fee set at $15,000 and the estimated allowable cost of materials set at $20,000, for a total of $35,000. The supplier is able to bring down total material costs to $18,500. Given this situation, how much can the supplier bill CDE for the project?

Question66: GHI, Inc. is a manufacturer of batteries. GHI's supply manager reads an industry publication describing a new innovation from DEF Company that extends battery capacity, which could be of tremendous benefit to GHI.
DEF happens to be a supplier to GHI, and yet DEF's sales representative has never mentioned the innovation to the supply manager. In order to strengthen the business relationship and enhance future collaboration between GHI and DEF, the supply manager should

Question67: Which of the following is the FIRST step in developing a negotiation plan?

Question68: After a bid process concludes and an award is made, there should be a debriefing process that involves

Question69: Motivated by public relations considerations, a company decides to insource the manufacture of a major product. This decision was MOST likely made to bring about

Question70: Which of the following financial indices may be used to infer the typical mark-up percentages used by a firm?

Question71: A supply manager needs to develop additional raw material suppliers in support of a category management plan created for a specific region. The project has been approved by senior management and the team has been selected. Which of the following is the NEXT step the supply manager should take?

Question72: A supply manager receives negative feedback from internal stakeholders about several suppliers. However, the scorecards for these suppliers have been positive over the past few quarters, and any diminished performance is not reflected. Which of the following MOST likely explains this situation?