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Supply Management Core Flashcards

7 cards from real CPSM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Supply Management Core flashcards as text

  1. Under the UCC Article 2, a purchase order becomes a binding contract when:

    Answer: A valid offer is accepted by the other party

    Under UCC Article 2, a contract for the sale of goods is formed when a valid offer is accepted, and acceptance can occur through conduct such as shipment of goods.

  2. A supply manager implementing Just-in-Time (JIT) inventory should PRIMARILY focus on reducing:

    Answer: Lead time variability

    JIT depends on predictable, short lead times; lead time variability forces safety stock buffers that negate JIT's waste-elimination benefits.

  3. Which sustainability standard specifically addresses supply chain labor practices and social responsibility?

    Answer: SA8000

    SA8000 is an international social accountability standard focused on workplace conditions including child labor, forced labor, health and safety, and freedom of association.

  4. A buyer receives goods that do not conform to the contract specification. Under the UCC 'perfect tender rule,' the buyer may:

    Answer: Accept, reject, or partially accept the shipment

    The UCC perfect tender rule allows the buyer to accept all goods, reject all goods, or accept conforming units and reject nonconforming units if the seller tenders imperfect goods.

  5. A supply manager calculates a supplier's on-time delivery rate at 72% over 12 months against a target of 95%. The MOST appropriate next step is to:

    Answer: Issue a corrective action request and establish an improvement timeline

    A corrective action request (CAR) formally documents the performance gap, requires root cause analysis from the supplier, and establishes measurable improvement milestones.

  6. Which contract pricing arrangement provides the GREATEST cost control incentive for the supplier?

    Answer: Firm fixed price

    A firm fixed price contract places all cost risk on the supplier, creating maximum incentive for the supplier to control costs because any overrun comes out of their profit.

  7. The term 'demand aggregation' in strategic sourcing refers to:

    Answer: Combining purchase volumes across business units to increase buying leverage

    Demand aggregation consolidates purchasing volumes across multiple departments, plants, or business units to negotiate better pricing and terms through increased leverage.