ISM Leadership and Transformation in Supply Management Exam Practice Test

Answer : A

Policy Violation: The employee violated the company's strict gift policy by accepting an $80 ticket, which exceeds the $25 limit.

Appropriate Response: Conducting face-to-face training addresses the issue by educating the employee on the company's policies and the importance of adhering to them.

Corrective Action: This approach allows for a constructive discussion, ensuring the employee understands the policy and the reasons behind it, which can prevent future violations.

Proportional Response: While dismissal or other punitive measures may seem excessive for a first-time or minor infraction, training provides a balanced approach to correction and improvement.

Reference: Human resource management best practices emphasize the importance of training and education in addressing policy violations, as discussed in resources like 'Human Resource Management' by Gary Dessler and guidelines from the Society for Human Resource Management (SHRM).

Answer : A

Understanding the Scenario: The cross-functional team identifies that using distinctive labels for different types of paint can save costs by increasing order volumes and minimizing shortages.

Definition of Aggregation: Aggregation in supply chain management refers to combining orders for similar items to achieve cost savings through economies of scale.

Implementation: By standardizing the labels and increasing order volumes, the team is effectively aggregating their purchasing needs, leading to lower per-unit costs and reduced risk of shortages.

Cost Savings: Aggregation leverages larger order quantities to negotiate better pricing and terms with suppliers, thus contributing to cost savings and operational efficiency.

Reference: Supply chain management literature, such as 'Supply Chain Management: Strategy, Planning, and Operation' by Sunil Chopra and Peter Meindl, highlights aggregation as a key strategy for achieving cost savings and efficiency in procurement.

Answer : B

ISO 14001 Compliance: ISO 14001 requires organizations to have an Environmental Management System (EMS) with clear, measurable objectives and targets.

Concern with Subjectivity: Targets and goals that are subjective and non-quantifiable do not meet ISO 14001 requirements, as they cannot be objectively measured or audited for compliance.

Importance of Quantifiable Goals: Clear, quantifiable targets allow for proper monitoring, measurement, and continuous improvement, which are core components of ISO 14001.

Reference: The ISO 14001 standard itself and environmental management literature, such as 'ISO 14001 Environmental Management Systems: An Easy-to-Use Guide' by Brian J. Gallant, emphasize the need for specific, measurable, and objective targets in an EMS.

Answer : C

Evaluation Focus: When evaluating training courses, the primary concern should be whether the skills taught align with and support the organization's strategic goals and objectives.

Alignment with Goals: Ensuring that training programs are aligned with organizational goals guarantees that the training contributes to the company's overall success and effectiveness.

Importance of Relevant Skills: Training programs that teach relevant skills enhance employee performance and ensure that the workforce is equipped to meet the company's needs.

Reference: Training and development best practices, as outlined in resources such as 'Employee Training & Development' by Raymond A. Noe and the guidelines from the Association for Talent Development (ATD), emphasize the importance of aligning training with organizational goals.

Answer : C

Definition of Direct Cost: Direct costs are expenses that can be directly attributed to the production of a specific product or service. This includes raw materials, labor, and any other costs directly associated with manufacturing.

Highly-Customized Computer Part: The customized nature of the computer part makes it a direct cost because it is a specific component needed for the product assembly.

Relevance to Production: Since the part is essential for the assembly of the product, its cost is directly traceable to the product, fitting the definition of a direct cost.

Reference: Cost accounting literature, such as 'Cost Accounting: A Managerial Emphasis' by Charles T. Horngren, defines and discusses the classification of direct costs and their importance in product costing.

Answer : B

Assessment of current performance: The supervisor's feedback has not resulted in improvement in the buyer's writing style.

Performance evaluation criteria: Unprofessional writing is a significant issue, especially if the provided feedback has not led to any changes.

Performance improvement plan: According to performance management principles, an unsatisfactory rating with a performance improvement plan is appropriate when initial corrective actions fail.

Reference: ''Performance Management: Key Strategies and Practical Guidelines'' by Michael Armstrong discusses the necessity of performance improvement plans for consistent performance issues.

Answer : C

Protecting proprietary information: The primary concern is keeping the formula secret to maintain a competitive advantage.

Non-disclosure agreement (NDA): An NDA legally binds the manufacturer to confidentiality, ensuring they do not disclose the secret formula.

Alternative options:

Trademark: Protects branding, not the formula.

Non-compete agreement: Prevents the manufacturer from competing but doesn't protect the formula itself.

Patent: Public disclosure is required for a patent, which contradicts the goal of keeping the formula secret.

Reference: Intellectual property management literature, such as ''Managing Intellectual Property'' by David Bainbridge, emphasizes the effectiveness of NDAs in protecting trade secrets.