ISM LEADership and Transformation in Supply Management Exam Practice Test

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Total 165 questions
Question 1

An employee who has been competent and reliable in the past suddenly exhibits erratic behavior and makes mistakes which could have a serious impact on the department as well as the company. The department supervisor learns that the employee is trying to cope with extraordinary family challenges. Given this situation, which of the following is the BEST course of action for the supervisor to take?



Answer : B

When an employee exhibits erratic behavior and performance issues due to extraordinary family challenges, the best course of action for the supervisor is to refer the employee to the company's employee assistance program (EAP). EAPs provide confidential counseling and support services to help employees deal with personal problems that might affect their work performance. This approach demonstrates empathy and support for the employee while also addressing the underlying issues that may be impacting their job performance.


Dessler, G. (2013). Human Resource Management. Pearson Education.

Armstrong, M. (2009). Armstrong's Handbook of Human Resource Management Practice. Kogan Page Publishers.

Question 2

Which of the following is MOST critical in the creation of a succession plan?



Answer : B

The most critical aspect in the creation of a succession plan is conducting a gap analysis of the workforce.

Gap Analysis: This involves identifying the skills, competencies, and positions that are currently lacking or will be needed in the future. It helps in understanding where the organization stands and what it needs to develop to ensure leadership continuity.

Succession Planning: By analyzing gaps, organizations can create targeted development plans to prepare employees for future roles, ensuring a smooth transition and minimizing disruptions.

Strategic Alignment: Gap analysis aligns the workforce development with the strategic goals of the organization, ensuring that future leaders are equipped with the necessary skills and knowledge.


Rothwell, W.J. (2010). Effective Succession Planning: Ensuring Leadership Continuity and Building Talent from Within. AMACOM.

Charan, R., Drotter, S., & Noel, J. (2010). The Leadership Pipeline: How to Build the Leadership Powered Company. John Wiley & Sons.

Question 3

A supply manager for XYZ Inc. unknowingly sources a defective component, triggering a mass recall of the end product. One of XYZ's competitors has a representative appear on a television program, and the representative states that XYZ knowingly used the defective component, thus endangering the end customer. Based on this information, on what grounds can XYZ seek legal action against this competitor?



Answer : A

Understanding Defamation Terms:

Libel: Written or published false statements that damage a person's reputation.

Disparagement: False and injurious statements specifically about a business's goods or services.

Estoppel: A legal principle preventing someone from arguing something contrary to a claim made or implied by their previous actions or statements.

Slander: Spoken false statements that damage a person's reputation.

Case Details:

XYZ's competitor made a statement on a television program, implying written or published format.

The statement falsely claimed that XYZ knowingly used a defective component, harming their reputation.

Conclusion: Since the statement was made in a public and broadcast format, it falls under libel, which covers defamatory statements made in a written or published manner.


Legal definitions and distinctions from Cornell Law School's Legal Information Institute

Case law examples related to defamation, specifically libel

Question 4

Jones is a highly motivated leader who exceeds all standards for excellence. However, Jones has also been criticized for micro-managing employees, taking over tasks, giving employees little feedback or direction, and cutting comers during busy periods in order to meet production goals. Jones is MOST likely which of the following types of leaders?



Answer : B

Jones exhibits characteristics of an achievement-oriented leader, focusing on high standards and task completion but also showing tendencies that can hinder team performance.

High Standards and Excellence: Jones's motivation and drive to exceed standards align with achievement-oriented leadership, which emphasizes setting and achieving high-performance goals.

Micro-Management: While aiming for excellence, Jones's tendency to micro-manage and take over tasks suggests an overemphasis on control and task completion, often seen in achievement-oriented leaders.

Lack of Feedback: This behavior can result from focusing too much on outcomes rather than the process, a common trait among achievement-oriented leaders who might prioritize goals over employee development.

Cutting Corners: The willingness to cut corners to meet production goals indicates a focus on results, often at the expense of thoroughness and quality, another characteristic of an overly achievement-focused leadership style.


House, R.J., & Mitchell, T.R. (1974). Path-Goal Theory of Leadership. Journal of Contemporary Business.

McClelland, D.C. (1961). The Achieving Society. Princeton, NJ: Van Nostrand.

Question 5

Supply management can track supplier performance, send alerts on important dates and generate reports for compliance officers through which of the following?



Answer : B

Contract management software is designed to handle all aspects of contract lifecycle management, including tracking supplier performance, sending alerts on important dates, and generating reports for compliance officers.

Tracking Supplier Performance: Contract management software provides tools to monitor and evaluate supplier performance against contract terms, ensuring that suppliers meet their obligations.

Alerts and Notifications: The software can send automatic alerts for important dates such as contract renewals, expirations, and compliance deadlines, helping supply managers stay on top of key milestones.

Reporting Capabilities: Contract management software includes reporting features that allow supply managers to generate detailed reports for compliance officers, ensuring that the organization adheres to regulatory and contractual requirements.


Monczka, R.M., Handfield, R.B., Giunipero, L.C., & Patterson, J.L. (2015). Purchasing and Supply Chain Management. Cengage Learning.

Aberdeen Group. (2008). Contract Management: The Key to Strategic Supplier Relationships. Aberdeen Research Report.

Question 6

A supply manager is responsible for managing a team of transactional buyers. While reviewing transaction logs, the supply manager notices that one of the buyers is listed as the requisitioner on an unusually large number of the purchase orders. The supply manager suspects improper activity and wants to investigate the matter further. Given this situation, which of the following will be MOST useful to the supply manager?



Answer : B

To investigate the potential improper activity indicated by the buyer being listed as the requisitioner on many purchase orders, the procurement standard operating procedures (SOPs) will be most useful. The SOPs will provide detailed guidelines on the procurement process, including roles and responsibilities, which can help identify if any rules or protocols have been violated. Leadership and transformation management documents stress the importance of adhering to SOPs to ensure compliance and transparency in procurement activities. By reviewing the SOPs, the supply manager can compare the buyer's actions against established procedures to determine if there has been any improper conduct. Reference highlight the role of SOPs in maintaining accountability and integrity within supply management operations.


Question 7

DEF Company acquires MNO, Incorporated. The new firm's chief procurement officer (CPO) is tasked with consolidating duplicate components under one supplier for the lowest total cost. The CPO plans to use the firms' combined cognitive procurement system to complete this task. Which of the following will this system MOST likely yield in order to aid the CPO?



Answer : B

Using the firms' combined cognitive procurement system, the CPO is most likely to yield information on the price, quality, performance, and reliability of the components and the suppliers. This data is crucial for consolidating duplicate components under one supplier for the lowest total cost.

Cognitive Procurement Systems: These systems utilize artificial intelligence and data analytics to provide comprehensive insights into procurement activities. They help in assessing various parameters such as cost, quality, and supplier performance.

Decision-Making: Having detailed information on price, quality, performance, and reliability allows the CPO to make informed decisions about which suppliers to consolidate, ensuring that the best overall value is achieved.

Optimization: This approach helps in optimizing the supply chain by selecting suppliers that offer the best combination of cost efficiency and reliability, ultimately reducing total procurement costs.


Handfield, R.B., & Nichols, E.L. (1999). Introduction to Supply Chain Management. Prentice Hall.

Monczka, R.M., Handfield, R.B., Giunipero, L.C., & Patterson, J.L. (2015). Purchasing and Supply Chain Management. Cengage Learning.

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Total 165 questions