LEAD

LEAD practice questions, page 5 of 7, with answer review and explanations.

Question 21

Standard costs for a part are established at $3.18 per unit at the beginning of the year. Several months later, during a period of short supply, the firm pays $3.40 per unit for this part, when the going market price is $3.62. What is the net result of the purchase?

  1. Favorable price variance of 22 cents per unit
  2. Favorable price variance of 44 cents per unit
  3. Unfavorable price variance of 22 cents per unit
  4. Neutral price variance due to market scarcity

Question 22

Supply management can BEST nurture strategic partnerships with other business units through which of the following?

  1. Contributions to the firm’s bottom line
  2. Well-defined initiatives and outcomes
  3. Continuous supply chain materials for production
  4. Marketing buy-in and support

Question 23

A firm has been experiencing difficulty in turning out new products as fast as its competitors and is failing to meet projected sales as a result. Given this situation, which of the following would be MOST appropriate as a mission statement for this firm’s supply management department?

  1. “To attain continuous reduction in supplier costs”
  2. “To identify and mitigate supply risks, thereby ensuring continuity of supply”
  3. “To acquire value-adding technologies and leverage supplier capabilities”
  4. “To improve the efficiency of the supply management department”

Question 24

Smith is a supply manager for a centralized supply chain organization supporting several regions. Several key regional customers have given Smith positive feedback for decreasing costs and helping the regions meet their objectives. However, Smith’s supervisor does not give Smith a favorable review, saying that department peers do not regard Smith as a team player. Smith feels the review process has been unfair and appeals the review to the vice president (VP) of procurement. Based on this information, which of the following is the BEST course of action for the VP to take?

  1. Increase the weighted percentage of internal customer feedback in the performance review process
  2. Provide Smith with a performance improvement plan that defines specific goals and metrics required for a successful review
  3. Re-align the organization so that Smith reports to a more capable supervisor
  4. Establish quantitative review criteria that measure the ability to meet organizational goals

Question 25

A manufacturing firm’s annual report includes a section describing the environmental effects of the firm’s various activities and processes. This is an example of which of the following?

  1. Risk mitigation
  2. Triple bottom line accounting
  3. Dedicated scorecard
  4. Social accounting