DEF, Inc. is a medium-sized manufacturer in the precious metals industry. Continued price increases in precious metals have put a strain on the financial resources of suppliers, and while some have closed their businesses, others have converted to lower cost metals. DEF's supply manager is concerned not only about the evaporation of the specialty supply base but also that marketing efforts into new online markets are providing new growth and renewed demand for long-established product lines. The supply manager determines that although little precious raw material Is used internally in the organization, the combined volumes from component manufacturers are large and growing.
Which of the following should the supply manager employ to gain value under these conditions?

• A. Transformation management
• B. Multi-tier purchasing agreements
• C. Risk avoidance
• D. Value stream mapping

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EFG uses specialized components from Supplier A in the manufacture of state-of-the-art testing equipment.
Supplier A has been very successful in meeting EFG's stringent quality specifications, which has been critical for EFG.
EFG learns that Supplier A plans to acquire a smaller firm which makes components similar to those under contract with EFG. EFG is concerned that the supplier may transfer its contract to the new subsidiary, leading to compromises in quality. Given this situation, which of the following is the BEST course of action for EFG to take?

• A. Take no action, as Supplier A must supply the chips at the same quality level no matter who manufactures them
• B. Negotiate with Supplier A to add a consent of assignment clause to the contract
• C. Negotiate with Supplier A to remove the changes clause from the contract
• D. Negotiate with Supplier A to strengthen the indemnification clause in the contract

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RST, Inc. is a global electronics manufacturer which has purchased electronic assemblies from Supplier X for many years. RST has experienced occasional quality problems with these assemblies, and these problems have caused significant delays in production. Because RST's senior management regards Supplier X as a loyal supplier, the firm has not looked to replace it. Nevertheless, RST's supply manager feels that Supplier X has become complacent in Its relationship with RST and is behind the market in important technological advances.
Which of the following should the supply manager do FIRST to convince RST's senior management to re-source the electronic assemblies?

• A. Perform an on-site quality assessment of Supplier X
• B. Present a global business case to senior management, as the market for the assemblies is international
• C. Begin the seven-step strategic sourcing process
• D. Present a value analysis of Supplier X to both RST's and Supplier X's senior management

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

• A. communications with stakeholders are held face-to-face
• B. stakeholders are regarded as equally important
• C. communications are tailored to each stakeholder
• D. goals are given precedence over a team environment

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

• A. His/her personal interest
• B. The interests of the profession
• C. The interest of the organization that employs him/her
• D. The interests of the supplier which overlap with those of the buyer

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