CORE Exam Dumps : Supply Management Core Exam

When a buyer exceeds their spending authority, the company's liability depends on the nature of the authority and the perception of the suppliers.

DEF is only liable for an amount equal to the buyer's actual authority level: This is not entirely accurate as it does not consider apparent authority.

DEF is fully liable for the agreements, as the buyer is an employee of the company: This disregards the limits of authority set by the company.

DEF is responsible for the agreements if the buyer exceeded actual authority, but the suppliers perceived the spend to be within apparent authority: This is accurate as apparent authority refers to the authority a third party perceives the agent to have, even if it exceeds their actual authority.

DEF is responsible for the agreement if the buyer exceeded actual and apparent authority levels, but only for a value equal to the apparent authority amount: This statement mixes concepts and is not correct.

Therefore, DEF is responsible for the agreements if the buyer exceeded actual authority, but the suppliers perceived the spend to be within apparent authority.

References:

Contract law principles regarding actual and apparent authority.

Case studies on organizational liability for employees' actions.

Requesting quotations using generic specifications and performance requirements with forecasted quantities to meet current and future needs is the best course of action for the supply manager. This approach ensures flexibility in selecting the most cost-effective and suitable vehicles while considering future demands. By focusing on specifications and performance, the supply manager can compare different brands and models objectively, ensuring that the chosen vehicles meet the company's operational needs and budget constraints. Additionally, considering future needs allows for strategic planning and potential cost savings through bulk purchasing or long-term contracts. References:

Lysons, K., & Farrington, B. (2016). Procurement and Supply Chain Management. Pearson.

CIPS (Chartered Institute of Procurement & Supply) guidelines on vehicle procurement and fleet management.

Mapping Category Codes and Category Maps: This involves organizing spend data into specific categories to better understand spending patterns.

Normalizing Supplier Information: Ensuring consistency in supplier data to facilitate accurate analysis.

Performing Supplier Mapping: Linking suppliers to specific categories and understanding their spend impact.

Refining with Financial Data: Integrating financial data to get a comprehensive view of spend, enabling more informed decision-making.

Conducting Spend Analysis: These activities are all part of spend analysis, which aims to understand where money is being spent, with whom, and on what terms, to identify cost-saving opportunities and improve procurement efficiency.

References:

CIPS: "Spend Analysis and Cost Reduction"

ISM: "Spend Analysis: The Key to Strategic Sourcing"