CORE Exam Dumps : Supply Management Core Exam

The first step the supply manager should take in determining where savings can be found in indirect cost categories is to establish a baseline using current spend data. Understanding the current spending patterns provides a foundation for identifying opportunities for cost savings. It allows the supply manager to analyze spending trends, categorize expenses, and pinpoint areas where efficiencies can be improved or costs can be reduced. This data-driven approach ensures that any subsequent actions are based on accurate and comprehensive information.

References:

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

Institute for Supply Management (ISM). (2020). ISM Glossary of Key Supply Management Terms.

Rebates are considered part of cost containment. Cost containment involves strategies to control or reduce expenses to stay within a budget. Rebates help in this by providing a financial return on purchases, which can be used to offset costs.

Cost avoidance: Focuses on preventing costs from occurring in the first place.

Cost reduction: Involves lowering existing costs.

Cost mitigation: Refers to reducing the severity of costs or financial impacts.

Cost containment: Encompasses methods to manage and control costs, including utilizing rebates.

Thus, rebates fall under cost containment.

References:

Financial management principles on cost containment.

Procurement strategies on leveraging rebates.

Once the project has been approved by senior management and the team has been selected, the next logical step for the supply manager is to conduct market research to identify possible suppliers. This involves gathering and analyzing data about the market to understand the availability of suppliers, their capabilities, and their potential fit with the organization's needs. Market research helps to identify potential suppliers that can meet the raw material requirements, ensuring a robust supply base is developed to support the category management plan. References:

"Purchasing and Supply Chain Management" by Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, and James L. Patterson

Institute for Supply Management (ISM) guidelines on supplier selection and market research