CPSM CORE Exam Dumps

Scenario Overview: The supply manager issued an RFQ to five suppliers; three declined, and the remaining two raised concerns about risk and pricing.

Conference Outcome: A conference revealed that only three tolerances were critical, leading to a revised RFQ.

Value Engineering: This process involves evaluating a project to reduce costs while maintaining quality by identifying essential versus non-essential specifications.

Supply Manager’s Role: By facilitating this discussion, the supply manager helped reduce project costs and risks, demonstrating the principles of value engineering.

References

CIPS. (n.d.). Value Engineering in Procurement.

ISM. (n.d.). Cost Management and Value Engineering.

The first step in preparing a department's budget is to understand and align with the organization's overall goals. This ensures that the budget supports the strategic objectives and priorities of the organization.

Controlling expenditures during the budgetary year: This is part of budget execution and management, not the initial step.

Reviewing the organization's goals: The first step is to ensure that the budget aligns with and supports the organization’s strategic goals and objectives. This alignment ensures that resources are allocated appropriately to achieve these goals.

Defining the needed resources: This comes after understanding the organization's goals, as it helps to determine what resources are necessary to meet those goals.

Presenting the budget for review: This is one of the final steps in the budget preparation process.

Therefore, the first step in the budget preparation process is reviewing the organization's goals.

References:

Financial management best practices.

Budget preparation guidelines from the Institute of Management Accountants (IMA).

Initial Bids Review: Evaluate the bids submitted by the suppliers ($110,000, $114,000, and $135,000).

Lowest Bid Consideration: The lowest initial bid of $110,000 should be the baseline because it represents the market's competitive price before any negotiation.

Calculate Cost Avoidance: After negotiations, the final cost is $105,000. The cost avoidance is calculated against the $110,000 baseline, showing the savings achieved through negotiation.

References

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning.

Burt, D. N., Petcavage, S. D., & Pinkerton, R. L. (2010). Supply Management. McGraw-Hill Education.

Quality Improvement: The supply manager wants to reduce the number of defective parts from a supplier in Malaysia.

Six Sigma: This methodology focuses on reducing defects and improving quality through data-driven analysis and process improvements.

Implementation: Applying Six Sigma principles can help identify the root causes of defects and implement systematic improvements.

Continuous Improvement: Six Sigma promotes a culture of continuous improvement, ensuring long-term quality enhancement and defect reduction.

References

ASQ. (n.d.). Six Sigma: A Comprehensive Overview.

ISM. (n.d.). Quality Management in Global Supply Chains.