ISM Updated CORE Exam Questions and Answers by noelle

The best description of the strategic sourcing process is D. A series of actions to identify suppliers to provide needed products/services for the organization. Strategic sourcing is a systematic and data-based approach for optimizing an organization’s vendor base and improving overall value propositions for software and services1. It involves planning, managing, and optimizing supply chain activities, which includes identifying suitable suppliers2.

The supplier's request for the procurement team to turn off and put away cell phones with cameras is primarily to protect the confidentiality of their proprietary manufacturing processes. In the competitive toy manufacturing industry, the specific techniques and processes used to create products can be considered trade secrets. Allowing visitors to use cameras could risk capturing and potentially sharing these secrets, which could be detrimental to the supplier’s competitive advantage and violate the non-disclosure agreements in place with other customers.

References

Trade Secrets Protection: A Guide to the Law and Practice by Jane Lambert

"Non-Disclosure Agreements (NDAs) in Manufacturing" - American Bar Association

Understanding the Contract Needs: The supply manager's primary concern is ensuring that the software meets PQR's performance expectations and that there are clear consequences if these expectations are not met.

Service-Level Agreements (SLAs): SLAs are contractual commitments between a service provider and a client. They specify the performance standards the provider must meet and the remedies or penalties for failing to meet them.

Performance Expectations: By including SLAs in the contract, the supply manager ensures that there are measurable performance metrics for the software, such as uptime, response time, and resolution time for issues.

Consequences of Failure: SLAs also outline the consequences if the vendor fails to meet the agreed-upon standards. This can include penalties, service credits, or termination of the contract.

Protective Covenants, Warranties, and Maintenance and Support: While these are important, they do not directly address the performance expectations and consequences of failure as effectively as SLAs.

References

CIPS (Chartered Institute of Procurement & Supply). (n.d.). Service Level Agreement (SLA) - A detailed guide.

SCMDOJO. (n.d.). The importance of SLAs in Procurement Contracts.

In situations where a consultant performing audit services also engages in other non-audit work for the company, a conflict of interest may arise, compromising the integrity and objectivity of the audit. It is crucial to address this issue transparently with the CEO, explaining the potential conflict and recommending alternative solutions, such as engaging a different consultant or firm for the audit. This approach ensures compliance with ethical standards and maintains the credibility of the audit process.References:

IFAC (International Federation of Accountants) Code of Ethics for Professional Accountants.

ISM (Institute for Supply Management) guidelines on professional services procurement.