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New 630-007 trainning materials
Exam Number/Code: 630-007
Questions and Answers:201 Q&As
Updated Time: 2009-09-06
Register for Exam: Prometric/Pearson VUE
Exam Name:C.P.M. Module 3: Value Enhancement Strategies
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Exam : ISM 630-007
Title : C.P.M. Module 3: Value Enhancement Strategies
1. Which of the following is the MOST commonly sought-after piece of inventory
information?
A. The date the inventory is taken.
B. The current price of the items.
C. Inventory I.D. numbers.
D. Quantities.
Answer: D
2. Which of the following represents the BEST strategy for minimizing price risk in a
falling market?
A. Hedging.
B. Forward buying.
C. Hand-to-mouth buying.
D. Buying to requirements.
Answer: C
3. When would a purchasing manager generally use a third-party lease as a financing
instrument?
A. When purchasing equipment from the manufacturer with someone else’s money.
B. When acquiring equipment from one party and maintenance from another.
C. When arranging an assignment agreement with a bank.
D. When transferring the asset to the internal customer.
Answer: A
4. Which of the following statements is FALSE?
A. An operational lease has a non-cancelable term varying from hours to years.
B. An operational lease is a total financial commitment by the lessor.
C. In operational leases, payments are fixed payments per period.
D. Operational leases stress service.
Answer: B
5. Which of the following are the two basic categories of costs associated with
inventories from a management point of view?
A. Supplies and services costs.
B. Storage and incremental costs.
C. Carrying costs and acquisition costs.
D. Obsolescence and deterioration costs.
Answer: C
6. Which of the following represents the MOST common reason for a public or
nonprofit corporation to use lease/purchase agreements to obtain equipment?
A. To gain tax advantages.
B. To avoid capital expenditures.
C. To reduce maintenance needs.
D. To gain depreciation advantages.
Answer: B
7. Which of the following is the FIRST step in standardization?
A. Collecting data.
B. Simplifying standards.
C. Establishing objectives.
D. Publicizing the program.
Answer: A
8. Which of the following should a purchaser utilize when there is a need to minimize
financial risk in a sensitive market?
A. Cash flow management.
B. Long-term relationships.
C. Market demand analysis.
D. Hedging using futures contracts.
Answer: D
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