CPSM

A sourcing manager is considering suppliers for a new category and wants to understand which vendors can meet technical requirements before asking for pricing. Which document should be issued first?

• ARFI
• BRFQ
• CPurchase order
• DChange order

Two suppliers offer the same item, but one has a lower unit price while the other has lower freight costs, better payment terms, and fewer defects. Which evaluation method BEST compares the offers?

• APareto chart
• BSupplier audit
• CTotal cost of ownership analysis
• DReverse auction

A buyer is sourcing a custom component that is critical to production. One supplier is slightly cheaper, but two qualified suppliers are available. Which sourcing strategy BEST balances cost and continuity?

• AAward 100% to the lowest-cost supplier
• BSplit the award between both qualified suppliers
• CDelay award until a third supplier appears
• DBuy only on the spot market

During a complex source selection, stakeholders care about quality, innovation, implementation speed, and price. Which evaluation approach MOST reduces bias and supports a defensible award?

• AChoose the incumbent unless a competitor is dramatically cheaper
• BLet each evaluator rank suppliers using personal criteria
• CAward to the lowest bidder that met minimum specifications
• DUse a weighted scoring model agreed before proposals are reviewed

Specifications are complete and the buyer expects award to be based primarily on price and commercial terms. Which sourcing document is MOST appropriate?

• ARFI
• BNDA
• CRFQ
• DStatement of work

Before entering a final negotiation round, which preparation step gives the buyer the strongest leverage?

• ADefine the BATNA and walk-away point
• BPromise the supplier future business
• CReveal the budget ceiling
• DShorten the meeting agenda

Which concession tactic is generally the MOST effective in supplier negotiations?

• AMake all concessions at the start
• BExchange each concession for something of value
• COffer small gifts to build goodwill
• DAvoid documenting concessions until the contract is signed

A supplier says, 'This price is valid only if you sign today,' even though the market is stable and no real shortage exists. What is the BEST buyer response?

• AAccept immediately to avoid losing the offer
• BEnd all discussions permanently
• CDisclose the internal target price
• DTest the deadline and continue negotiating based on facts

In a multi-issue negotiation covering price, payment terms, lead time, warranty, and volume, which approach is MOST likely to create joint value?

• AResolve one issue at a time, starting with price
• BRefuse to discuss any issue except unit cost
• CPackage multiple issues and trade across them
• DKeep all interests hidden until the final meeting

A supplier will not meet the buyer's target price for a commodity-like item but is willing to discuss demand certainty. Which response is MOST likely to improve total value?

• ACancel the event and restart with new suppliers
• BTrade a longer-term volume commitment for better pricing and service protections
• CAccept the original quote with no changes
• DFocus only on adding stricter penalties

Which buyer statement MOST weakens the buyer's negotiating position?

• AWe are comparing several qualified suppliers.
• BPlease explain your cost drivers.
• CWhat lead-time improvements are possible?
• DWe must stay below $2 million or the project is cancelled.

What is the primary purpose of an indemnification clause in a supply contract?

• ATo allocate responsibility for certain losses or third-party claims
• BTo define the payment schedule
• CTo set the currency exchange rate
• DTo describe packaging dimensions

A contract includes a master agreement, a statement of work, and a purchase order. What clause BEST prevents disputes if those documents contain conflicting terms?

• AAuto-renewal clause
• BForce majeure clause
• COrder of precedence clause
• DSeverability clause

When scope is well defined and the buyer wants the supplier to bear most cost-overrun risk, which contract type is BEST?

• ACost-plus percentage
• BFirm-fixed-price
• CTime and materials
• DOpen account

A supplier will develop custom software specifically for the buyer. Which contract clause is MOST important for defining who can use and own the resulting deliverables?

• AGoverning law
• BAudit rights
• CPayment terms
• DIntellectual property ownership and licensing

What is the main purpose of a supplier scorecard?

• ATo measure supplier performance against agreed KPIs
• BTo replace the contract
• CTo track only supplier profitability
• DTo eliminate the need for business reviews

A strategic supplier has strong quality performance but recurring late deliveries caused by capacity constraints. What is the BEST supplier relationship management response?

• AImmediately terminate the supplier
• BIgnore the issue because quality is strong
• CDevelop a joint corrective action plan that addresses root causes and capacity
• DMove all spend to the lowest-cost bidder

Which supplier is the BEST candidate for regular executive business reviews?

• AA low-spend office supply vendor with many substitutes
• BA supplier that is high value, high risk, or strategically important
• CA spot-market broker used once per year
• DA supplier that only provides one noncritical service

A company co-develops a new product with a key supplier and both sides are investing engineering resources. Which supplier relationship management governance model is MOST appropriate?

• ANo formal governance so teams can move faster
• BAnnual price-only reviews with procurement
• CSupplier self-reporting without buyer participation
• DA cross-functional governance structure with joint KPIs and executive escalation paths

A supplier misses an on-time delivery KPI because a hurricane shut down its port for several days. How should the buyer interpret this in the scorecard process?

• ATreat it as normal poor performance and trigger penalties automatically
• BRemove the supplier from the approved list immediately
• CReview the exception in context and separate force majeure events from normal performance…
• DIgnore the incident completely and stop measuring delivery

What does OTIF measure?

• AOrder-to-invoice finance
• BOn-time and in-full delivery performance
• COverall tariff impact factor
• DOperating time in factory

What is the primary goal of a supplier development program?

• AImprove a supplier's capability and performance
• BCreate dependency so the supplier cannot serve competitors
• CReplace all scorecards with site visits
• DShift all responsibility for performance to the supplier

A supplier represents a relatively small share of spend, but its component has no approved substitute and a shortage would stop production. Which factor should keep this supplier from being managed as purely transactional?

• AThe supplier's office location
• BThe buyer's annual travel budget
• CThe color of the component packaging
• DThe supplier's supply risk and operational criticality

Which agenda is MOST effective for a quarterly business review with a strategic supplier?

• AFocus only on open invoices
• BDiscuss past performance, upcoming demand, risks, and improvement actions
• CLimit the meeting to contract signature status
• DSpend the meeting renegotiating every line item

How can a buyer BEST reinforce high performance from top suppliers?

• AReduce communication so the supplier can work independently
• BShare competitor quotes to increase pressure
• CRecognize strong performance and link future opportunities to results
• DAvoid setting any new targets

What is usually the FIRST analytical step in category management?

• ABaseline the spend, demand patterns, and supply market
• BRun a reverse auction immediately
• CConsolidate all suppliers before analysis
• DRewrite every contract

What is the primary objective of category management?

• ATo buy every item through the same supplier
• BTo delegate all buying decisions to finance
• CTo manage related spend as a portfolio to maximize value and reduce risk
• DTo avoid stakeholder involvement in sourcing

Different business units buy the same packaging material from different suppliers at widely different prices. What should the category manager do FIRST?

• ALet each unit continue buying independently
• BCompare specifications and aggregate demand where requirements can be standardized
• CSwitch everyone to the incumbent supplier
• DCancel all contracts at once

Why might a procurement team manage MRO supplies separately from direct production materials, even if total spend is similar?

• AMRO suppliers always offer shorter contracts
• BDirect materials never affect working capital
• CThe categories are identical but easier to report separately
• DThe categories have different demand patterns, stakeholders, and sourcing levers

A manufacturer wants to improve resilience for a critical component sourced from a region prone to disruption. Which strategy is MOST effective?

• AReduce safety stock to free cash
• BQualify geographically diverse supply sources
• CRely only on expediting
• DMove all volume to the lowest-cost plant

What is a common tradeoff in a lean supply chain design?

• ALower inventory buffers can increase vulnerability to disruption
• BHigher inventory always improves cash flow
• CMore suppliers always reduce administrative work
• DLonger lead times always lower total cost

A product line has stable demand, predictable replenishment, and thin margins. Which supply chain emphasis is MOST appropriate?

• AMaximize customization at every node
• BPrioritize speed regardless of cost
• CFocus on efficiency, standardization, and asset utilization
• DHold excess premium freight capacity year-round

Which pattern is the strongest indicator of a bullwhip effect in the supply chain?

• ASuppliers hold less safety stock than buyers
• BOrder lead times are longer than transit times
• CInventory turns improve after a demand drop
• DEnd-customer sales are stable but upstream orders swing sharply

Demand for a product has become strongly seasonal. Which forecasting approach is MOST appropriate?

• AUse a simple average of all historical months
• BUse a model that explicitly accounts for seasonal patterns
• CIgnore history and forecast only by judgment
• DSet next year's forecast equal to current inventory

What is the main purpose of safety stock?

• ATo increase the purchase price
• BTo replace cycle counting
• CTo buffer against demand or supply uncertainty
• DTo eliminate the need for forecasting