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Question 1

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A supplier diversity manager is asked to explain why the 'availability' of diverse suppliers matters when setting program goals. Which explanation is MOST accurate?

Availability data is only relevant for federal contractors, not corporate programs

Availability determines which certifying body a supplier must use

Goals should be set based on the actual number of certified diverse suppliers qualified and available in the market, not arbitrary aspirational numbers

High availability means the company can award all contracts to diverse suppliers

to track

2026 Statistics

Key Facts: CPSD Exam

330 Qs

Total Exam Questions

180 Core + 150 Supplier Diversity

480/600

SD Exam Passing Score

ISM Candidate Handbook

$495

Per-Exam Fee (members)

ISM

14%

Avg Salary Premium

ISM Salary Survey

3 yrs

Certification Validity

60 CEHs to recertify

330 min

Total Exam Time

180 + 150 minutes

The CPSD requires passing two exams: Supply Management Core (180 Qs, 180 min, pass at scaled 400/600) and Essentials in Supplier Diversity (150 Qs, 150 min, pass at scaled 480/600). Exam fees are $495/exam for ISM members and $795 for non-members. Candidates need 5 years of professional experience (or 3 years with a bachelor's degree). CPSM holders only need the Supplier Diversity exam. Certification is valid for 3 years with 60 CEHs required for recertification. ISM-certified professionals earn an average 14% salary premium.

Sample CPSD Practice Questions

Try these sample questions to test your CPSD exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1A company wants to launch a supplier diversity program for the first time. The supplier diversity manager must first secure executive support. Which action BEST builds the business case?

A.Issue an RFQ exclusively to minority-owned suppliers

B.Quantify how diverse suppliers can reduce cost, expand innovation, and support regulatory compliance

C.Require all existing suppliers to obtain diverse-business certifications

D.Set a 50% diverse-spend target before presenting to leadership

Explanation: The business case for supplier diversity must tie program goals to measurable financial and strategic outcomes such as cost reduction, innovation, risk mitigation, and compliance. Presenting a quantified ROI argument is the most effective way to earn executive commitment before program design begins.

2Which certifying body is the primary national organization that certifies Minority Business Enterprises (MBEs) and connects them to over 1,400 corporate members?

A.WBENC

B.NGLCC

C.NMSDC

D.SBA

Explanation: The National Minority Supplier Development Council (NMSDC) is the primary national certifier of Minority Business Enterprises. It connects MBEs to a network of large corporate members who commit to including certified MBEs in their supply base. WBENC certifies women-owned businesses, NGLCC certifies LGBT-owned businesses, and SBA administers several federal small-business programs.

3A supplier diversity manager is reviewing a vendor's credentials. The vendor holds a WBE certification. What ownership requirement must the firm satisfy to receive WBE certification from WBENC?

A.51% owned by a veteran

B.51% owned, controlled, operated, and managed by one or more women

C.51% owned by a racial or ethnic minority group member

D.At least 35% of employees must be women

Explanation: WBENC's Women's Business Enterprise certification requires that the business be at least 51% owned, controlled, operated, and managed by one or more women. Ownership alone is insufficient; the women must also exercise day-to-day control and make long-term decisions.

4A federal contractor must submit a subcontracting plan under FAR Part 19. Which component is required in that plan to satisfy the regulation?

A.A list of all incumbent prime suppliers who are large businesses

B.Percentage goals for small and small disadvantaged business subcontracting

C.A commitment to award at least 50% of subcontracts to minority-owned firms

D.Written approval from NMSDC before the plan is submitted

Explanation: FAR Part 19 subcontracting plans must include percentage goals for small business and various small disadvantaged business categories (including women-owned, HUBZone, veteran-owned, and service-disabled veteran-owned small businesses). The plan is submitted to the contracting officer and must demonstrate good-faith efforts to meet those goals.

5A firm qualifies as a HUBZone-certified business. Which SBA requirement MUST the firm continuously meet to retain this certification?

A.At least 51% owned by a woman or minority group member

B.Principal office located in a HUBZone and at least 35% of employees residing in a HUBZone

C.Annual revenue below $1 million and fewer than 10 employees

D.At least one owner must be a veteran or service-disabled veteran

Explanation: The SBA's HUBZone (Historically Underutilized Business Zone) program requires that the firm's principal office be located in a designated HUBZone and that at least 35% of its employees reside in a HUBZone. The firm must meet these conditions at initial certification and maintain them on an ongoing basis to keep the certification active.

6An organization's supplier diversity team wants to capture second-tier spend data. Which statement BEST describes Tier 2 supplier diversity reporting?

A.Spend with diverse suppliers who are direct subcontractors to the company's prime contractors

B.Spend made directly by the buying organization with certified diverse suppliers

C.Spend reported to the SBA for federal set-aside compliance purposes

D.Spend with majority-owned firms that have supplier diversity programs of their own

Explanation: Tier 2 supplier diversity reporting captures the dollars that a company's prime (Tier 1) suppliers spend with diverse subcontractors on behalf of the buying organization. It extends the program's impact measurement beyond direct procurement and is often required by large corporate or government customers to demonstrate broader supply-chain inclusion.

7The SBA's 8(a) Business Development Program is designed to assist which type of firm?

A.Small businesses located in Historically Underutilized Business Zones

B.Small businesses owned by socially and economically disadvantaged individuals

C.Businesses owned by service-disabled veterans seeking VA contracts

D.Women-owned businesses seeking federal set-aside contracts

Explanation: The SBA 8(a) program is a nine-year business development program for small businesses owned and controlled by socially and economically disadvantaged individuals (generally including racial minorities). Firms in the program can receive sole-source awards and compete for set-aside contracts. HUBZone, SDVOSB, and WOSB programs are separate SBA programs with different eligibility criteria.

8A supplier diversity manager wants to measure the economic impact of the program. Which metric BEST quantifies the downstream community benefit of diverse-supplier spend?

A.Number of diverse suppliers in the approved vendor list

B.Percentage of RFPs sent to certified diverse suppliers

C.Jobs created or retained in diverse communities from diverse-supplier contracts

D.Time to onboard a new diverse supplier

Explanation: Jobs created or retained in diverse communities is a direct economic-impact indicator because it translates purchasing decisions into community outcomes. Supplier diversity programs increasingly measure this to demonstrate social and economic value beyond contract dollars, supporting the business case for continued investment.

9A CPSD candidate is reviewing certifying bodies. Which organization certifies LGBT Business Enterprises (LGBTBEs)?

A.NVBDC

B.Disability:IN

C.NGLCC

D.USPAACC

Explanation: The National LGBT Chamber of Commerce (NGLCC) is the certifying body for LGBT Business Enterprises. NGLCC certification requires that the business be at least 51% owned by one or more LGBT individuals. NVBDC certifies veteran-owned businesses, Disability:IN certifies disability-owned businesses (DOBEs), and USPAACC serves Asian American-owned businesses.

10During a sourcing event, the supplier diversity manager wants to give diverse suppliers the BEST opportunity to compete. Which sourcing practice is MOST aligned with this goal?

A.Bundling multiple categories into a single large contract to maximize leverage

B.Disaggregating large contracts into smaller scopes accessible to diverse suppliers

C.Limiting diverse-supplier participation to the final round of negotiations

D.Sending RFPs only to incumbent large-business suppliers for efficiency

Explanation: Disaggregating contracts into smaller, more accessible scopes lowers the barrier to entry for diverse suppliers who may not have the capacity to compete for a very large bundled contract. This sourcing strategy is a recognized CPSD practice for expanding diverse-supplier participation in competitive sourcing events.

About the CPSD Exam

The CPSD certification from the Institute for Supply Management validates knowledge and expertise in supplier diversity. Candidates must pass two exams: the Supply Management Core Exam (180 questions, 180 minutes) covering sourcing, negotiation, contracts, supplier relationships, cost management, and financial analysis; and the Essentials in Supplier Diversity Exam (150 questions, 150 minutes) covering diversity program development, stakeholder management, diverse supplier certification/qualification, metrics, advocacy, and sustainability/ethics. CPSM holders are exempt from the Core Exam.

Questions

330 scored questions

Time Limit

330 minutes (two exams)

Passing Score

Scaled 400/600 (Core), 480/600 (Supplier Diversity)

Exam Fee

$495/exam (member) / $795/exam (non-member) (ISM (Pearson VUE))

CPSD Exam Content Outline

11%

Developing Business Case / Executive Support

Integrating supplier diversity into organizational strategy, advising senior management, and aligning with corporate diversity initiatives

18%

Developing a Supplier Diversity Program

Program design, diverse supplier directories, diversity goals alignment, best practices, standards, and prime supplier initiatives

Project Management

Performing project management activities for supplier diversity initiatives

11%

Influencing and Partnering with Internal Stakeholders

Consulting stakeholders, providing training on diverse sourcing, managing concerns, and developing cross-functional advocates

Diverse Supplier Certification Process

Determining and developing diverse supplier certification requirements

Diverse Supplier Qualification Process

Establishing qualifications, screening systems, and identifying diverse suppliers for sourcing teams

Developing Diverse Suppliers

Training on business priorities, mentoring programs, and multi-tier initiatives for diverse suppliers

Managing Relationships with Diverse Suppliers

Maintaining supplier relationships, monitoring progress, continuous improvement, and performance management

Financing and Budgeting

Defining ROI for supplier diversity programs and developing budget and financial support for initiatives

10%

Establishing Metrics and Reporting

Designing metrics, benchmarking with peers, reporting diversity spend, and preparing data for stakeholders and regulators

11%

Performing Advocacy and Market Outreach

Attending conferences, developing marketing tools, conducting presentations, and representing the organization externally

Sustainability, Social Responsibility and Ethics

Sustainability programs, safety policies, business conduct codes, and anti-discrimination policies within the supply chain

How to Pass the CPSD Exam

What You Need to Know

Passing score: Scaled 400/600 (Core), 480/600 (Supplier Diversity)
Exam length: 330 questions
Time limit: 330 minutes (two exams)
Exam fee: $495/exam (member) / $795/exam (non-member)

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

CPSD Study Tips from Top Performers

1Start with the Supply Management Core Exam — it covers foundational procurement concepts shared with the CPSM

2Focus on the Essentials in Supplier Diversity exam's higher passing threshold (480 vs 400) by spending extra time on its content domains

3Study the 12 task areas of the Supplier Diversity exam: business case development, program design, stakeholder engagement, certification, qualification, supplier development, relationship management, finance, metrics, advocacy, and ethics

4Practice scenario-based questions — ISM exams test application of concepts, not just memorization

5Learn diverse supplier classification categories: MBE, WBE, SDVOSB, HUBZone, LGBTBE, and DOBE

6Understand federal regulations including Executive Order 13985, SBA 8(a), and FAR subcontracting requirements

Frequently Asked Questions

What is the CPSD certification?

The CPSD (Certified Professional in Supplier Diversity) is a certification from the Institute for Supply Management (ISM) for supply professionals who demonstrate knowledge, skills, and expertise in supplier diversity. It validates your ability to develop and manage supplier diversity programs that improve organizational bottom lines and accelerate innovation through diverse supply bases.

How many exams are required for the CPSD?

The CPSD requires passing two exams: the Supply Management Core Exam (180 questions, 180 minutes) and the Essentials in Supplier Diversity Exam (150 questions, 150 minutes). If you already hold an active CPSM certification, the Supply Management Core Exam is waived, and you only need to pass the Supplier Diversity exam.

What is the passing score for the CPSD exams?

CPSD exams use scaled scoring from 100-600. The passing score for the Supply Management Core Exam is 400. The Essentials in Supplier Diversity Exam has a higher passing threshold of 480. Scores are reported in increments of 10, and results are received immediately after testing.

How much does the CPSD exam cost?

Each CPSD exam costs $495 for ISM members and $795 for non-members. Since two exams are required, the total exam cost is $990 for members and $1,590 for non-members. The application fee is $0 for members and $295 for non-members. ISM membership is $250/year and can significantly reduce total costs.

What are the CPSD eligibility requirements?

Candidates must have a minimum of 5 years of professional (nonclerical, nonsupport) supplier diversity or supply management experience without a degree, or 3 years with a bachelor's degree from a regionally accredited institution. The experience does not need to be your primary function. CPSM holders do not need to submit work experience documentation.