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Key Facts: CPSM Exam 2 Exam

165

Exam Questions

ISM

2h 45m

Time Limit

ISM

400/600

Passing Score

Each exam

29.1%

Category Management Weight

ISM content outline

$495

Member Exam Fee

ISM current pricing

4 years

Score Validity

ISM

CPSM Exam 2 (Supply Management Integration) contains 165 questions and runs 2 hours 45 minutes. A scaled score of 400 on ISM's 0–600 scale is required to pass. The five content domains are Category Management (29.1%), Supply Chain Strategy (25.5%), Logistics (25.5%), Forecasting/Planning/Inventory (10.3%), and Project Management (9.7%). ISM pricing is $495 for members and $795 for nonmembers, and the exam is delivered through Pearson VUE.

Sample CPSM Exam 2 Practice Questions

Try these sample questions to review concepts for the CPSM Exam 2 exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Business units buy functionally similar protective gloves under different local specifications. Which first step BEST supports a material standardization program?

A.Mandate one specification immediately without consulting users

B.Baseline current specifications, demand, and constraints

C.Award all glove spend to the largest incumbent supplier

D.Freeze glove purchases until every local contract expires

Explanation: A standardization program begins by establishing the current-state requirements and differences. Comparing specifications, usage, stakeholder needs, and mandatory constraints reveals which requirements are genuinely distinct and which can be consolidated before a common standard is designed.

2A manufacturer wants time-phased component requirements to stay aligned with its production plan. Which inputs are ESSENTIAL to a material requirements planning calculation?

A.The annual financial budget and corporate tax forecast

B.Supplier scorecards and the approved-supplier list

C.The master production schedule, bills of material, and inventory records

D.The marketing organization chart and customer credit limits

Explanation: MRP explodes the master production schedule through bills of material, then nets gross requirements against inventory status information such as on-hand balances and scheduled receipts. Those inputs produce time-phased planned orders for components.

3Several customer orders compete for time on the same constrained work center. Which planning approach BEST produces a feasible production schedule?

A.A PESTLE review of the external business environment

B.Finite-capacity scheduling of hours and precedence

C.An unconstrained schedule that ignores available work-center hours

D.A category strategy based only on last year's purchase price

Explanation: Finite-capacity scheduling loads work only within available work-center capacity while respecting routing, sequencing, and precedence constraints. It exposes overloads and supports a schedule that operations can actually execute.

4A service-parts business promises very high availability for critical equipment at customer sites. Which supply chain structure BEST supports that business strategy?

A.One distant warehouse holding all parts with no regional stock

B.A make-to-stock system that allocates every part equally to every location

C.A multi-echelon network with risk-based local stocking

D.Direct shipment of every emergency order from the original component manufacturer

Explanation: A multi-echelon design can place high-criticality, fast-response parts near customers while pooling slower or less critical inventory centrally. That structure aligns inventory location and response time with the service promise without duplicating every item everywhere.

5Multiple plants have approved a common specification for a frequently used maintenance item. Which next step BEST supports a controlled standardization rollout?

A.Convert every plant on the same day without testing the new specification

B.A measured pilot followed by phased adoption

C.Keep all legacy specifications indefinitely so no stakeholder must change

D.Select a new supplier before confirming that the common item performs as required

Explanation: A representative pilot validates technical performance, consumption, user acceptance, and transition assumptions before scale-up. The evidence can then guide a phased rollout, inventory run-down, training, and supplier capacity planning.

6Which supply chain network design decision is PRIMARILY driven by customer service-level requirements and total landed cost?

A.The number and location of distribution centers

B.The choice of ERP system

C.The HR policies for warehouse employees

D.The credit terms offered to end customers

Explanation: Distribution center location and count directly determine delivery lead times (service level) and transportation and inventory carrying costs (total landed cost). These are the core trade-offs in network design optimization. ERP, HR, and credit-term decisions are important but governed by different drivers.

7A company is deciding whether to manufacture a component in-house or outsource it to a contract manufacturer. Which framework BEST structures this make-or-buy decision?

A.Porter's Five Forces

B.TCO analysis plus a core-competency assessment

C.The balanced scorecard

D.SIPOC diagram

Explanation: Make-or-buy analysis should compare the full costs of internal production versus external supply (TCO) and assess whether the component is core to competitive differentiation. If it is not a core competency and external suppliers can produce it at lower TCO, outsourcing is often the right answer. Porter's Five Forces analyzes industry competition, not individual make-or-buy decisions.

8A global manufacturer sources components from Southeast Asia for assembly in Europe and sale in North America. Geopolitical risk is increasing in one supplying country. Which supply chain design strategy BEST improves resilience?

A.Increase safety stock at the European assembly plant to six months of supply

B.Qualified supply in multiple countries or regions

C.Lock in a single-source, long-term contract to reduce supplier switching costs

D.Shift all demand forecasting to the European assembly team

Explanation: Geographically diversified, qualified capacity reduces country-concentration exposure and can preserve continuity if one location is disrupted. The design decision should consider capability, total landed cost, lead time, and correlated risks rather than merely adding nominal suppliers.

9A company is evaluating whether to regionalize its supply chain by sourcing closer to end markets. Which factor would MOST favor a regionalization strategy over global centralized sourcing?

A.Highly standardized commodity products with long shelf lives

B.Short life cycles and rapid demand-response needs

C.Very low transportation costs relative to production cost savings

D.Extremely stable and predictable demand

Explanation: Short product life cycles require fast replenishment and reduced lead times, which favor regional sourcing closer to end markets. Proximity enables rapid demand response, reduces obsolescence risk, and lowers total landed cost when speed-to-market value outweighs production-cost differences.

10A new product is expected to sell for $120 and must earn $30 of profit per unit. The current design is estimated to cost $98 per unit. Which supply management action BEST supports the target-cost objective?

A.Accept the $98 cost and reduce the required profit after launch

B.Supplier-engineering design-to-cost work before design freeze

C.Ask marketing to raise the selling price without testing customer willingness to pay

D.Delay supplier involvement until the complete specification has been released

Explanation: The allowable target cost is $120 minus $30, or $90. Because the current design is $8 above that target, early cross-functional and supplier collaboration can change materials, tolerances, processes, or architecture before design freeze, when changes are less costly.

About the CPSM Exam 2 Exam

CPSM Exam 2 — Supply Management Integration — tests the integrative supply chain knowledge that connects sourcing with broader organizational functions: category strategy, supply chain network design, logistics and transportation, demand and inventory planning, and project management.

Exam sponsor: Institute for Supply Management (ISM) / Pearson VUE. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

165 multiple-choice questions covering five content domains: Category Management (29.1%), Supply Chain Strategy (25.5%), Logistics (25.5%), Forecasting/Planning/Inventory (10.3%), and Project Management (9.7%).

Time Limit

2 hours 45 minutes (165 minutes)

Passing Score

400/600 on ISM's scaled score

Exam / Certification Fees

$495 (member) / $795 (nonmember)

Exam sponsor website

Reported exam pass rate: Not published. ISM does not publish official CPSM pass-rate statistics. Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Official sources

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

29.1% of Exam 2

Category Management

Category segmentation, spend analysis, Kraljic matrix, stakeholder alignment, sourcing waves, and multi-year category strategy.

25.5% of Exam 2

Supply Chain Strategy

Network design and optimization, make-or-buy analysis, resilience and regionalization, sustainability, and SCOR model.

25.5% of Exam 2

Logistics and Transportation

Transportation mode selection, Incoterms 2020, warehousing strategy, landed cost analysis, cross-docking, intermodal, reverse logistics, and 3PL/4PL management.

10.3% of Exam 2

Forecasting, Planning, and Inventory

Demand forecasting methods, S&OP, CPFR, bullwhip effect, EOQ, reorder point, safety stock, ABC analysis, VMI, and consignment inventory.

9.7% of Exam 2

Project Management

Project charter, critical path, float analysis, RACI, risk register, stakeholder management, and implementation governance.

Preparing for the CPSM Exam 2 Exam

What You Need to Know

Passing score: 400/600 on ISM's scaled score
Assessment: 165 multiple-choice questions covering five content domains: Category Management (29.1%), Supply Chain Strategy (25.5%), Logistics (25.5%), Forecasting/Planning/Inventory (10.3%), and Project Management (9.7%).
Time limit: 2 hours 45 minutes (165 minutes)
Exam / certification fees: $495 (member) / $795 (nonmember) Official sources

Using Our Practice Resources

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CPSM Exam 2: Suggested Study Strategy

1Know Incoterms 2020 rules: who pays freight, who bears risk, and at what geographic transfer point — especially FOB, DDP, DAP, and CIF.

2Memorize the Kraljic matrix quadrants (routine, leverage, bottleneck, strategic) and the correct sourcing approach for each.

3Practice EOQ and reorder point calculations — Exam 2 includes quantitative inventory questions.

4Understand the bullwhip effect causes and CPFR as the collaborative remedy — these appear frequently in scenario questions.

5Study S&OP as a cross-functional process, not just a planning tool — know how capacity gaps are identified and resolved.

6For project management, focus on critical path, float, and project charter — Exam 2 covers project management at a functional (not PMI deep) level.

Frequently Asked Questions

How many questions are on CPSM Exam 2?

CPSM Exam 2 — Supply Management Integration — has 165 multiple-choice questions, to be completed in 2 hours and 45 minutes (165 minutes).

What score do you need to pass CPSM Exam 2?

ISM requires a scaled score of 400 on its 0–600 scale to pass CPSM Exam 2. Each CPSM exam is scored and must be passed independently.

What topics does CPSM Exam 2 cover?

Exam 2 tests Supply Management Integration knowledge across five domains: Category Management (29.1%), Supply Chain Strategy (25.5%), Logistics and Transportation (25.5%), Forecasting, Planning, and Inventory (10.3%), and Project Management (9.7%).

How much does CPSM Exam 2 cost in 2026?

As of current ISM pricing, CPSM Exam 2 costs $495 for ISM members and $795 for nonmembers. The fee applies to each attempt, including retakes.

Do you have to take the CPSM exams in order?

ISM does not require candidates to take the three CPSM exams in a specific order. Most candidates sit Exam 1 (Supply Management Core) first, but Exam 2 (Integration) can be taken in any sequence.

What is the difference between CPSM Exam 1 and Exam 2?

Exam 1 (Core) focuses on sourcing, negotiation, legal and contractual issues, and supplier relationship management fundamentals. Exam 2 (Integration) covers the broader integrative supply chain functions: category strategy, supply chain network design, logistics, planning, inventory, and project management.