Practice Test Geeks(CPSM) Certified Professional in Supply Management Practice Test
← All CPSM Flashcard Decks

Supply Management Core Flashcards

7 cards from real CPSM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Supply Management Core flashcards as text

  1. Which cost analysis technique separates a supplier's price into labor, material, overhead, and profit components?

    Answer: Cost analysis

    Cost analysis breaks down a supplier's price into its constituent cost elements to evaluate reasonableness, while price analysis compares price without examining cost structure.

  2. A buyer negotiates a contract where the seller is reimbursed for all allowable costs plus a fixed dollar fee. This is a:

    Answer: Cost-plus-fixed-fee contract

    A cost-plus-fixed-fee (CPFF) contract reimburses actual allowable costs and adds a predetermined fee that does not change with cost outcomes.

  3. The Economic Order Quantity (EOQ) model minimizes the sum of which two inventory costs?

    Answer: Ordering costs and carrying costs

    EOQ balances ordering (acquisition) costs, which decrease with larger order sizes, against carrying (holding) costs, which increase with larger order sizes.

  4. A supply manager discovers a sole-source supplier has increased prices by 18% citing raw material inflation. The BEST first step is to:

    Answer: Request a cost breakdown and market data to validate the claim

    Requesting a cost breakdown with supporting market indices allows the buyer to validate whether the claimed inflation justifies the price increase before accepting or rejecting it.

  5. Which incoterm transfers risk from seller to buyer at the named port of destination after the goods are unloaded?

    Answer: DDP

    DDP (Delivered Duty Paid) places maximum obligation on the seller, who bears all risks and costs including import duties until goods are delivered to the named destination.

  6. Make-or-buy analysis should consider all of the following EXCEPT:

    Answer: Supplier's shareholder equity

    A supplier's shareholder equity is not directly relevant to make-or-buy analysis, which focuses on cost, capacity, competency, and strategic fit.

  7. A blanket purchase order is BEST described as:

    Answer: An agreement to purchase an unspecified quantity over a period at agreed terms

    A blanket purchase order establishes pricing and terms for repeated purchases over a defined period without specifying exact quantities or delivery dates in advance.