CPSM Ethics & Professional Standards in Supply Management

Question 1

According to ISM's Principles and Standards of Ethical Supply Management Conduct, which of the following BEST describes a supply professional's obligation regarding gifts from suppliers?

Accepted Answer

Gifts should be declined or returned when they could influence, or appear to influence, purchasing decisions

Answer

Gifts of any value are acceptable as long as they are disclosed to a manager

Answer

Gifts below $50 in value are always acceptable without disclosure

Answer

Gifts are acceptable from existing suppliers but not from prospective suppliers

Question 2

A supply manager discovers that their spouse holds stock in a supplier that is bidding on a major contract. The MOST ethical course of action is to:

Accepted Answer

Disclose the potential conflict of interest to management and recuse themselves from the decision

Answer

Award the contract to a different supplier without disclosure to avoid awkwardness

Answer

Proceed with the evaluation since the stock is in the spouse's name, not theirs

Answer

Ask the supplier to withdraw from the bid to resolve the conflict

Question 3

The ethical principle of 'confidentiality' in supply management PRIMARILY requires that supply professionals:

Accepted Answer

Protect proprietary information received from suppliers and internal stakeholders from unauthorized disclosure

Answer

Share all supplier bid pricing with competing suppliers to encourage better offers

Answer

Keep all procurement decisions secret from internal customers within the organization

Answer

Avoid documenting supplier negotiations to prevent information leaks

Question 4

Which of the following actions BEST demonstrates adherence to the ISM ethical standard of 'loyalty to your organization'?

Accepted Answer

Recommending a supplier that offers the best value for the organization, even if it means ending a long-standing relationship

Answer

Selecting a supplier owned by a close friend because they offer competitive pricing

Answer

Sharing confidential organizational spend data with a supplier to build a closer relationship

Answer

Accepting a consulting agreement with a supplier while still employed by the buying organization

Question 5

A supplier representative offers a supply manager two tickets to a professional sporting event valued at $350. The supply manager's company policy sets a gift limit of $25. The supply manager should:

Accepted Answer

Decline the tickets and report the offer in accordance with company policy

Answer

Accept the tickets since they are from an existing, trusted supplier

Answer

Accept only one ticket to stay closer to the policy limit

Answer

Accept the tickets but donate them to charity to avoid personal benefit

Question 6

The concept of 'reciprocity' in supply management ethics refers to the problematic practice of:

Accepted Answer

Granting business to a supplier because they purchase your organization's products, rather than based on merit

Answer

Building mutually beneficial long-term supplier partnerships

Answer

Sharing cost reduction ideas between buyer and supplier for joint benefit

Answer

Entering into exclusive agreements with preferred suppliers