CPSM Procurement & Sourcing 5

Question 1

Which sourcing approach is most appropriate when specification requirements are unclear at project outset?

Accepted Answer

Performance-based contracting with outcome metrics

Answer

Performance-based contracting defines desired outcomes rather than prescriptive specs, giving suppliers flexibility when requirements cannot be fully detailed upfront.

Question 2

A supplier's Cpk index of 1.33 indicates that the process is:

Accepted Answer

Capable and meeting quality specifications with adequate margin

Answer

A Cpk of 1.33 (4-sigma) demonstrates the process is centered and capable, with a 99.994% yield rate, exceeding the minimum acceptable threshold of 1.0.

Question 3

In international procurement, an Incoterms® DDP (Delivered Duty Paid) term means the seller is responsible for:

Accepted Answer

All costs and risks including import duties and delivery to buyer's premises

Answer

DDP represents maximum seller obligation, covering all transport costs, export and import duties, and delivery to the named destination.

Question 4

Which metric best measures procurement's contribution to organizational value beyond cost savings?

Accepted Answer

Total value delivered, including risk mitigation and innovation

Answer

Total value delivered captures procurement's broader contributions such as risk reduction, supplier innovation, and supply chain resilience, beyond simple price savings.

Question 5

A 'should-cost' model in procurement is used to:

Accepted Answer

Estimate what a product or service should cost based on materials, labor, and overhead

Answer

Should-cost analysis builds up an independent cost estimate from first principles, giving the buyer a fact-based target for negotiation.

(CPSM) Certified Professional in Supply Management Practice Test

(CPSM) Certified Professional in Supply Management Practice Test

CPSM Procurement & Sourcing 5