CPSM Supply Management Core 3 — Questions and Answers
Question 1: Which supplier evaluation method assigns numerical weights to multiple criteria and scores each supplier against those criteria?
- Supplier audit
- Categorical method
- Weighted-point method (Correct answer)
- Cost-ratio method
Correct answer: Weighted-point method
The weighted-point method quantifies supplier performance by assigning importance weights to criteria such as quality, delivery, and price, then scoring and multiplying each to produce a composite score.
Question 2: In supply chain risk management, 'supply chain mapping' is primarily used to:
- Identify geographic routes for logistics optimization
- Visualize relationships and dependencies across multiple tiers of suppliers (Correct answer)
- Assign responsibility for risk mitigation to specific buyers
- Calculate landed cost for imported goods
Correct answer: Visualize relationships and dependencies across multiple tiers of suppliers
Supply chain mapping creates a visual representation of supplier relationships beyond first-tier suppliers, enabling identification of hidden risks and single points of failure.
Question 3: A spend analysis is PRIMARILY used to:
- Monitor individual purchase order compliance
- Identify consolidation opportunities and sourcing priorities (Correct answer)
- Evaluate supplier financial stability
- Set annual procurement department budgets
Correct answer: Identify consolidation opportunities and sourcing priorities
Spend analysis aggregates and categorizes purchasing data to reveal where money is spent, enabling leverage, consolidation, and strategic sourcing prioritization.
Question 4: The Kraljic Matrix classifies purchased items based on which two dimensions?
- Price volatility and order frequency
- Supply risk and profit impact (Correct answer)
- Supplier capability and lead time
- Purchase volume and quality criticality
Correct answer: Supply risk and profit impact
The Kraljic Matrix plots items on axes of supply risk (complexity of supply market) and profit impact (purchase volume × price, quality impact, business impact) to define sourcing strategies.
Question 5: Which type of e-procurement tool allows buyers to post requirements and receive competitive bids electronically in a reverse auction format?
- Catalog management system
- Electronic data interchange (EDI)
- Reverse auction platform (Correct answer)
- Purchase requisition system
Correct answer: Reverse auction platform
A reverse auction platform enables multiple suppliers to bid competitively online in real time, with the price typically moving downward as suppliers undercut each other.
Question 6: When a buyer enters into a contract with a Master Service Agreement (MSA) supplemented by individual Statements of Work (SOWs), the MSA typically governs:
- Specific deliverables, timelines, and fees for each project
- Overarching terms such as liability, IP ownership, and dispute resolution (Correct answer)
- Pricing escalation clauses for future SOWs
- Performance metrics for individual engagements
Correct answer: Overarching terms such as liability, IP ownership, and dispute resolution
An MSA establishes the general legal framework for the relationship, while individual SOWs define project-specific scope, deliverables, and pricing.
Question 7: A supply manager wants to reduce total acquisition cost without changing the specification. Which approach BEST achieves this?
- Value engineering
- Value analysis (Correct answer)
- Design for manufacturability
- Specification tightening
Correct answer: Value analysis
Value analysis reviews existing products or purchased items to find cost reduction opportunities without altering required function or performance, whereas value engineering occurs during design.
CPSM Supply Management Core 3
Which supplier evaluation method assigns numerical weights to multiple criteria and scores each supplier against those criteria?