CPSM Supply Management Core 5

Question 1

A supply manager discovers that a key supplier is financially distressed. The MOST proactive risk mitigation strategy is to:

Accepted Answer

Immediately dual-source critical components and develop a contingency supplier

Answer

Dual-sourcing and qualifying a contingency supplier before a failure occurs ensures supply continuity, whereas reactive measures taken after a collapse often result in costly shortages.

Question 2

Which of the following BEST describes the concept of 'total cost of ownership' (TCO)?

Accepted Answer

All costs associated with acquiring, using, and disposing of a product over its life

Answer

TCO includes acquisition price, ordering costs, receiving and inspection, usage costs, maintenance, downtime, and disposal costs — all costs across the full ownership lifecycle.

Question 3

An organization uses a cross-functional sourcing team that includes engineering, finance, quality, and supply management. This structure PRIMARILY improves:

Accepted Answer

Alignment of supplier selection with organizational requirements across functions

Answer

Cross-functional sourcing teams ensure that supplier selection and contract requirements reflect the needs and constraints of all stakeholder functions, reducing downstream conflicts.

Question 4

When evaluating a potential international supplier, which factor is UNIQUE to global sourcing compared to domestic sourcing?

Accepted Answer

Currency exchange rate risk and import duty analysis

Answer

Currency exchange rate fluctuations and import duties (tariffs, customs fees, and trade compliance requirements) are unique complications that arise specifically in global sourcing decisions.

Question 5

A supply manager is drafting a contract clause to protect the organization if a supplier's costs drop significantly due to material price decreases. The MOST appropriate clause is:

Accepted Answer

Economic price adjustment clause

Answer

An economic price adjustment (EPA) clause ties contract pricing to a published index, allowing prices to move up or down in alignment with actual market conditions for materials or labor.

(CPSM) Certified Professional in Supply Management Practice Test

(CPSM) Certified Professional in Supply Management Practice Test

CPSM Supply Management Core 5