CPSM Diagnostic Online Practice Exam 2025 |
Updated Questions and Correct Answers |
Graded A+ | Latest Version | Verified Answers
A supply manager has been asked by the facilities manager to prepare a purchase
order for $3,000 to buy a new air compressor for the company headquarters.
Company policy requires senior management authorization for purchases greater
than $2,500, yet the
facilities manager has not secured this authorization. Which of the following is the
BEST course of action for the supply manager to take?
(A) Place the order without the budget authorization.
(B) Contact the finance office for the budget authorization.
(C) Inform the facilities manager to obtain the authorization.
(D) Negotiate a price that falls under the capital budget threshold. ---------
CORRECT ANSWER-----------------(C) Inform the facilities manager to obtain the
authorization.
A supply manager is evaluating a departmental budget and notices that there is
no comparison between
established goals and actual results. This indicates an omission in which of the
following?
(A) Controlling
(B) Executing
,(C) Organizing
(D) Planning ---------CORRECT ANSWER-----------------(A) Controlling
After the evaluation of cost data and the determination of the budget figures,
what is the NEXT step in the budgeting process?
(A) Identifying financial resources allocated to each department
(B) Negotiating with suppliers
(C) Defining processes for comparing goals to actual results
(D) Analyzing contract pricing ---------CORRECT ANSWER-----------------(C) Defining
processes for comparing goals to actual results
Smith is a supply manager for XYZ Inc. Smith issues a request for proposal and
awards the contract to a new overseas supplier. As Smith's team concludes
negotiations with the selected supplier, XYZ's chief financial officer inquires about
the project's budget. Smith had assumed that supply management had the usual
authorization to spend under the current direct materials budget and
therefore did not prepare a budget. Given this situation, which of the following
should Smith do?
(A) Include a member of the CFO's staff in the negotiations and ask him or her to
report budgetary issues back to the CFO.
(B) Place the orders, as Smith has pre-authorization to purchase under the
existing budget process.
(C) Create a specialized budget to track cost performance of the new program.
,(D) Suspend the negotiations and purchase the item from current suppliers. --------
-CORRECT ANSWER-----------------(C) Create a specialized budget to track cost
performance of the new program.
A firm in the automotive industry is primarily decentralized, with a small
corporate purchasing staff. The staff coordinates steel purchases across all of its
buying organizations by inviting participation from each buying unit. This
coordinated approach is BEST described as
(A) a commodity council
(B) lead divisional buying
(C) pool buying
(D) a regional buying group ---------CORRECT ANSWER-----------------(A) a
commodity council
A buying organization has the greatest opportunity to experience cost efficiencies
when it
(A) understands the supplier's manufacturing processes
(B) shares the business forecasting model
(C) secures confidentiality agreements
(D) promises the supplier shared responsibility in managing inventory ---------
CORRECT ANSWER-----------------(A) understands the supplier's manufacturing
processes.
, A supply manager has been asked to participate in a cost management program
to help her organization generate
more working capital. Which of the following is the BEST way for the supply
manager to contribute to that goal?
(A) Establishing a standard cost system
(B) Employing a cost modeling tool
(C) Focusing on a standardization program
(D) Implementing a contribution to margin analysis ---------CORRECT ANSWER------
-----------(C) Focusing on a standardization program
ABC Corporation has a centralized supply management organization. The CEO
directs that the organization must lower costs and expenses, and that
performance appraisals will be based on results achieved. Given this scenario,
which of the following should be given the LEAST attention?
(A) E-procurement
(B) Spend analysis
(C) Supplier integration
(D) Strategic sourcing ---------CORRECT ANSWER-----------------(C) Supplier
integration
XYZ Company is experiencing eroding margins for one of its key products. The
company decides to commission a
Updated Questions and Correct Answers |
Graded A+ | Latest Version | Verified Answers
A supply manager has been asked by the facilities manager to prepare a purchase
order for $3,000 to buy a new air compressor for the company headquarters.
Company policy requires senior management authorization for purchases greater
than $2,500, yet the
facilities manager has not secured this authorization. Which of the following is the
BEST course of action for the supply manager to take?
(A) Place the order without the budget authorization.
(B) Contact the finance office for the budget authorization.
(C) Inform the facilities manager to obtain the authorization.
(D) Negotiate a price that falls under the capital budget threshold. ---------
CORRECT ANSWER-----------------(C) Inform the facilities manager to obtain the
authorization.
A supply manager is evaluating a departmental budget and notices that there is
no comparison between
established goals and actual results. This indicates an omission in which of the
following?
(A) Controlling
(B) Executing
,(C) Organizing
(D) Planning ---------CORRECT ANSWER-----------------(A) Controlling
After the evaluation of cost data and the determination of the budget figures,
what is the NEXT step in the budgeting process?
(A) Identifying financial resources allocated to each department
(B) Negotiating with suppliers
(C) Defining processes for comparing goals to actual results
(D) Analyzing contract pricing ---------CORRECT ANSWER-----------------(C) Defining
processes for comparing goals to actual results
Smith is a supply manager for XYZ Inc. Smith issues a request for proposal and
awards the contract to a new overseas supplier. As Smith's team concludes
negotiations with the selected supplier, XYZ's chief financial officer inquires about
the project's budget. Smith had assumed that supply management had the usual
authorization to spend under the current direct materials budget and
therefore did not prepare a budget. Given this situation, which of the following
should Smith do?
(A) Include a member of the CFO's staff in the negotiations and ask him or her to
report budgetary issues back to the CFO.
(B) Place the orders, as Smith has pre-authorization to purchase under the
existing budget process.
(C) Create a specialized budget to track cost performance of the new program.
,(D) Suspend the negotiations and purchase the item from current suppliers. --------
-CORRECT ANSWER-----------------(C) Create a specialized budget to track cost
performance of the new program.
A firm in the automotive industry is primarily decentralized, with a small
corporate purchasing staff. The staff coordinates steel purchases across all of its
buying organizations by inviting participation from each buying unit. This
coordinated approach is BEST described as
(A) a commodity council
(B) lead divisional buying
(C) pool buying
(D) a regional buying group ---------CORRECT ANSWER-----------------(A) a
commodity council
A buying organization has the greatest opportunity to experience cost efficiencies
when it
(A) understands the supplier's manufacturing processes
(B) shares the business forecasting model
(C) secures confidentiality agreements
(D) promises the supplier shared responsibility in managing inventory ---------
CORRECT ANSWER-----------------(A) understands the supplier's manufacturing
processes.
, A supply manager has been asked to participate in a cost management program
to help her organization generate
more working capital. Which of the following is the BEST way for the supply
manager to contribute to that goal?
(A) Establishing a standard cost system
(B) Employing a cost modeling tool
(C) Focusing on a standardization program
(D) Implementing a contribution to margin analysis ---------CORRECT ANSWER------
-----------(C) Focusing on a standardization program
ABC Corporation has a centralized supply management organization. The CEO
directs that the organization must lower costs and expenses, and that
performance appraisals will be based on results achieved. Given this scenario,
which of the following should be given the LEAST attention?
(A) E-procurement
(B) Spend analysis
(C) Supplier integration
(D) Strategic sourcing ---------CORRECT ANSWER-----------------(C) Supplier
integration
XYZ Company is experiencing eroding margins for one of its key products. The
company decides to commission a
