CPSM
CPSM Diagnostic Practice Exam 1 Study
Guide Questions and Answers 2025
A supply manager issues a request to proposal for engineering services. In order to
provide clarification on the specification on the specifications, the company holds
a question-and-answer session for interested suppliers. Shortly after the question-
and-answer session is held and before any proposals are actually received, the
firm's engineering department revises the specifications. Given this situation,
which of the following should the supply manager do FIRST?
(A) Call and email the suppliers of the change, tell them when the new
specifications will be available, and ask for immediate notification if additional
time will be required.
(B) Write a letter to each supplier advising of the change, tell each supplier when
the new specifications will be available, and ask for immediate notification if
additional time will be required.
(C) Hold an interim pre-bid meeting withal suppliers to discuss and clarify the revi
-Correct Answer ✔(A) Call and email the suppliers of the change, tell them when
the new specifications will be available, and ask for immediate notification if
additional time will be required.
Which of the following should have the MOST influence in determining end
product specifications, so as to minimize the potential for returns?
(A) Marketing
(B) Supply management
(C) Engineering
(D) Manufacturing -Correct Answer ✔(A) Marketing
When developing specifications, a buyer may consider information from which of
the following?
I. Suppliers
CPSM
,CPSM
II. Industry Standards
III. Professional Organizations
IV. Competitors
(A) I and IV only
(B) II and III only
(C) I, II and III only
(D) I, II, III and IV -Correct Answer ✔(D) I, II, III and IV
A supply manager completes a category profile and identifies services provided
through multiple suppliers. A market and industry analysis shows that the service
provides are growing their businesses by acquiring competitors, thus enabling them
to provide a greater range of services. Which of the following techniques will
BEST enable the supply manager to leverage market competition?
(A) Lotting strategy
(B) Market-basket model
(C) Market segmentation
(D) Sole sourcing -Correct Answer ✔(A) Lotting strategy
A supply manager implements a system whereby the potential supplier names are
hidden until final contract awards are made. This example is BEST described as
ensuring
(A) confidential information is protected
(B) diversity initiatives are met
(C) total costs are minimized
(D) collusion will not occur -Correct Answer ✔(A) confidential information is
protected
A supply manager for a privately held manufacturing company is preparing an
RFP for raw materials. None of
the RFP recipients is an incumbent, and the award resulting from the RFP is
expected to be of significant dollar value. The supply manager is concerned that
the lack of publicly available financial information could impact willingness of the
CPSM
,CPSM
prospective suppliers to submit proposals. Which of the following will BEST
address the concerns of the prospective bidders?
(A) Escrow account
(B) Letter of credit
(C) Payment bond
(D) Surety bond -Correct Answer ✔(B) Letter of credit
Which of the following is the LEAST critical element in a best alternative to a
negotiated agreement (BATNA)?
(A) Alternate products
(B) In-house capabilities
(C) Source options
(D) Supplier capabilities -Correct Answer ✔(D) Supplier capabilities
A supply manager is negotiating with a critical supplier. The parties have relatively
equal bargaining power. Which of the following would MOST likely occur in
"win-win" negotiation between these parties?
(A) The supply manager and supplier conclude the negotiation by splitting the
difference between their respective positions.
(B) The supply manager and supplier each find concessions with equal
weight/value to provide a balanced outcome.
(C) The supply manager and supplier decide to share confidential information.
(D) The supply manager and supplier establish an appropriate settlement range for
the continuation of
negotiations. -Correct Answer ✔(B) The supply manager and supplier each find
concessions with equal weight/value to provide a balanced outcome.
An in-depth analysis of a supplier's proposal is useful because it is important to
understand the
(A) SOW throughout the evaluation process
CPSM
, CPSM
(B) SOW throughout the proposal development process
(C) supplier's proposal throughout the negotiation process
(D) supplier's firm-fixed price -Correct Answer ✔(C) supplier's proposal
throughout the negotiation process
Which of the following is LEAST appropriate as an objective for negotiations?
(A) Meeting the minimum essential needs of the organization
(B) Maintaining control over contract performance
(C) Determining the negotiation site
(D) Ensuring the correct ratio of contract administrators to workers -Correct
Answer ✔(D) Ensuring the correct ratio of contract administrators to workers
Which of the following is likely to be the BEST use of social media sites such as
LinkedIn during the preparation for negotiations with a potential supplier?
(A) Selecting the ideal negotiation sire
(B) Determining objectives for the negotiation
(C) Collecting information, reports and comments on the supplier
(D) Defining the roles and responsibilities of the negotiating team -Correct Answer
✔(C) Collecting information, reports and comments on the supplier.
A supply manager for XYZ Corp. is planning for negotiations with Supplier A, a
provider of software critical for use on XYZ's production line. XYZ likes the
software, but was recently alerted by Supplier A that they are dropping support for
the version that XYZ uses. The supply manager learns that an upgrade is cost
prohibitive for XYZ. Prior to negotiations, the supply manager asks the IT
department to detail its requirements for support of the software, and to assign an
IT employee to attend the negotiations. The day before the negotiation, the IT
employee calls the supply manager and stares that he
is unable to attend due to a scheduling conflict. He further states that he is
confident the supply manager can represent the IT department's needs in the
negotiations.
Given this scenario, which of the following should the supply manager do?
CPSM
CPSM Diagnostic Practice Exam 1 Study
Guide Questions and Answers 2025
A supply manager issues a request to proposal for engineering services. In order to
provide clarification on the specification on the specifications, the company holds
a question-and-answer session for interested suppliers. Shortly after the question-
and-answer session is held and before any proposals are actually received, the
firm's engineering department revises the specifications. Given this situation,
which of the following should the supply manager do FIRST?
(A) Call and email the suppliers of the change, tell them when the new
specifications will be available, and ask for immediate notification if additional
time will be required.
(B) Write a letter to each supplier advising of the change, tell each supplier when
the new specifications will be available, and ask for immediate notification if
additional time will be required.
(C) Hold an interim pre-bid meeting withal suppliers to discuss and clarify the revi
-Correct Answer ✔(A) Call and email the suppliers of the change, tell them when
the new specifications will be available, and ask for immediate notification if
additional time will be required.
Which of the following should have the MOST influence in determining end
product specifications, so as to minimize the potential for returns?
(A) Marketing
(B) Supply management
(C) Engineering
(D) Manufacturing -Correct Answer ✔(A) Marketing
When developing specifications, a buyer may consider information from which of
the following?
I. Suppliers
CPSM
,CPSM
II. Industry Standards
III. Professional Organizations
IV. Competitors
(A) I and IV only
(B) II and III only
(C) I, II and III only
(D) I, II, III and IV -Correct Answer ✔(D) I, II, III and IV
A supply manager completes a category profile and identifies services provided
through multiple suppliers. A market and industry analysis shows that the service
provides are growing their businesses by acquiring competitors, thus enabling them
to provide a greater range of services. Which of the following techniques will
BEST enable the supply manager to leverage market competition?
(A) Lotting strategy
(B) Market-basket model
(C) Market segmentation
(D) Sole sourcing -Correct Answer ✔(A) Lotting strategy
A supply manager implements a system whereby the potential supplier names are
hidden until final contract awards are made. This example is BEST described as
ensuring
(A) confidential information is protected
(B) diversity initiatives are met
(C) total costs are minimized
(D) collusion will not occur -Correct Answer ✔(A) confidential information is
protected
A supply manager for a privately held manufacturing company is preparing an
RFP for raw materials. None of
the RFP recipients is an incumbent, and the award resulting from the RFP is
expected to be of significant dollar value. The supply manager is concerned that
the lack of publicly available financial information could impact willingness of the
CPSM
,CPSM
prospective suppliers to submit proposals. Which of the following will BEST
address the concerns of the prospective bidders?
(A) Escrow account
(B) Letter of credit
(C) Payment bond
(D) Surety bond -Correct Answer ✔(B) Letter of credit
Which of the following is the LEAST critical element in a best alternative to a
negotiated agreement (BATNA)?
(A) Alternate products
(B) In-house capabilities
(C) Source options
(D) Supplier capabilities -Correct Answer ✔(D) Supplier capabilities
A supply manager is negotiating with a critical supplier. The parties have relatively
equal bargaining power. Which of the following would MOST likely occur in
"win-win" negotiation between these parties?
(A) The supply manager and supplier conclude the negotiation by splitting the
difference between their respective positions.
(B) The supply manager and supplier each find concessions with equal
weight/value to provide a balanced outcome.
(C) The supply manager and supplier decide to share confidential information.
(D) The supply manager and supplier establish an appropriate settlement range for
the continuation of
negotiations. -Correct Answer ✔(B) The supply manager and supplier each find
concessions with equal weight/value to provide a balanced outcome.
An in-depth analysis of a supplier's proposal is useful because it is important to
understand the
(A) SOW throughout the evaluation process
CPSM
, CPSM
(B) SOW throughout the proposal development process
(C) supplier's proposal throughout the negotiation process
(D) supplier's firm-fixed price -Correct Answer ✔(C) supplier's proposal
throughout the negotiation process
Which of the following is LEAST appropriate as an objective for negotiations?
(A) Meeting the minimum essential needs of the organization
(B) Maintaining control over contract performance
(C) Determining the negotiation site
(D) Ensuring the correct ratio of contract administrators to workers -Correct
Answer ✔(D) Ensuring the correct ratio of contract administrators to workers
Which of the following is likely to be the BEST use of social media sites such as
LinkedIn during the preparation for negotiations with a potential supplier?
(A) Selecting the ideal negotiation sire
(B) Determining objectives for the negotiation
(C) Collecting information, reports and comments on the supplier
(D) Defining the roles and responsibilities of the negotiating team -Correct Answer
✔(C) Collecting information, reports and comments on the supplier.
A supply manager for XYZ Corp. is planning for negotiations with Supplier A, a
provider of software critical for use on XYZ's production line. XYZ likes the
software, but was recently alerted by Supplier A that they are dropping support for
the version that XYZ uses. The supply manager learns that an upgrade is cost
prohibitive for XYZ. Prior to negotiations, the supply manager asks the IT
department to detail its requirements for support of the software, and to assign an
IT employee to attend the negotiations. The day before the negotiation, the IT
employee calls the supply manager and stares that he
is unable to attend due to a scheduling conflict. He further states that he is
confident the supply manager can represent the IT department's needs in the
negotiations.
Given this scenario, which of the following should the supply manager do?
CPSM
