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CPSM® Update

3 Questions, 3 Answers

March/April 2010, eSide Supply Management Vol. 3, No. 2

New in 2010, eSide will offer three sample questions — and answers — from the CPSM® Diagnostic Practice Exam to help you prepare to pursue your CPSM® certification. First, answer all three questions; then, scroll down to the "3 Answers" section to find out how you fared.

3 Questions

Question #1: Which of the following should have the MOST influence in determining end product specifications, so as to minimize the potential for returns?

  1. Marketing
  2. Supply management
  3. Engineering
  4. Manufacturing

Question #2: A supply manager is tasked with acquiring training services for a group of engineers who will be part of specialized sourcing teams charged with driving an aggressive cost reduction program. Which of the following methods would be MOST appropriate for the supply manager to employ in identifying appropriate training solutions?

CPSM<sup>®</sup> Diagnostic Practice Exam
  1. SWOT analysis
  2. Industry benchmarks
  3. Request for Information
  4. Porter's Five Forces

Question #3: A company is partnering for the first time with another firm within its conglomerate. Though both firms are part of the same organization, they have traditionally competed for shares of an overlapping market. Which of the following is LEAST likely to foster cooperation between the two organizations?

  1. Understanding the cultural differences and similarities between the companies
  2. Reviewing how each firm handles critical areas, and then deciding which approach is correct
  3. Finding common ground from which both firms can build
  4. Allowing each company a chance to explain their vision and goals
3 Answers

Question #1: Option A is correct because marketing must analyze customers' requirements and ensure products manufactured by the organization meet those needs. Supply management (Option B) typically reviews specifications for clarity and effect on sourcing such as available competition among suppliers. Technical descriptions, tolerances, and similar criteria are usually the responsibility of engineering (Option C). Manufacturing (Option D) must check to be sure materials or components can be used smoothly in its processes (example: consistency needed for automated assembly).

References: CPSM Study Guide, 1st Edition, Book 1 — Foundation of Supply Management, pages 1-2.
ISM Professional Series — Book 1 — Foundation of Supply Management, pages 114-115.

Question #2: Option C, a request for information (RFI), is correct. An RFI, as defined, is a solicitation method of obtaining general information about services, products, and suppliers. This will allow the supply manager to review suggestions from potential suppliers and focus on the best fit for the organization. Option A, a SWOT analysis, is a risk assessment. Option B, industry benchmarks, are a standard or point of reference used in judging performance. Option D, Porter's Five Forces, is used to describe competition.

Reference: CPSM Study Guide, 1st Edition, Book 2 — Effective Supply Management Performance, pages 6-7.

Question #3: Option B is correct because deciding which partner's approach is right (thus implying the other's is wrong) may not be as productive as finding common ground or blending best practices from both. Options A, C, and D allow each of the partners to explain their organization's needs, understand the other's, and learn from counterparts.

References: CPSM Study Guide, 1st Edition, Book 3 — Leadership in Supply Management, pages 1-4.
ISM Professional Series — Book 3 — Leadership in Supply Management, pages 65-71.

For more information on ISM's professional credentials, visit the Institute's Web site.

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