CPSM Diagnostic Practice Exam 1 Latest Update
2025-2026 150 Questions and 100% Verified
Correct Answers Guaranteed A+
132. Which of the following reasons for establishing a supplier diversity program is likely
to have the GREATEST benefit to an organization?
(A) Minimizing the threat of economic boycotts
(B) Improving the organization's position on pass-down provisions
(C) Complying with government contract requirements
(D) Increasing competition among sources - CORRECT ANSWER: (D) Increasing
competition among sources
82. Which of the following BEST describes the act of extortion?
(A) Accepting monetary compensation from a supplier in consideration of award of a
contract
(B) Obtaining cash or something else of value through the abuse of one's role in an
organization
(C) Deceit, trickery or breach of confidence perpetrated for profit or to gain some unfair
advantage
(D) Expecting reciprocal business of equal value from the seller's organization -
CORRECT ANSWER: (B) Obtaining cash or something else of value through the abuse
of one's role in an organization
A $0.12 per barrel tax on imported oil is an example of which of the following?
(A) Ad valorem duty
(B) Goods and services tax
(C) Specific duty
,(D) Value-added tax - CORRECT ANSWER: (C) Specific duty
A buyer for a large gourmet specialty company has been tasked with identifying any
situation that could raise prices or create bottlenecks.
The goal is to ensure a reliable, cost-effective flow of ingredients for final blending into
products at the company plant. The buyer has been analyzing supplier fluctuations in
available capacity. Which of the following is MOST likely to cause supply problems for
the company?
(A) A supplier's recently expanded production facility has been underutilized.
(B) Favorable growing conditions have yielded unusually high harvests.
(C) A supplier's second-largest plant is up for sale as part of corporate streamlining.
(D) A buyer can schedule deliveries for the producer's off peak season. - CORRECT
ANSWER: (C) A supplier's second-largest plant is up for sale as part of corporate
streamlining
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 commodity manager is attending a trade show in Europe. During a private
conversation with a supplier, the
supplier silently slides an envelope across the table toward the commodity manager.
Which of the following is the MOST appropriate course of action for the commodity
manager to take?
,(A) Pick up the envelope and look inside, as the supplier did not say what it contains.
(B) Ask the supplier what is in the envelope before picking it up.
(C) Ask the supplier to open and explain the contents of the envelope.
(D) Leave the room and find a colleague to join the conversation. - CORRECT
ANSWER: (D) Leave the room and find a colleague to join the conversation.
A company conducts an e auction for forklifts. Immediately after the e-auction
concludes, the two suppliers with the lowest prices inform the company
they will not be able to honor their pricing. To avoid situations like this in the future,
which of the following is
the BEST course of action for the company to take?
(A) Include a clause within the registration process stating that participants will honor
their prices, or be excluded from the current auction and all subsequent auctions.
(B) Exclude the two suppliers from any future e-auctions that the company holds, as
they did not honor their e-auction pricing.
(C) Rather than using e-auctions, opt for a closed-bid process to avoid the possibility of
companies not honoring their pricing during the e-auctions.
(D) Verify with the suppliers midway through the e-auction to make certain that they will
continue to honor their prices. - CORRECT ANSWER: (A) Include a clause within the
registration process stating that participants will honor their prices, or be excluded from
the current auction and all subsequent auctions.
A company hires a supplier to launch a website for a new product. The implementation
is very successful, and the
supplier would like to publicize its efforts in advertising and on its website, with
testimonials from the buying
company's employees. However, the contract prohibits this. Which of the following is the
LEAST likely to be the
reason for the company's position on this matter?
, (A) Other suppliers may seek endorsement from the company.
(B) Employees might be targeted for sales pitches by the supplier's competitors.
(C) The company has a policy of not endorsing suppliers.
(D) The company plans to launch additional websites on its own. - CORRECT
ANSWER: (D) The company plans to launch additional websites on its own.
A company plans to hire a consulting firm to implement a new employee benefits
website. Which of the following is
MOST appropriate for this contract?
(A) Cost plus pricing
(B) Loss leader pricing
(C) Market based pricing
(D) Time and material pricing - CORRECT ANSWER: (D) Time and material pricing
A company wishes to reduce costs on a product it manufactures. The company is
considering a capital expenditure of $80,000, which would generate an annual net cash
flow of $30,000 beginning in year one. Marketing has determined the product will be
sold for three years after the new equipment is installed. The company expects an
annual discount rate of 8%.
What is the net present value of this opportunity?
(A) -$9,200
(B) -$2,688
(C) $3,600
(D) $10,000 - CORRECT ANSWER: (B) -$2,688
2025-2026 150 Questions and 100% Verified
Correct Answers Guaranteed A+
132. Which of the following reasons for establishing a supplier diversity program is likely
to have the GREATEST benefit to an organization?
(A) Minimizing the threat of economic boycotts
(B) Improving the organization's position on pass-down provisions
(C) Complying with government contract requirements
(D) Increasing competition among sources - CORRECT ANSWER: (D) Increasing
competition among sources
82. Which of the following BEST describes the act of extortion?
(A) Accepting monetary compensation from a supplier in consideration of award of a
contract
(B) Obtaining cash or something else of value through the abuse of one's role in an
organization
(C) Deceit, trickery or breach of confidence perpetrated for profit or to gain some unfair
advantage
(D) Expecting reciprocal business of equal value from the seller's organization -
CORRECT ANSWER: (B) Obtaining cash or something else of value through the abuse
of one's role in an organization
A $0.12 per barrel tax on imported oil is an example of which of the following?
(A) Ad valorem duty
(B) Goods and services tax
(C) Specific duty
,(D) Value-added tax - CORRECT ANSWER: (C) Specific duty
A buyer for a large gourmet specialty company has been tasked with identifying any
situation that could raise prices or create bottlenecks.
The goal is to ensure a reliable, cost-effective flow of ingredients for final blending into
products at the company plant. The buyer has been analyzing supplier fluctuations in
available capacity. Which of the following is MOST likely to cause supply problems for
the company?
(A) A supplier's recently expanded production facility has been underutilized.
(B) Favorable growing conditions have yielded unusually high harvests.
(C) A supplier's second-largest plant is up for sale as part of corporate streamlining.
(D) A buyer can schedule deliveries for the producer's off peak season. - CORRECT
ANSWER: (C) A supplier's second-largest plant is up for sale as part of corporate
streamlining
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 commodity manager is attending a trade show in Europe. During a private
conversation with a supplier, the
supplier silently slides an envelope across the table toward the commodity manager.
Which of the following is the MOST appropriate course of action for the commodity
manager to take?
,(A) Pick up the envelope and look inside, as the supplier did not say what it contains.
(B) Ask the supplier what is in the envelope before picking it up.
(C) Ask the supplier to open and explain the contents of the envelope.
(D) Leave the room and find a colleague to join the conversation. - CORRECT
ANSWER: (D) Leave the room and find a colleague to join the conversation.
A company conducts an e auction for forklifts. Immediately after the e-auction
concludes, the two suppliers with the lowest prices inform the company
they will not be able to honor their pricing. To avoid situations like this in the future,
which of the following is
the BEST course of action for the company to take?
(A) Include a clause within the registration process stating that participants will honor
their prices, or be excluded from the current auction and all subsequent auctions.
(B) Exclude the two suppliers from any future e-auctions that the company holds, as
they did not honor their e-auction pricing.
(C) Rather than using e-auctions, opt for a closed-bid process to avoid the possibility of
companies not honoring their pricing during the e-auctions.
(D) Verify with the suppliers midway through the e-auction to make certain that they will
continue to honor their prices. - CORRECT ANSWER: (A) Include a clause within the
registration process stating that participants will honor their prices, or be excluded from
the current auction and all subsequent auctions.
A company hires a supplier to launch a website for a new product. The implementation
is very successful, and the
supplier would like to publicize its efforts in advertising and on its website, with
testimonials from the buying
company's employees. However, the contract prohibits this. Which of the following is the
LEAST likely to be the
reason for the company's position on this matter?
, (A) Other suppliers may seek endorsement from the company.
(B) Employees might be targeted for sales pitches by the supplier's competitors.
(C) The company has a policy of not endorsing suppliers.
(D) The company plans to launch additional websites on its own. - CORRECT
ANSWER: (D) The company plans to launch additional websites on its own.
A company plans to hire a consulting firm to implement a new employee benefits
website. Which of the following is
MOST appropriate for this contract?
(A) Cost plus pricing
(B) Loss leader pricing
(C) Market based pricing
(D) Time and material pricing - CORRECT ANSWER: (D) Time and material pricing
A company wishes to reduce costs on a product it manufactures. The company is
considering a capital expenditure of $80,000, which would generate an annual net cash
flow of $30,000 beginning in year one. Marketing has determined the product will be
sold for three years after the new equipment is installed. The company expects an
annual discount rate of 8%.
What is the net present value of this opportunity?
(A) -$9,200
(B) -$2,688
(C) $3,600
(D) $10,000 - CORRECT ANSWER: (B) -$2,688
