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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions:

1. While low-cost country sourcing can provide substantial cost savings for buyers, it also comes with significant risks. Which of the following should be avoided as a potential target for low-cost country sourcing?

A) A country with stable tax and tariff structures
B) A country that is remote geographically but with good transportation routes
C) A country where companies use Just in Time (JIT) method of SCM
D) A country consisting of workers with detailed knowledge of the product

2. The Fairtrade labeling system is built on specific Fair Trade standards. These standards are intended to directly address which TWO of the following aspects?

A) Fair and equitable wages
B) Leadership and management training
C) Safe and fair working conditions
D) Feedback and input from customers
E) Employee pension schemes

3. Ruben is a new Procurement Manager at XYZ Company. He has been charged with buying a new piece of machinery for a factory. Having looked at several options, and considered sustainability, he has opted to buy the more expensive piece of machinery.
In terms of sustainability, why might he have made this choice?

A) In terms of life-cycle costing the more expensive item may be cheaper in the long term
B) The higher priced item will be of better quality
C) The higher priced item is from a more reputable company
D) The more expensive piece of equipment will be more environmentally friendly

4. Which of the following is NOT a reason for supply chain mapping?

A) Identifying potential risks and vulnerabilities
B) Eliminating the need for supplier relationship management
C) Gathering quality data through audits
D) Understanding and gaining insights into suppliers

5. GlobalPharm Ltd, a pharmaceutical company, has engaged a third-party auditor to assess its compliance with regulatory standards. During the audit, the company identifies potential risks. What is the most significant challenge GlobalPharm Ltd might face when working with a third-party auditor?

A) Reduced decision-making authority within management
B) Lack of independence in the auditor's recommendations
C) Loss of operational control over manufacturing processes
D) Reputational damage if non-compliance issues are exposed

Solutions: