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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q33-Q38):
NEW QUESTION # 33
Labour standards facilitate international trade and there are international regulations to secure this. Is this statement TRUE?
- A. No - no countries have established labour standards
- B. Yes - there is a minimum labour standard governing pay and conditions
- C. Yes - labour standards are regulated by the UN and other multi-national bodies
- D. No - labour standards vary from country to country
Answer: D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The correct answer is that labour standards vary from country to country. According to the L5M5 study guide (p.85), while international conventions exist (e.g., ILO conventions), there is no single binding international law regulating labour standards across all nations. Instead, each country enforces its own rules regarding wages, hours, and working conditions. Some countries have strict protections, while others may have weak or poorly enforced standards. Therefore, procurement professionals must apply due diligence and supplier audits when sourcing internationally, as ethical risks arise in jurisdictions with lower labour protections.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.85
NEW QUESTION # 34
A large retail chain, HyperMart, sources products from multiple suppliers, each specializing in different categories such as electronics, clothing, and groceries. To maintain a diverse selection, HyperMart has contracts with multiple suppliers for each product category. At the same time, these suppliers serve various large retailers and are not solely dependent on HyperMart for their sales.
In this scenario, how does the mutual independence between HyperMart and its suppliers illustrate the dynamics of the power dominance model?
- A. Suppliers hold power over HyperMart because they provide unique products that are difficult to substitute
- B. HyperMart has significant power over suppliers due to its large purchasing volume
- C. Both HyperMart and its suppliers operate independently without significant power over each other
- D. The dependence of HyperMart on suppliers for critical products increases supplier power
Answer: C
Explanation:
In this scenario, both HyperMart and its suppliers operate independently. HyperMart has multiple suppliers to choose from, limiting any single supplier's influence. Likewise, suppliers serve multiple large retailers, including HyperMart, preventing dependency on a single customer. This mutual independence creates a balanced power dynamic, where neither party holds significant control over the other.
Thus, the correct answer is Option C.
Reference:
LO-1.4; Page 128-129; Responsible use of power relationships
NEW QUESTION # 35
When creating a Sustainable Procurement Policy, which of the following steps should be conducted first?
- A. Draft the policy
- B. Identify who will take lead responsibility
- C. Consult with stakeholders
- D. Gather information
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (p.33) outlines nine steps to creating a Sustainable Procurement Policy. The very first step is to identify who will take lead responsibility (C). This ensures accountability from the outset. Once a leader is appointed, the next steps include gathering information, drafting the policy, consulting with stakeholders, obtaining approval, and monitoring. Without clear leadership, policies risk being ineffective. Procurement professionals must ensure accountability and leadership to drive sustainability objectives effectively.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.33
NEW QUESTION # 36
Opportunities for disadvantaged producers and the payment of a local living wage are principles of which organisation?
- A. The International Labour Organisation (ILO)
- B. The World Fair Trade Organisation (WFTO)
- C. The Organisation for Economic Co-operation and Development (OECD)
- D. The European Union (EU)
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The World Fair Trade Organisation (WFTO) has a set of 10 principles designed to ensure fair and sustainable trade. These include providing opportunities for disadvantaged producers, ensuring the payment of a local living wage, promoting gender equity, and rejecting child labour and forced labour. The L5M5 study guide (p.295) confirms that the WFTO focuses on disadvantaged producers in developing countries, differentiating it from organisations like the ILO, which sets broader labour standards, and the OECD/EU, which focus on economic or political cooperation. Procurement professionals may encounter WFTO-certified suppliers, especially in commodities like coffee, cocoa, and handicrafts.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.295
NEW QUESTION # 37
NIMBUS TeK, a leading call center employing cost-effective English-speaking workers in countries like India, Pakistan, and the Philippines, has gained a competitive advantage through global sourcing. Which of the following are effective global sourcing practices that the call center has implemented? Select any TWO.
- A. Key Performance Indicator
- B. Service Level Agreement
- C. Managing relationship with supplier before selection
- D. Detailed research of the market and potential suppliers
Answer: B,D
Explanation:
Choice B- Option B is the correct answer as it is a part of RESEARCH under good practices. Choice D- Giving suppliers a clear understanding of the business expectations is a good practice in global sourcing. Therefore is also an answer. Incorrect answer: Choice A- Supplier relationship management is essential but once the supplier has been selected. Choice C- Key Performance Indicator is not a part of good practices in global sourcing. Reference: LO-1.2; Page 70; Competitive advantage through global sourcing
NEW QUESTION # 38
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