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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions:
1. 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) Lack of independence in the auditor's recommendations
B) Loss of operational control over manufacturing processes
C) Reduced decision-making authority within management
D) Reputational damage if non-compliance issues are exposed
2. Global sourcing often increases carbon emissions due to the long distances goods must travel. Which of the following strategies can help reduce this environmental impact?
A) Consolidating shipments to reduce the number of trips made
B) Sourcing from multiple distant suppliers to ensure competitive pricing
C) Increasing reliance on air freight for faster delivery
D) Focusing exclusively on sourcing from local markets regardless of cost
3. Which of the following best defines the concept of total landed costs?
A) The lowest logistics cost of a product
B) The difference between the product and logistics related cost
C) The sum of all product and logistics related cost
D) The sum of all logistics cost related to a product
4. Which of the following best defines a cartel, and which party in the supply chain is most impacted by it?
A) A coalition of businesses to increase competition; primarily affects shareholders
B) A formal agreement between competing firms to set prices and limit production; primarily affects consumers
C) A collaboration between manufacturers to innovate; primarily affects suppliers
D) An informal agreement among suppliers to lower costs; primarily affects retailers
5. A company dedicated to sustainable procurement is evaluating its processes to integrate Fair Trade goods. At which stage of the procurement process can Fair Trade requirements be most strategically incorporated?
A) When monitoring supplier compliance during the contract term
B) After contract award, during supplier performance evaluation
C) During pre-procurement planning and market research
D) During tender specification development and supplier evaluation
Solutions:
Question # 1 Answer: D | Question # 2 Answer: A | Question # 3 Answer: C | Question # 4 Answer: B | Question # 5 Answer: D |