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CIPS L4M4 Exam Syllabus Topics:
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CIPS Ethical and Responsible Sourcing Sample Questions (Q15-Q20):
NEW QUESTION # 15
Which models would be appropriate for analysis of the supply market?
* Porter's Five Forces
* Porter's Value Chain
* STEEPLED
* Ishikawa Fishbone
Answer: D
Explanation:
Porter's Five Forces and the STEEPLED model are valuable tools for analyzing supply markets. These models help identify external pressures and market dynamics, supporting responsible sourcing by enabling buyers to understand and respond to market influences effectively.
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NEW QUESTION # 16
A buyer is only interested in working with suppliers who have strong Environmental and Social Governance practices. It is therefore using ethical criteria as supplier selection stage to determine which suppliers to work with. Which of the following statements is true?
Answer: C
Explanation:
A supplier who follows the CIPS Code of Conduct is more likely to meet the buyer's needs is the correct answer.
The other options are wrong:
1) Compliance with Codes of Conduct from professional bodies is optional. E.g. CIPS - no organi-sation is forced to comply with CIPS.
2) Unethical behaviour is not impossible to detect, it may be difficult but with correct due diligence and things like audits it's completely possible
3) ISO 14001 is quality management so is irelevent.
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NEW QUESTION # 17
When might a company send a Request for Information (RFI) to a supplier instead of a Request for Quotation (RFQ)? Select TWO that apply:
Answer: A,B,C,E
Explanation:
A Request for Information (RFI) is utilized during the early stages of the procurement process to gather general information about potential suppliers' capabilities, products, or services. It helps in understanding the market and narrowing down supplier options before moving to more detailed requests like RFQs or RFPs.
* Option B:Obtaining indicative prices helps in budgeting and understanding market rates.
* Option C:Gathering details about products or services allows the buyer to assess the supplier's offerings and suitability.
Options A, D, and E are more appropriate for later stages in the procurement process, such as during RFQs or contract negotiations.
Reference:
CIPS Level 4 Diploma in Procurement and Supply, L4M4 Study Guide, Section 2.1: Sourcing and Contracting Process
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NEW QUESTION # 18
Which of the following financial ratios would indicate a supplier's potential exposure risk to a steep rise in inflation?
Answer: A
Explanation:
The correct answer is 'gearing ratio'.
Gearing measures how much of a company's funding is based on long-term debt or loans- this would be affected by a steep rise in inflation. If a company has a mortgage on their offices or facto-ry and they need to remortgage and inflation has gone up a lot- they'll be paying a lot more on their mortgage. This will severely effect the gearing ratio as they'll have more outgoings than incoming.
Gross profit margin COULD be affected by inflation, for example if you've got hyper-inflation and the country goes into recession and people stop buying your product. However, this answer isn't al-ways right and depends on many factors- the industry, the product, the company etc, so for the purpose of CIPS should be discounted.
There are many industries which are immune to inflation.
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NEW QUESTION # 19
Which of the following should be assessed in supplier proposals to check compliance with environmental, social, and governance (ESG) standards? Select THREE that apply.
Answer: D,E,F
Explanation:
Employee working conditions, a code of ethics, and a carbon emissions policy are all indicative of a supplier's commitment to ESG standards. Assessing these factors aligns with responsible sourcing practices, which prioritize sustainability and ethical considerations.
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NEW QUESTION # 20
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