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

1. When a major garments factory faces adverse publicity due to alleged child labor, which of the following recognized techniques would be most effective in identifying the root cause of the issue?

A) Whole life costs
B) Six sigma
C) Value engineering
D) Supply chain mapping

2. A Letter of Intent (LOI), also known as a Memorandum of Understanding (MOU), constitutes legally binding contractual terms in a commercial contract.
Is this statement true?

A) Yes. Because a letter of intent is used for every contract as a contractual term
B) No. Because a letter of intent is used for contract management part only
C) Yes. Because a letter of intent is a legally binding contractual term and a condition of contract
D) No, because a letter of intent is document used during negotiation but not a term of contract always

3. Westecs Inc., a leading consumer products manufacturer, has made significant investments in sustainable practices across its supply chains and in promotional advertising. Which of the following is the most likely benefit of this investment?

A) Improved brand image
B) Unsatisfied shareholders
C) Increased number of competitors
D) Reduced indirect costs

4. ABC Group, the country's largest textile company, is considering partnering with a Fair Trade-certified supplier to support sustainability and ethical practices. However, they are concerned about potential challenges in working with a Fair Trade organization. Which TWO of the following challenges might ABC Group face in this partnership?

A) There are no real challenges, as all Fair Trade products are guaranteed to be competitive and cost-efficient
B) The product prices from Fair Trade suppliers are often significantly lower than conventional suppliers, making it hard to remain competitive
C) The Fair Trade certification process may require complex audits, and if there is a longer period between audits, activities could change and will no longer be compliant
D) Fair Trade standards may require investments in audits supported by self-assessment reports and office reviews adding costs to the business
E) Improved stakeholder perception of the brand, which can lead to reputational benefits

5. Which of the following form the 'Triple Bottom Line'? Select THREE

A) product
B) planet
C) people
D) placement
E) profit

Solutions: