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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q66-Q71):

NEW QUESTION # 66
EcoSmart Solutions, a company specializing in sustainable construction materials, intends to make a sustainability claim for their product. They are aware of the ISEAL Alliance's guidelines for valid sustainability claims. Which of the following would be considered a valid sustainability claim according to ISEAL Alliance standards?

A. The product reduces carbon emissions, but the claim is not supported by any third-party audits or verifications
B. The product is made using 100% recycled materials, with claims verified by third-party certification from a recognized sustainability standard
C. The product is marketed as "eco-friendly" based on internal environmental policies without any external certification
D. The product claims to improve sustainability, but the claims are solely based on anecdotal evidence and not on any recognized environmental criteria or certification

Answer: B

Explanation:
Choice A- This is the correct answer. According to ISEAL Alliance guidelines, a valid sustainability claim must be supported by third-party certification from a credible and recognized sustainability standard, ensuring the claim is verifiable and transparent.
Incorrect answer:
Choice B- This is not a valid claim under ISEAL guidelines because third-party verification is necessary to substantiate any claims related to carbon emissions.
Choice C- This is not a valid claim under ISEAL guidelines. Claims need to be independently verified, and internal policies alone do not provide credibility to the sustainability claim.
Choice D- This is not a valid claim according to ISEAL standards. Claims should be based on verifiable evidence and supported by recognized sustainability standards.
Reference:
LO-3.2; Page 291; Role of industry standards and frameworks used by organizations in securing ESG considerations and ethical standards and Charter of Fair Trade and implications for procurement and supply

NEW QUESTION # 67
GlobalTechManufacturing (GTM), a multinational company, operates a complex supply chain spanning multiple countries and stakeholders. Recognizing this complexity as a major risk, the Chief Supply Chain Officer (CSCO) has launched a supply chain mapping project. The objective is to analyze GTM's supply chain structure and develop risk mitigation strategies. The initial phase of this project will primarily focus on understanding which of the following aspects within GTM's supply chains?
1. Branding
2. Tiers
3. Complexity
4. Innovation

A. 1 and 2 only
B. 3 and 4 only
C. 1 and 4 only
D. 2 and 3 only

Answer: D

Explanation:
Option 2 - Supply chain mapping involves a detailed analysis of supplier layers, including Tier 1, Tier 2, and Tier 3 suppliers. Identifying these tiers allows GTM to trace the flow of materials, information, and services throughout the supply chain. This visibility is crucial for assessing supplier relationships, dependencies, and risks at each level, helping to mitigate potential disruptions. Therefore, this is a correct answer.
Option 3 - GTM's supply chain is extensive and intricate, spanning multiple countries with interconnected layers. Understanding this complexity helps identify risks, inefficiencies, and bottlenecks. Mapping the network enables GTM to manage interdependencies and enhance supply chain resilience, making this another correct answer.
Incorrect answer:
Option 1- While branding is important for market presence and customer perception, it is not directly related to supply chain mapping or risk mitigation in this context.
Option 4- Innovation is valuable for driving competitive advantage and improving processes, but the focus here is on understanding the current structure of the supply chain to address risks, not on developing new innovations.
By focusing on tiers and complexity, GTM can lay a strong foundation for managing its global supply chain risks effectively thus the answer is Choice A.
Reference:
LO-2.1; Page 145-148; Mapping supply chains to achieve supply chain transparency

NEW QUESTION # 68
What is the primary purpose of a supplier code of conduct?

A. To outline the payment terms and delivery schedules for suppliers
B. To ensure suppliers take full responsibility for product quality
C. To define the penalties for non-compliance in supplier contracts
D. To establish the expectations and standards for supplier behavior and practices

Answer: D

Explanation:
Choice B- A supplier code of conduct sets clear guidelines on ethical, social, environmental, and legal responsibilities that suppliers are expected to follow. Therefore B is the correct answer.
Incorrect answer:
Choice A- This is not the primary purpose of a supplier code of conduct. While the code may mention consequences for non-compliance, its primary focus is on establishing ethical and operational standards rather than detailing penalties.
Choice C- Payment terms and delivery schedules are typically included in contractual agreements, not in a supplier code of conduct. The code focuses more on ethical and sustainability standards rather than logistical or financial details.
Choice D- While product quality may be a part of a supplier's responsibilities, it is usually addressed in specific quality agreements or technical specifications rather than the supplier code of conduct. The code primarily deals with broader principles such as ethical labor practices, environmental impact, and compliance with laws.
Reference:
LO-2.2; Page 184; Monitoring Contract Performance

NEW QUESTION # 69
Fresh Delight, a natural fruit juice company, sources fruit from Citrus Co. under a contract with a "time of the essence" and "retention of title" clause. Citrus Co. delivers fruit every Monday, but Fresh Delight has failed to pay for the last two deliveries. Claiming ownership under the retention of title clause, Citrus Co. attempts to reclaim the most recent delivery. Does Citrus Co. have a valid legal claim to retrieve the goods despite having delivered them?

A. No - if Fresh Delight signed for the delivery, Citrus Co. has no right to reclaim it
B. Yes - the product still belongs to Citrus Co
C. No - if the delivery was made on time, it belongs to Fresh Delight
D. Yes - the product can be reclaimed under any circumstances

Answer: B

Explanation:
Choice A- The retention of title clause in the contract means Citrus Co. retains ownership of the goods until Fresh Delight has fully paid for them. Even though the goods were delivered, the failure to pay gives Citrus Co. the right to reclaim them. Ownership (title) does not pass to Fresh Delight until payment is made. Correct answer.
Incorrect answer:
Choice B- While the retention of title clause allows Citrus Co. to reclaim the goods in this case, this right is not absolute. The clause must align with relevant legal frameworks, such as insolvency laws, which may limit Citrus Co.'s ability to reclaim goods in certain situations. Thus, goods cannot always be reclaimed "under any circumstances." Choice C- Signing for delivery does not override a retention of title clause. Even if Fresh Delight accepted and signed for the delivery, the ownership of the goods remains with Citrus Co. until payment is received.
Choice D- Timely delivery has no bearing on the ownership of the goods when a retention of title clause is in place. Ownership is tied to the payment, not the delivery schedule. Hence, Citrus Co. can still reclaim the goods if payment hasn't been made.
Reference:
LO-2.2; Page 190; Monitoring Contract Performance

NEW QUESTION # 70
In the power dominance model, which factor is most likely to strengthen the buyers' power relative to suppliers?

A. High switching costs for buyers
B. A small number of suppliers for a large number of buyers
C. Low price sensitivity among buyers
D. High availability of substitute products

Answer: D

Explanation:
Choice D is the correct answer. When numerous substitute products are available, buyers can easily switch suppliers if dissatisfied, increasing their bargaining power in negotiations.
Incorrect answer:
Choice A- This typically increases supplier power, as a limited number of suppliers can dictate terms to a larger pool of buyers.
Choice B- This would decrease the power of buyers, as they would be less likely to change suppliers due to the costs involved.
Choice C- If buyers are not sensitive to price, they are less likely to negotiate strongly or switch suppliers based on cost, which decreases their bargaining power.
Reference:
LO-1.4; Page 127-128; Responsible use of power relationships

NEW QUESTION # 71
......

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Professional L5M5 Free Updates & Leading Offer in Qualification Exams & Trustable L5M5 Valid Exam Notes

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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q66-Q71):

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