Ethical and Responsible Sourcing (L4M4) Free Practice Test

Question 1

Which beneficial outcomes would result from a procurement decision to change supply to alocal sourcefor a services contract?
Select TWO that apply.

A. Reduced need for contract management

B. Employment opportunities for local workers

C. Reduced impacts on the local environment

D. Economic stimulation for the local area

E. Improved innovation in service design

Correct Answer: B,D

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Question 2

When might a company send a Request for Information (RFI) instead of a Request for Quotation (RFQ)?
(Select TWO)

A. To establish the details of environmental and quality certificates that the supplier may have

B. To obtain indicative prices that could be offered for a range of required products

C. To ask for details of the product or range of services that the supplier has to offer

D. To negotiate the payment terms detailed in the terms and conditions of sale

E. To determine whether the supplier can fulfil a purchase order already placed

Correct Answer: A,B,C

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Question 3

What is a major benefit to using Incoterms when sourcing goods internationally?

A. it ensures ethical business practices

B. it replaces lengthy contractual clauses

C. it replaces the need for insurance

D. it ensures value for money

Correct Answer: B

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Question 4

AirFreight Ltd is a rapidly growing organisation and has employed a consultant to review its expenditure on bought-in goods and services. The highest value of expenditure is vehicle livery, which the organisation classifies asstrategic importance.
How can this information help the consultant decide on the procurement strategy?

A. Vehicle livery is high value but needs little attention; an arm's length approach is required

B. Regardless of value and importance, vehicle livery should be treated the same as low-value categories

C. There are several suppliers, so only moderate time and effort should be spent using a transactional approach

D. Strategic high-value expenditure categories should be prioritised, requiring a closer and more collaborative supplier relationship

Correct Answer: D

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Question 5

Which of the following payment mechanisms is most beneficial to the supplier?

A. letter of credit

B. sight draft

C. cash in advance

D. open account

Correct Answer: C

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Question 6

It is good practice for the procuring organisation's auditors to undertake the following upon completion of a supplier's audit. Select the TWO that apply.

A. Call for a meeting with colleagues and share confidential details of the audit

B. Do nothing, after all, this is a known supplier incapable of serious breaches

C. Prepare an audit report that may be shared with the supplier in advance

D. Inform the supplier of any non-conformances and improvement opportunities

E. Report non-compliance to police and have the supplier arrested for lapses

Correct Answer: C,D

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Question 7

Amnesty International, Oxfam and CIPS are examples of what type of organisation?

A. partnerships

B. public limited companies

C. not-for-profit

D. limited liability

Correct Answer: C

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Question 8

Why do tenders often have longer timescales in the public sector compared with private sector?

A. There is wider stakeholder involvement in the public sector

B. There is a more detailed debrief requirement in the public sector

C. All public sector purchases must use a tendering procedure

D. Regulation of the public sector dictates minimum timescales

Correct Answer: D

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Question 9

Commodities can be traded on a stock exchange and are generally divided into one of four categories. Which of the following is not one of these four categories?

A. metals

B. energy

C. livestock

D. plastics

Correct Answer: D

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CIPS Ethical and Responsible Sourcing (L4M4) Free Practice Test