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CIPS Ethical and Responsible Sourcing Sample Questions (Q99-Q104):
NEW QUESTION # 99
How can a buyer monitor a supplier's ethical workforce standards throughout a long-term contract?
- A. Check the International Labour Organisation's database regularly for information specifically about that supplier
- B. Contact management directly on a periodic basis, as stipulated in contract terms
- C. Request a completed self-assessment by the supplier on a monthly basis
- D. Commission periodic audits by specialist third parties to highlight any malpractice
Answer: D
Explanation:
Conducting periodic audits by third-party specialists is a reliable way to monitor compliance with ethical standards, as these audits provide an objective assessment. This aligns with ethical sourcing practices, as it promotes accountability and ensures continuous adherence to agreed-upon standards.
NEW QUESTION # 100
Ivan is an investor who is looking to invest in new businesses. He is reviewing several companies and working out what his equity would be. Which of the following does Ivan need to know tocalculate shareholder equity? Select TWO.
- A. net profit
- B. total assets
- C. net income
- D. total liabilities
Answer: B,D
Explanation:
Shareholder Equity = Total Assets - Total Liabilities
NEW QUESTION # 101
A buyer has been working with their business managers on a tender. The buyer is now assessing the tender proposals from the external market. Is it good practice for the procurement buyer to makesourcing recommendations?
- A. Yes, the procurement buyer can advise on the competitive proposal but should engage with the business managers about the decision to award the tender
- B. No, it is a lengthy, costly, and unnecessary step for the procurement buyer to engage business managers
- C. Yes, the procurement buyer should assess and take all decisions to award the tender independently of the business managers to avoid conflict of interest
- D. No, the buyer's recommendations are not relevant to the final sourcing decision, which must be taken by the business managers
Answer: A
Explanation:
Engaging with business managers while making sourcing recommendations ensures that the buyer considers multiple perspectives, reducing potential biases and improving decision-making. This approach aligns with ethical sourcing practices by promoting collaboration and transparency in tender decisions.
NEW QUESTION # 102
A buyer for a large manufacturing organisation is assessing a sole supplier tender opportunity. The buyer is finding it challenging to differentiate the proposals on unit purchase price. Are there any added values that the procurement manager can use to leverage the sole supplier proposal?
- A. No, because a buyer has no leverage over a sole supplier
- B. Yes, the buyer can negotiate on aspects such as after-sales service
- C. Yes, but only if the buyer decides to re-start the tender opportunity
- D. No, the buyer must make the decision based on the existing information
Answer: B
Explanation:
In cases where price differentiation is minimal, negotiating on added-value services like after-sales support can offer additional benefits. This aligns with responsible sourcing by focusing on long-term value and fostering a cooperative relationship with the supplier.
NEW QUESTION # 103
ABC Ltd works with supplier XYZ Ltd who uses a variety of subcontractors. ABC has recently learned of an ethical breach being committed by one of XYZ's subcontractors. What should ABC do?
- A. Terminate the contract
- B. Seek compensation
- C. Research alternative suppliers
- D. Recommend remedial action
Answer: D
Explanation:
ABC should do a 'root cause analysis' to find out where the issue has come about, and why. From there, once they know what the breach is and how serious it is, they can suggest corrective action.
They can't jump straight to terminating the contract or seeking damages as it's not the supplier itself but rather the subcontractor. Also that would be really hasty considering we don't know what the issue is and what the market conditions are like. That supplier may be the only one who can provide the product. We also don't know if the supplier knows about the issue themselves.
NEW QUESTION # 104
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