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

1. Which of the following are regarded as potential benefits of responsible procurement?
1. Reduction of staff retention for the organization
2. Enhanced business reputation and social improvements
3. Increased operational risks due to supplier diversity
4. Cost savings due to the application of lifecycle costing

A) 4 and 1
B) 2 and 3
C) 2 and 4
D) 1 and 2

2. Demand forecasting collects data on a company's supply capacity for an item, including current and projected supply categorized by industry and product end use. Is this statement TRUE?

A) No - supply forecasting predicts short- and long-term prices and trends
B) No - demand forecasting analyzes a company's demand for an item, including current and projected demand
C) Yes - it gathers information about both supply and demand
D) Yes - it is primarily used by manufacturing companies within the supply chain

3. A homeowner planning to purchase a new air conditioner notices an energy rating label on each model. This rating scheme provides details on the unit's energy efficiency, cooling capacity, and environmental impact. How does this information assist the buyer in making a decision?

A) It guarantees that the air conditioner will last for a specific number of years
B) It ensures that all air conditioners have the same level of performance
C) It provides clear information on energy efficiency and expected electricity consumption
D) It ensures that the most expensive air conditioner is always the best choice

4. A leading coffee retailer has launched an initiative to purchase raw materials, such as coffee beans, directly from farmers instead of through intermediaries like exporters. By adopting a partnership approach and investing in the local community, what is this practice called?

A) World Trade
B) Fair Trade
C) Direct Trade
D) Trade Initiative

5. The unethical practice of using information that is not publicly available to trade on the stock market is commonly known as what?

A) greasing the wheels
B) kickback
C) insider trading
D) bribery

Solutions: