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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q44-Q49):

NEW QUESTION # 44
The Global Compact Principles of the UN are legally binding for the member states who have signed up. Is this TRUE?

A. Yes - it is voluntary to join, but it is legally binding once signed up
B. No- it is not legally binding and there is no requirement to publish any progress reports
C. No- it is voluntary to join and not legally binding
D. Yes- reports must be filed regularly on process

Answer: C

Explanation:

Reference: LO-3.1; Page 257; The role of the UN and ILO in pursuing improved ESG and Ethical standards

NEW QUESTION # 45
Which term describes the phenomenon where environmental disruptions in the supply chain cause amplified fluctuations in demand or inventory levels as they move upstream?

A. Greenwashing
B. Fairwashing
C. Bluewashing
D. Green Bullwhip Effect

Answer: D

Explanation:
sustainability-related disruptions lead to amplified fluctuations in demand or inventory levels throughout the supply chain.
Incorrect answer:
Option A- Greenwashing refers to the practice of companies misleading consumers about the environmental benefits of their products or operations, without making substantial sustainable improvements.
Option B- Bluewashing refers to a company's attempt to improve its reputation by associating itself with the United Nations or other international organizations without genuine commitment to the causes they claim to support.
Option D- Fairwashing refers to companies falsely claiming to support fair trade practices or other ethical standards to improve their public image without implementing those practices authentically.
Reference:
LO-3.2; Page 282; The benefits and challenges of independent standards in securing ESG objectives in ethical and sustainable procurement and supply arrangements

NEW QUESTION # 46
According to CIPS, demand management enables an organization to align its capacity with fluctuations in demand. Effective demand management ensures that products or services are available to the right people at the right time and place. Which of the following actions must the organization take to successfully manage demand?
1. Organization must keep their warehouses full of safety stock to meet demand effectively
2. Organizations must divert funds from other operational activities in order to acquire inventories
3. Organization must be prepared to respond to volatile events
4. Organizations must involve stakeholder in the process for real time information about demand

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

Answer: C

Explanation:
Based on the figure from the study guide, demand can be managed in four ways. Among the given options, Choices 3 and 4 are included. Therefore, the correct answer is Option C.

Reference: LO-1.4; Page 109; Demand Management and the need for urgent orders

NEW QUESTION # 47
A manufacturing company experienced frequent breakdowns of a critical machine due to improper maintenance. To resolve this, management is investigating the root cause and implementing measures to prevent future occurrences. What type of plan is the management prioritizing?

A. Risk mitigation plan
B. Root Cause
C. Corrective Action Plan
D. Preventative Action Plan

Answer: D

Explanation:
Choice B- This is the correct answer because the focus is on implementing measures to prevent future breakdowns and ensure the issue does not recur.
Incorrect answer:
Choice A- This would apply if the management's focus was on fixing the immediate issue (e.g., repairing the broken machine). Since the emphasis is on prevention, this is incorrect.
Choice C- While identifying the root cause is a part of the process, the plan described involves taking preventive action beyond just identifying the cause.
Choice D- This is incorrect because risk mitigation focuses on reducing potential risks, often before they occur. In this case, the issue has already occurred, and the goal is prevention, not general risk management.
Reference:
LO-2.4; Page 229-230; Creating corrective action plans and supplier development programmes

NEW QUESTION # 48
A group of small-scale coffee farmers in a rural village has been receiving the Fairtrade Premium for their products. During a recent community meeting, they discuss how to allocate the premium funds for the upcoming year. Which of the following projects would best align with the principles of the Fairtrade Premium in addition to the fair trade price?

A. Distributing the funds equally among the farmers to use as they see fit
B. Investing in building a community health clinic to improve access to healthcare for all villagers
C. Allocating the funds to one farmer to expand their personal farming business
D. Using the funds to subsidize private education for the children of the wealthiest farmers

Answer: B

Explanation:
Choice B- This option aligns with the principles of Fair Trade, as the premium is intended to support projects that benefit the community as a whole, fostering development and sustainability.
Incorrect answer:
Choice A- While this might seem fair at first glance, the Fairtrade Premium is not meant for personal distribution. Its purpose is to fund collective projects that benefit the entire community, such as infrastructure, education, or health initiatives.
Choice C- This option does not align with the principles of equity and inclusivity. Fair Trade encourages using the premium to benefit the entire community, particularly the most vulnerable and marginalized groups, rather than focusing on individuals who are already advantaged.
Choice D- Providing funds to a single farmer for personal business expansion is not in line with the collective approach of Fair Trade. The premium is intended to address community-wide challenges and improve the shared resources and infrastructure for all.
Reference:LO-3.3; Page 305; Fairtrade standards that affect the workplace and producers and their implications for procurement and supply

NEW QUESTION # 49
......

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