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CIPS Ethical and Responsible Sourcing Sample Questions (Q119-Q124):

NEW QUESTION # 119
Rules regulating the type of goods and the volume that can be imported into a country or trade block are commonly known as what?

A. duties
B. laws
C. profits
D. tariffs

Answer: B

Explanation:
This is tariffs. Be careful not to confuse tariffs and duties;
tariffs = rules and duties = payments.

NEW QUESTION # 120
Which of the following financial ratios would indicate a supplier's potential exposure risk to a steeprise in inflation?

A. acid test
B. gearing ratio
C. gross profit margin
D. current ratio

Answer: B

Explanation:
The correct answer is 'gearing ratio'.
Gearing measures how much of a company's funding is based on long-term debt or loans- this would be affected by a steep rise in inflation. If a company has a mortgage on their offices or facto-ry and they need to remortgage and inflation has gone up a lot- they'll be paying a lot more on their mortgage. This will severely effect the gearing ratio as they'll have more outgoings than incoming.
Gross profit margin COULD be affected by inflation, for example if you've got hyper-inflation and the country goes into recession and people stop buying your product. However, this answer isn't al-ways right and depends on many factors- the industry, the product, the company etc, so for the purpose of CIPS should be discounted. There are many industries which are immune to inflation.

NEW QUESTION # 121
How can a buyer monitor a supplier's ethical workforce standards throughout a long-term contract?

A. Commission periodic audits by specialist third parties to highlight any malpractice
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. Check the International Labour Organisation's database regularly for information specifically about that supplier

Answer: A

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 # 122
What might a buyer encounter if the supplier's government has introduced a protectionist measure?

A. Inward processing relief
B. Carnets
C. Import duties
D. Arbitration

Answer: C

Explanation:
Protectionist measures are policies implemented by governments to protect domestic industries from foreign competition. One common protectionist measure is the imposition of import duties, which are taxes levied on imported goods. These duties make imported products more expensive, encouraging consumers to buy domestic products instead. Buyers sourcing internationally must be aware of such duties as they directly impact the total cost of procurement.
Exact Extract from Study Guide:
"Furthermore, there are many potential cost considerations when importing goods which can include taxes & duties or storage costs. By understanding all key legal, regulatory and organizational requirements prior to sourcing from international suppliers, businesses can ensure compliance while also maximizing cost savings."

NEW QUESTION # 123
Chantelle is a procurement apprentice working in the public sector for an education organisation. As a result of studying towards the CIPS qualification, Chantelle has become aware of the importance of incorporating sustainability and environmental award criteria into tender exercises and has informed her manager of this.
For the purchase of IT supplies, which requirement could be evaluated within the sustainability and environmental award criterion?

A. Competitive pricing
B. Delivery lead time
C. After-sales support
D. Consolidated delivery

Answer: D

Explanation:
Incorporating sustainability and environmental criteria into procurement decisions is essential for promoting responsible sourcing practices.Consolidated deliveryrefers to combining multiple shipments into a single delivery, which can significantly reduce the carbon footprint associated with transportation. By minimizing the number of deliveries, organizations can decrease fuel consumption and emissions, aligning with environmental sustainability goals.
This practice is particularly relevant in the procurement of IT supplies, where frequent, small deliveries can be consolidated to improve efficiency and environmental performance. Evaluating suppliers based on their ability to provide consolidated deliveries demonstrates a commitment to sustainable procurement practices.
References:
CIPS Study Guide: Ethical and Responsible Sourcing - Study Guides - CIPS Quizlet: CIPS L4M4 Ethical and Responsible Sourcing Flashcards

NEW QUESTION # 124
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CIPS Ethical and Responsible Sourcing Sample Questions (Q119-Q124):

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