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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Understand key processes to analyse potential external suppliers | 25% | - Supplier appraisal and evaluation
|
| Topic 2: Understand options for sourcing requirements from suppliers | 25% | - Sourcing approaches and strategies
|
| Topic 3: Understand ethical and responsible sourcing principles and practices | 25% | - Sustainable and responsible sourcing
|
| Topic 4: Understand compliance issues when sourcing from suppliers | 25% | - Legislative and regulatory requirements
|
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NEW QUESTION # 77
The use of Incoterms will eliminate all risks involved in international trade transactions. Is this statement true?
Answer: D
Explanation:
Incoterms clarify responsibilities between buyers and sellers, reducing certain risks but not eliminating them entirely. Responsible sourcing requires recognising that Incoterms are only part of risk management in international trade, and other factors, such as supplier reliability and quality, must be considered.
NEW QUESTION # 78
The International Chamber of Commerce (ICC) publish a list of commercial rules known as Inco-terms. What is the purpose of these rules?
Answer: A
Explanation:
Incoterms describe the point at which an item is considered 'delivered' and explains who has the risk of what during the transport of the goods.
NEW QUESTION # 79
A buyer is only interested in working with suppliers who have strong Environmental and Social Governance practices. It is therefore using ethical criteria as supplier selection stage to determine which suppliers to work with. Which of the following statements is true?
Answer: A
Explanation:
A supplier who follows the CIPS Code of Conduct is more likely to meet the buyer's needs is the correct answer.
The other options are wrong:
1) Compliance with Codes of Conduct from professional bodies is optional. E.g. CIPS - no organi-sation is forced to comply with CIPS.
2) Unethical behaviour is not impossible to detect, it may be difficult but with correct due diligence and things like audits it's completely possible
3) ISO 14001 is quality management so is irelevent.
NEW QUESTION # 80
Which of the following types of data do credit rating agencies include in their assessment of organisations?
(Select TWO)
Answer: A,B
Explanation:
Credit rating agencies assess an organisation's financial stability and risk of default. Key data includes financial obligations (such as outstanding loans, debt levels, repayment schedules) and payment history (how reliably the firm pays creditors and suppliers). These indicators show liquidity, cash flow reliability, and debt servicing ability. Factors such as "value for money" or "ecosystems" are irrelevant in a financial risk context.
Responsible sourcing requires buyers to consider supplier financial resilience, as instability could disrupt supply chains, increase risk exposure, and lead to reputational damage. Agencies like Moody's, S&P, and Fitch provide independent assessments that complement in-house financial analysis.
Reference: CIPS L4M4 Study Guide (v2), LO: "Application" - financial appraisal tools and supplier risk assessment.
NEW QUESTION # 81
During which stage of the procurement cycle would you remove suppliers that do not add value, or could pose a risk to the buying organisation?
Answer: C
Explanation:
At supplier selection stage, unsuitable suppliers should be removed (those that do not add value or pose a risk). At develop strategy stage you're not even looking at suppliers yet- you're just deciding what you need.
At contract award and asset management it's too late.
CIPS procurement cycle - Procurement Supply Cycle | CIPS
NEW QUESTION # 82
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