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| Section | Objectives |
|---|---|
| Supply Chain Risk and Compliance | - Managing ethical risks in sourcing - Supplier compliance and monitoring |
| Ethics in Procurement and Supply | - Codes of conduct and ethical decision-making - Principles of professional ethics |
| Responsible Sourcing | - Social responsibility and human rights - Environmental considerations and impacts - Sustainability in supply chains |
| Corporate Social Responsibility (CSR) | - Stakeholder expectations and governance - CSR frameworks and standards |
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NEW QUESTION # 170
Incoterms are designed to be understood and interpreted on a worldwide basis. What is the interpretation for FOB (Free on Board)?
Answer: C
Explanation:
Under theFOB (Free on Board)Incoterm, the seller is responsible for delivering the goods onto the vessel at the named port of shipment. Once the goods are on board, the risk and responsibility transfer to the buyer.
From that point onward, the buyer assumes all costs and risks associated with the transportation of the goods, including freight charges, insurance, unloading, and delivery to the final destination.
This interpretation aligns with the Incoterms 2020 rules set by the International Chamber of Commerce (ICC). It's crucial to note that FOB is applicable only for sea or inland waterway transport and is not suitable for containerized cargo, where theFCA (Free Carrier)term is more appropriate.
References:
Trade Finance Global: FOB (Free on Board) - Incoterms 2020 Rule
Maersk: FOB Incoterms meaning | Free on Board shipping
NEW QUESTION # 171
Private sector procurement organisations should always allow suppliers at least 35 days to respond to invitations to tender. Is this statement true?
Answer: D
Explanation:
Response times should be tailored to the complexity of the tender. Responsible sourcing encourages flexibility in setting realistic timelines that allow suppliers adequate time to prepare, supporting efficient and effective sourcing without unnecessary delays.
NEW QUESTION # 172
Brooklyn Ltd is a manufacturer of windows and has a single sourcing relationship with their supplier of glass.
What relationship style would be best suited?
Answer: C
Explanation:
When single sourcing, you should aim to have a collaborative relationship with the supplier. They're the only ones who provide you with glass, which is a vital part of windows. So you need to make sure you have a good relationship with them and work with them to overcome any issues such as supply chain disruptions. If not- you've got no windows to sell!
NEW QUESTION # 173
A procurement manager is undertaking a financial due diligence of potential suppliers.
Which of the following financial elements are used in the calculation ofgearing?
Select TWO that apply.
Answer: D,E
Explanation:
Gearing is a measure of a supplier'slong-term financial riskand indicates the proportion of debt used to finance the organisation compared with equity. It is calculated usinglong-term debt (such as long-term loans)in relation toshareholders' equity (ordinary share capital). High gearing suggests greater reliance on borrowed funds, increasing the risk of financial instability and potential supply disruption. Cost of sales and operating costs relate to profitability, while current liabilities are short-term obligations assessed through liquidity ratios, not gearing. Procurement professionals must understand gearing when conducting financial due diligence to ensure suppliers are financially sustainable and capable of meeting long-term contractual commitments.
Reference:CIPS L4M4 Ethical & Responsible Sourcing Study Guide (v2) - Financial appraisal of suppliers; gearing and solvency analysis.
NEW QUESTION # 174
The Universal Declaration of Human Rights means that member states cannot restrict their citizens of any of the rights listed. Which of the following rights may apply to employees who make a complaint about unfair pay and conditions that are not comparable to others in the company?
Answer: C
Explanation:
The Universal Declaration of Human Rights (UDHR) Article 23(2) states that "Everyone, without any discrimination, has the right to equal pay for equal work." This underscores the principle of equality in the workplace, ensuring that employees are treated equally regarding pay and conditions. Therefore, employees raising concerns about unfair pay compared to their colleagues are exercising their right to be treated equally.
Reference:
Universal Declaration of Human Rights, Article 23(2):
NEW QUESTION # 175
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