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| Section | Objectives |
|---|---|
| Topic 1: Understand compliance issues when sourcing from suppliers | - Anti-bribery and anti-corruption measures - Regulatory and legal compliance - Codes of conduct and ethical standards - Ethical sourcing and corporate social responsibility (CSR) - Global sourcing considerations and Incoterms - Sustainability and environmental considerations - Modern slavery and human rights in supply chains |
| Topic 2: Understand the key processes that can be applied to the analysis of potential external suppliers | - Financial analysis of suppliers - Supplier appraisal and evaluation methods - Use of Request for Information (RFI), Request for Proposal (RFP) and Request for Quotation (RFQ) - Supplier audits and due diligence - Risk assessment in supplier selection |
| Topic 3: Understand options for sourcing of requirements from suppliers | - Factors influencing sourcing decisions - Insourcing vs outsourcing decisions - Single, dual and multiple sourcing - Sourcing strategies and approaches |
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NEW QUESTION # 151
Greg is doing some research on a potential supplier and is concerned that the supplier's funding is based on long-term debts and loans. Working with this supplier therefore might bring additional risks to Greg's business. What should Greg do about his concerns?
Answer: D
Explanation:
Greg needs to use a gearing ratio. Gearing is a measure of how the business is being funded and is based on the ratio of debt to equity Gearing comes up a lot in the exam. Also make sure you know what Return on Investment, Acid Test and EBITDA are.
Return on Investment (ROI): How to Calculate It and What It Means (investopedia.com) EBITDA: Definition, Calculation Formulas, History, and Criticisms (investopedia.com) Acid-Test Ratio: Definition, Formula, and Example (investopedia.com)
NEW QUESTION # 152
Which of the incoterms listed are suitable for transporting goods via train?
Answer: B
Explanation:
EXW- exworks is a suitable incoterm for transporting goods both by rail and boat. It can be used regardless of the mode of transport.
The other three are for transport over water. P. 143 Shipping Incoterms: the Complete Guide - Guided Imports Some students report a lot of questions on Incoterms in the exam, some say they only had 1. Best bet is to learn them if you possibly can.
NEW QUESTION # 153
When using a 'credit account' payment mechanism, when does a supplier receive payment for the goods?
Answer: D
Explanation:
In a 'Credit Account' payment mechanism- the supplier receives payment after the goods are delivered, in line with agreed payment terms (which may be 30 days or something like that).
NEW QUESTION # 154
Incoterms are divided into four main groups to follow the movement of goods covering the exporter's premises, export and import points, and cost and risk. Which letters represent the four groups of Incoterms?
Answer: C
Explanation:
Incoterms are grouped as E (Ex Works), F (Free Carrier), C (Carriage Paid To), and D (Delivered Duty Paid), reflecting various stages of responsibility transfer between buyer and seller. Understanding Incoterms is critical for responsible sourcing, as it clarifies logistics and cost responsibilities.
NEW QUESTION # 155
Which of the following are key areas of regulations governing responsible procurement and supply?
Answer: C
Explanation:
Regulatory frameworks that affect procurement focus on ethical practice (anti-bribery, modern slavery, human rights), data protection (GDPR and similar), and competition law (to prevent collusion and monopolistic practices). While digitisation and innovation are important trends, they are not regulatory requirements. Similarly, culture, branding, and uniforms are internal matters, not regulatory areas.
Responsible sourcing requires procurement professionals to ensure compliance with these regulations to protect stakeholders, maintain fairness, and safeguard organisational reputation.
Reference: CIPS L4M4 Study Guide (v2), LO: "Concepts" - legal and regulatory environment of ethical sourcing.
NEW QUESTION # 156
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