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

1. Which scenario best illustrates the inclusion of a community benefits clause in a procurement contract?

A) A construction company agrees to use locally sourced materials to reduce costs
B) A supplier is required to adhere to strict environmental standards during project execution
C) A procurement contract mandates penalties for late delivery of goods
D) A contractor commits to employing a percentage of workers from the local community and offering training programs for skill development

2. A small tech startup (Startup A) is negotiating a partnership with a large corporation (Corp B). Corp B proposes to cover 80% of the development costs but requires Startup A to assume 90% of the risk in the event of product failure.
What is the most significant issue with Corp B's proposal in this negotiation?

A) The risk is disproportionately shared, placing an unfair burden on Startup A
B) Startup A will have limited control over the development process
C) The partnership will likely lead to profit-sharing conflicts later
D) Corp B is offering a higher percentage of funding than Startup A

3. A multinational engineering firm operates across multiple countries and has publicly committed to diversity and inclusion. However, an independent audit uncovers systemic issues:
1. Women with equal qualifications as men are consistently paid less for similar roles across all branches.
2. In the firm's regional office in Country X, minority ethnic applicants are frequently rejected for managerial roles without valid justification.
3. Employees with disabilities in Country Y are disproportionately placed in lower-growth roles, despite having skills for higher positions.
When questioned, leadership attributes these disparities to "cultural differences" and "regional norms." Which key labor rights issue does this scenario illustrate, and what actions should the company prioritize?

A) Freedom of association and collective bargaining; the company should allow workers to unionize and address these disparities through collective agreements
B) Elimination of discrimination in respect of employment and occupation; the company should implement a comprehensive diversity policy and actively monitor pay equity and equal opportunities
C) Abolition of child labor; the company should ensure that all employees meet the legal working age
D) Elimination of forced labor; the company should focus on ensuring no workers are coerced into taking undesirable roles

4. Which tier of a supply chain would the original equipment manufacturer have the closest relationship with?

A) Tier 3
B) Tier 1
C) Tier 2
D) No tier

5. Alphacom Corporation seeks to enhance its competitive advantage through global sourcing. Which of the following strategies would best contribute to this goal?

A) Establishing partnerships with local suppliers to enhance supply chain responsiveness
B) Hiring additional staff to manage remote sourcing operations
C) Investing in automated technologies to replace local labor
D) Centralizing all procurement decisions at the headquarters to streamline processes

Solutions: