2025 CIPS L5M5 MARVELOUS OFFICIAL CERT GUIDE

2025 CIPS L5M5 Marvelous Official Cert Guide

2025 CIPS L5M5 Marvelous Official Cert Guide

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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q53-Q58):

NEW QUESTION # 53
EcoWear, a well-known apparel company committed to sustainability, has recently expanded its supply chain but failed to address key ESG issues, leading to the following concerns:
A supplier has been reported for using toxic dyes, causing environmental harm.
Another supplier has poor labor practices, resulting in worker strikes.
If these ESG issues remain unresolved, what are the most likely consequences for EcoWear? Select any TWO.

  • A. Inability to secure or attract potential investments from banks
  • B. Increased Sales: Consumers are likely to overlook the issues and continue purchasing EcoWear products, boosting sales
  • C. Reputational Damage: The company may face backlash from consumers and advocacy groups, harming its brand reputation and customer loyalty
  • D. Legal Benefits: EcoWear could benefit from reduced regulatory scrutiny and enjoy a more favorable legal environment

Answer: A,C

Explanation:
Choice A- Increased Sales is unlikely, as consumers are increasingly aware of ESG issues and may choose to avoid brands that don't align with their values.
Choice B- Legal Benefits is also unlikely, as failing to address ESG issues could actually increase regulatory scrutiny and legal risks.
Option C & D is the answer as per the study guide.

Reference: LO-1.1; Page 53; Impact of breaches of ethical codes or ESG standards on reputation and brand


NEW QUESTION # 54
Which of the following form the 'Triple Bottom Line'? Select THREE

  • A. planet
  • B. profit
  • C. placement
  • D. product
  • E. people

Answer: A,B,E

Explanation:
People, Planet and Profit are the 'triple bottom line' - see p.3 of the study guide. This is also known as the 3Ps


NEW QUESTION # 55
XYZ Corp is seeking industry certification and has hired an external firm to assess its compliance with regulatory requirements and industry standards. The firm will provide an unbiased evaluation and recommend improvements. What type of audit is XYZ Corp conducting?

  • A. Internal audit
  • B. Third-party audit
  • C. Financial audit
  • D. Compliance audit

Answer: B

Explanation:
Choice B- While the audit focuses on compliance (option C), the key detail in the scenario is that the audit is being conducted by an external firm. This makes it a third-party audit. A compliance audit (option C) could be conducted either internally or externally, depending on the organization's approach.
Incorrect answer:
Choice A- Internal audits are conducted by the organization's own employees or an internal audit team to assess compliance, risks, and processes. Since XYZ Corp hired an external firm, this is not an internal audit.
Choice C- Although the audit involves assessing compliance with regulatory and industry standards, the key point in the scenario is the use of an external firm. This makes it a third-party audit. A compliance audit can be conducted internally, externally, or by a third party. Incorrect (in this context) Choice D- A financial audit focuses on verifying the accuracy of an organization's financial statements and records. The scenario does not mention financial data but instead focuses on regulatory and industry compliance. Therefore, this is not a financial audit.
Reference:
LO-2.3; Page 207-208; Sourcing third parties for auditing services


NEW QUESTION # 56
While low-cost country sourcing can provide substantial cost savings for buyers, it also comes with significant risks. Which of the following should be avoided as a potential target for low-cost country sourcing?

  • A. A country where companies use Just in Time (JIT) method of SCM
  • B. A country that is remote geographically but with good transportation routes
  • C. A country consisting of workers with detailed knowledge of the product
  • D. A country with stable tax and tariff structures

Answer: A

Explanation:
Choice B-It is important to calculate the potential cost of a supplier failing to meet the level of service timeline. If a company uses JIT methods of supply chain management, then LCCS is not a suitable option especially for critical components because delivery delays can be costly and disruptive. Without backup inventory, customers may have to wait for the company to receive supplies and manufacture the product. Thus is the correct answer.
Incorrect answer:
Choice A- A country with good transportation routes is critical to analyse as shipping will be fairly economical. Therefore is a potential target for LCCS.
Choice C- Level of education and skills of workers in chosen low cost country will help in producing vital key components as they will specialize in them. Thus this country should be a potential target of LCCS.
Choice D- Tariffs and taxes can significantly impact the cost-effectiveness of sourcing from low-cost countries. Understanding the export taxation in the source country and import tariffs in one's own country is crucial. This being stable can help in calculating and making a decision of selecting a country for low cost sourcing.
Reference:
LO-1.2; Page 76; Low-cost country sourcing


NEW QUESTION # 57
A global manufacturing company is looking for a collaborative platform to enhance its environmental, social, and governance (ESG) practices. It requires access to practical tools, peer networking, and resources to tackle challenges such as climate change, water sustainability, and supply chain management.
Which organization would best meet the company's needs?

  • A. Global Environmental Management Initiative (GEMI)
  • B. International Procurement Organization (IPO)
  • C. Greenpeace
  • D. United Nations Environment Programme (UNEP)

Answer: A

Explanation:
Option B- GEMI is tailored for businesses seeking tools, resources, and collaborative opportunities to enhance their ESG practices. Unlike other options, GEMI specializes in corporate environmental management and provides solutions to the practical challenges companies face in their operations.
Incorrect answer:
Option A- The IPO primarily supports global procurement professionals and organizations in reducing & optimizing their procurement and supply chain strategies. While it may offer insights into sustainable procurement, it does not specialize in environmental or sustainability management across broader operational areas like GEMI does.
Option C- UNEP sets international environmental agendas and fosters policies at the government level, but it does not provide the practical tools and peer collaboration specifically tailored for businesses.
Option D- Greenpeace is an independent global campaigning organization focused on confronting environmental issues such as climate change, deforestation, and ocean protection through activism and advocacy. Its primary approach involves raising public awareness and pressuring corporations and governments to adopt environmentally friendly practices, rather than providing businesses with practical tools or platforms for internal sustainability improvements.
Reference:
LO-2.1; Page 170; Use of risk mitigation strategies to achieve ESG objectives to secure ethical and sustainable procurement and supply arrangements


NEW QUESTION # 58
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