L5M5 Valid Test Review - L5M5 Exam Simulator

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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q75-Q80):

NEW QUESTION # 75
In what circumstances is Expert Determination the most suitable method for resolving contract disputes?

A. personality disputes
B. technical disputes
C. international contracts
D. high value contracts

Answer: B

Explanation:
Choice C- This is the correct answer. Expert Determination is particularly suited for disputes that require specialized technical knowledge, such as issues related to engineering, construction, or IT systems. An independent expert with relevant expertise can assess and resolve the dispute effectively.
Incorrect answer:
Choice A-Expert Determination is not specifically suited to international contracts. While it could be used in such cases, it is more about the nature of the dispute (technical issues) rather than the geographic scope of the contract.
Choice B- The value of the contract does not determine the suitability of Expert Determination. Other methods like arbitration or litigation are often more common for resolving high-value disputes.
Choice D- Expert Determination is not designed to handle personality conflicts or disputes rooted in interpersonal disagreements. Mediation or other relationship-focused methods are more appropriate in such cases.
Reference:
LO-2.4; Page 236; Escalating non-compliance and making exit arrangements

NEW QUESTION # 76
Which of the following is NOT an element of a Fair Trade label?

A. Minimum Price
B. Marketing Incentives
C. Traceability
D. Long-term Relationships

Answer: B

Explanation:
Choice B- This is not an element of the Fair-Trade label. While Fair Trade promotes ethical practices, it does not involve offering direct marketing incentives as part of its certification system.
Incorrect answer:
Choice A- This is an element of the Fair-Trade label, ensuring that producers receive a guaranteed baseline payment to protect against market fluctuations.
Choice C- This is an element of the Fair-Trade label, ensuring that certified products can be tracked from production to consumption.
Choice D- Long-term relationships focus on building consistent partnerships between buyers and producers and is also an element.
Reference:
LO-3.3; Page 301; Fair Trade International (FI), global fair-trade organizations and their implications for procurement and supply

NEW QUESTION # 77
Demand forecasting collects data on a company's supply capacity for an item, including current and projected supply categorized by industry and product end use. Is this statement TRUE?

A. No - demand forecasting analyzes a company's demand for an item, including current and projected demand
B. Yes - it is primarily used by manufacturing companies within the supply chain
C. Yes - it gathers information about both supply and demand
D. No - supply forecasting predicts short- and long-term prices and trends

Answer: A

Explanation:
Demand forecasting involves analyzing a company's demand for a specific item or SKU, including current and projected demand categorized by industry and product end use. Therefore, the correct answer is Choice A.
Reference:
LO-1.4; Page 114; Short term commercial gains and long term availability

NEW QUESTION # 78
Which three of the following can the procurement function use to integrate sustainability into contract pricing and payment terms?

A. Pricing mechanisms focused on developing large-scale businesses
B. Flexible price agreements
C. Pricing based on quality focus
D. Incentivized payment terms
E. Payment terms focused on supporting multinational corporations

Answer: B,C,D

Explanation:
Choice A- Supports sustainability by accommodating cost changes tied to sustainable practices (e.g., carbon pricing, resource scarcity).
Choice C- Pricing based on quality focus prioritizes sustainability by valuing higher quality, sustainable products or services over lower-cost alternatives.
Choice D- Rewards suppliers for meeting or exceeding sustainability targets (e.g., early payments for sustainable achievements).
Incorrect answer:
Choice B- Not directly related to sustainability, unless tied to large-scale sustainable initiatives (e.g., renewable energy projects).
Choice E- This does not directly contribute to sustainability and may favor established corporations over smaller, more innovative, and potentially sustainable suppliers.
Reference:
LO-2.2; Page 187-191; Monitoring Contract Performance

NEW QUESTION # 79
When a major garments factory faces adverse publicity due to alleged child labor, which of the following recognized techniques would be most effective in identifying the root cause of the issue?

A. Whole life costs
B. Six sigma
C. Supply chain mapping
D. Value engineering

Answer: C

Explanation:
Choice C - Supply chain mapping is a technique that enables a comprehensive analysis of the entire supply chain involved in the production and distribution of garment products. It helps identify the origin of the issue and how it spread. Therefore, it is the correct answer.
Incorrect answer:
Choice A - WLC is used to assess the total cost of an asset over its whole life, taking account of its initial cost and the cost of operation, maintenance, upgrade and disposal. It does not help in identifying the child labor issue.
Choice B - Value engineering is a method used to improve the value of a product or process, not primarily focused on issue identification.
Choice D- Six sigma is a methodology aimed at process improvement and reducing defects, not specifically tailored for issue identification.
Reference:
LO-2.1; Page 145; Mapping supply chains to achieve supply chain transparency

NEW QUESTION # 80
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L5M5 Valid Test Review - L5M5 Exam Simulator

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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q75-Q80):

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