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  1. Home
  2. CIPS Certification
  3. L5M5 Exam
  4. CIPS.L5M5.v2025-11-24.q71 Dumps
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Question 6

According to the International Institute for Sustainable Development, which of the following are part of the 6 key components of a CSR Plan? Select THREE

Correct Answer: C,D,E
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (p.8) outlines the six key components of a CSR plan: CSR Assessment, CSR Strategy and Refinement, Implementation Plan and Activities (C), Commitment to Stakeholder Engagement (D), and Verification and Evaluation of Results (E). An introduction (A) and financial analysis (B) may support a CSR plan but are not listed as key components. Procurement professionals should ensure CSR plans are robust, measurable, and involve stakeholder engagement to gain legitimacy and trust.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.8
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Question 7

Which of the following are regarded as potential benefits of responsible procurement?
1. Reduction of staff retention for the organization
2. Enhanced business reputation and social improvements
3. Increased operational risks due to supplier diversity
4. Cost savings due to the application of lifecycle costing

Correct Answer: A
Choice 2- Selecting sustainable good and services from responsible suppliers creates a positive reputation, and social improvements increase therefore a business attracts new customers.
Choice 4- Responsible procurement uses life cycle costing which considers the whole life span of a product rather than the initial purchase cost only. Thus is more cost effective because costs that arise throughout the product's life are also taken into account.
Incorrect answer:
Choice 1- Responsible procurement shows commitment to long term environmental and social issues which helps to retain employees and attract new employees. Employees want to be associated with such business which are investing in the future and makes employees more motivated. Therefore choice 1 is the wrong choice.
Choice 3-This is not a benefit. While engaging a diverse supplier base can introduce complexity, it typically enhances resilience rather than increasing risks.
Reference:
LO-1.1; Page 10; Analyze the application of ethical and ESG (Environmental, Social and Governance) factors in supple chains
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Question 8

The ILO's fundamental principles and rights at work are binding on which countries?

Correct Answer: B
Choice B- This is the correct answer. The International Labor Organization (ILO) requires all member states to uphold its fundamental principles and rights at work, even if they have not ratified the specific conventions associated with these principles. These fundamental principles are part of the ILO Declaration on Fundamental Principles and Rights at Work (1998), which includes:
Freedom of association and the right to collective bargaining.
Elimination of forced or compulsory labor.
Abolition of child labor.
Elimination of discrimination in respect of employment and occupation.
When a country joins the ILO, it automatically accepts an obligation to respect, promote, and realize these fundamental principles, regardless of whether it has formally ratified the associated conventions. This reflects the ILO's commitment to promoting universal labor standards and protecting workers' rights globally.
Incorrect answer:
Choice A- This is incorrect because the fundamental principles apply to all member states, not just those that ratified specific conventions.
Choice C- The principles are universal and apply to all member states, regardless of economic status.
Choice D- Even countries with weak labor standards are obligated to promote these principles as ILO members. So, this is not the answer.
Reference:
LO-3.1; Page 248-249; Standards set by the United Nations (UN) and the International Labor Organization (ILO)
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Question 9

The unethical practice of using information that is not publicly available to trade on the stock market is commonly known as what?

Correct Answer: C
Comprehensive and Detailed Explanation From Exact Extract of Documents:
Insider trading occurs when individuals use confidential or non-public information to gain an unfair advantage in stock market trading. The L5M5 study guide (p.3) identifies insider trading as an example of unethical business behaviour. It is illegal in most jurisdictions because it undermines market fairness and investor confidence. Bribery (A) and kickbacks (B) involve corrupt practices in procurement, while "greasing the wheels" (D) refers to facilitation payments. Procurement professionals must avoid insider trading directly and indirectly (e.g., suppliers disclosing confidential financial information) to maintain ethical compliance and governance.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.3
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Question 10

XYZ Corporation has been acquired by a global company that plans to centralize all sourcing activities and standardize processes. Which factor could help XYZ Corporation gain a competitive advantage through this centralization?

Correct Answer: B
Choice B- Improved benchmarking and shared data can help a company agree on prices with global competitors and gain a competitive advantage. Option B is the correct answer.
Incorrect answer:
Choice A- Legal obligations have to be maintained from wherever the company is operating. Avoiding or adhering to legislations is not a competitive advantage.
Choice C- Competitive advantage can best be described as what sets an organization apart. Increased efficiency is the result of competitive advantage but not a competitive advantage itself.
Choice D- Increased due diligence activity resulting in lower governance of suppliers is not a competitive advantage for XYZ Corporation.
Reference:
LO-1.2; Page 63-65; Competitive advantage through global sourcing
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