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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 31

Sustainability-related measures such as ESG are mandatory in all countries and compliance is governed by legislation. Is this TRUE?

Correct Answer: C
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (p.181) explains that sustainability-related measures, such as ESG, are only mandatory in some countries, not universally. For instance, the UK has legislation banning single-use plastic straws, while other countries may not. International organisations like the UN and ILO promote sustainability, but they cannot impose legislation globally-any treaty or framework must be ratified into national law. This means compliance is fragmented and varies across jurisdictions. Procurement professionals must therefore remain vigilant, as sourcing internationally exposes them to differing sustainability obligations and standards.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.181
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Question 32

Which of the following statements about the ILO (International Labour Organisation) is incorrect?

Correct Answer: A
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The ILO (International Labour Organisation) is an agency of the United Nations (UN), not the WTO. The L5M5 study guide (p.249) explains that the ILO promotes labour rights globally, sets international standards, and provides mechanisms for complaints and representation. Its principles include eliminating child labour, eradicating forced labour, and promoting safe and fair working conditions, including maternity protection. By contrast, the WTO (World Trade Organisation) deals with trade rules and disputes, not labour standards. This distinction is essential in procurement, as professionals must understand which bodies regulate trade versus labour practices.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.249
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Question 33

Which ONE of the following best exemplifies a competitive advantage?

Correct Answer: C
Choice C- This option represents a competitive advantage. Faster delivery and better accessibility can enhance customer satisfaction and loyalty, leading to increased sales. Therefore C is the correct answer.
Incorrect answer:
Choice A- Reputation is not a competitive advantage. However, if a business does something very well then it may gain a strong reputation giving it a competitive advantage.
Choice B- This strategy is not a sustainable competitive advantage. While it may attract customers in the short term, it can lead to price wars and does not provide a long-term benefit. Eventually, competitors may match or undercut those prices, resulting in no lasting advantage.
Choice D- Employee Uniforms do not contribute to competitive advantage. They may enhance brand image or create a professional appearance but do not offer a distinct advantage that impacts costs or product attractiveness directly. Employee Uniforms mainly serve a functional role without directly impacting competitive strategies.
Reference:
LO-1.2; Page 62-63; Competitive advantage through global sourcing
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Question 34

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?

Correct Answer: B
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
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Question 35

Ruben is buying new machinery for his factory. He chooses a more expensive option after considering ESG factors. Why might this be?

Correct Answer: C
Comprehensive and Detailed Explanation From Exact Extract of Documents:
Procurement often considers Whole Life Cycle Costing (WLCC) rather than upfront cost alone. The L5M5 study guide (p.7) explains that while a product may be more expensive initially, it may be cheaper in the long term due to lower maintenance costs, greater durability, and reduced energy use. This approach supports sustainability by balancing financial and environmental impacts. Options A, B, and D cannot be assumed from the scenario since no evidence supports them. WLCC ensures procurement delivers long-term value, aligning with sustainability goals.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.7
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