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  2. CIPS Certification
  3. L5M5 Exam
  4. CIPS.L5M5.v2026-02-26.q77 Dumps
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Question 46

Progoti Motors, a Bangladeshi company, has purchased a new fleet of vehicles from Japan. Which TWO of the following would be included in the 'Total Landed Costs' of this purchase?

Correct Answer: B,C
According to the study guide, total landed cost includes the original product price, transportation costs, fees, customs and duty charges, currency exchange rates, and handling costs. Therefore, Choices B and C are correct. Landed costs typically do not include expenses unrelated to the production and sale of a single item or costs that are difficult to determine precisely. Choices A, D, and E fall into this category.
Reference:
LO-1.4; Page 107; Demand Management and the need for urgent orders
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Question 47

Which of the following is not considered to be an alternative form of dispute resolution?

Correct Answer: D
Comprehensive and Detailed Explanation From Exact Extract of Documents:
Alternative Dispute Resolution (ADR) mechanisms are encouraged in procurement as they save time, reduce costs, and preserve business relationships. The key ADR methods listed in the L5M5 study guide (p.188) include mediation, adjudication, and conciliation. These methods are designed as alternatives to litigation, which involves courts, legal judgments, and lengthy processes. Litigation is not an ADR method; it is the traditional approach, often more adversarial and costly. Procurement professionals are encouraged to adopt ADR whenever possible, as it helps maintain collaborative supplier relationships while resolving conflicts effectively.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, new edition p.188
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Question 48

Which of the following is a disadvantage of the ISO14001 standard?

Correct Answer: B
Comprehensive and Detailed Explanation From Exact Extract of Documents:
ISO14001 is an international standard for environmental management systems. According to the L5M5 study guide (p.277), one disadvantage is that ISO does not set environmental performance targets itself; instead, it requires organisations to define their own targets. This means some organisations may set very easy or minimal goals, limiting actual environmental improvement. Option A is incorrect as ISO14001 applies consistently across industries. Option C is a requirement, not a disadvantage. Option D is an overgeneralisation-while some firms misuse it for "greenwashing," many genuinely use it to improve sustainability.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.277
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Question 49

The Rampal Power Station, a 1320 MW coal-fired power plant, has recently faced accusations of poor health and safety standards in the workplace. Workers have reported being forced to work without safety masks, exposing them to air pollution. If Rampal Power Station fails to improve its health and safety standards, which of the following is the most likely primary consequence?

Correct Answer: B
Choice B - Loss of reputation and damage to brand is a primary consequence of poor safety standards in the workplace for the power plant.
Incorrect answer:
Choice A - This option suggests that poor health and safety standards might lead to a decrease in the quality of materials sourced. While safety issues can affect worker performance and productivity, they do not directly relate to the quality of materials acquired from suppliers. Poor health and safety standards are more likely to impact employee morale and retention rather than the procurement process.
Choice C -Environmental effect is an indirect consequence for Rampal power plant but more so to the locals living there and natural habitat. If health and safety standards are not improved, it could lead to environmental issues, but this would be a broader consequence rather than a primary one related to workplace conditions.
Choice D-Although in cases of workers injury or death, calculating insurance would be complex, as not all injury and health related costs are covered by insurance, like sick pay, lost time, fines etc. But this is more of a secondary internal challenge and not a primary consequence of the power plant.
Reference:
LO-1.3; Page 99-100; Health and safety standards
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Question 50

Why is it important for an organization to regularly review and update its internal governance standards? Select any TWO.

Correct Answer: A,C
Choice A - Laws and regulations frequently change, and failing to update governance standards can lead to non-compliance, resulting in legal penalties, reputational damage, or financial losses. Choice C - Governance standards must evolve to reflect new best practices and address stakeholder concerns, ensuring the organization remains competitive and aligned with societal values.
Incorrect answer:
Choice B - While employee retention is important, governance standards are not directly tied to salary adjustments. This option is unrelated to the governance review process.
Choice D- This is not a direct benefit of updating governance standards. Supplier engagement is more related to procurement strategies rather than internal governance.
Reference:
LO-3.3; Page 313-314; Importance of updating internal governance standards
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