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

1. McKesson is a leading healthcare company specializing in wholesale medical supplies and equipment, pharmaceutical distribution, and healthcare technology solutions. Recently, public hospitals placed an urgent request for medical supplies. Which of the following is NOT a method for identifying urgent orders?

A) Establish economic order quantities (EOQ) based on profit margins
B) Develop a standardized order policy to manage urgent requests, including appropriate cost allocation
C) Identify strategically important customers and leverage goodwill for commercial renegotiations
D) Assess supply chain capability

2. Westecs Inc., a leading consumer products manufacturer, has made significant investments in sustainable practices across its supply chains and in promotional advertising. Which of the following is the most likely benefit of this investment?

A) Increased number of competitors
B) Reduced indirect costs
C) Improved brand image
D) Unsatisfied shareholders

3. 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 with stable tax and tariff structures
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 where companies use Just in Time (JIT) method of SCM

4. Which of the following strategies can procurement professionals use to effectively manage language and cultural barriers in global sourcing?
1. Improving foreign language skills
2. Think and act with an open mind
3. Insisting that English is the only business language used
4. Ensuring proper documentation for all the imports to comply with regulations

A) 1 and 2
B) 2 and 4
C) 2 and 3
D) 4 and 1

5. GlobalPharm Ltd, a pharmaceutical company, has engaged a third-party auditor to assess its compliance with regulatory standards. During the audit, the company identifies potential risks. What is the most significant challenge GlobalPharm Ltd might face when working with a third-party auditor?

A) Lack of independence in the auditor's recommendations
B) Reduced decision-making authority within management
C) Reputational damage if non-compliance issues are exposed
D) Loss of operational control over manufacturing processes

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