L5M5 Lab Questions | New L5M5 Real Exam
L5M5 Lab Questions | New L5M5 Real Exam
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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q114-Q119):
NEW QUESTION # 114
A multinational engineering firm operates across multiple countries and has publicly committed to diversity and inclusion. However, an independent audit uncovers systemic issues:
1. Women with equal qualifications as men are consistently paid less for similar roles across all branches.
2. In the firm's regional office in Country X, minority ethnic applicants are frequently rejected for managerial roles without valid justification.
3. Employees with disabilities in Country Y are disproportionately placed in lower-growth roles, despite having skills for higher positions.
When questioned, leadership attributes these disparities to "cultural differences" and "regional norms." Which key labor rights issue does this scenario illustrate, and what actions should the company prioritize?
- A. Freedom of association and collective bargaining; the company should allow workers to unionize and address these disparities through collective agreements
- B. Abolition of child labor; the company should ensure that all employees meet the legal working age
- C. Elimination of discrimination in respect of employment and occupation; the company should implement a comprehensive diversity policy and actively monitor pay equity and equal opportunities
- D. Elimination of forced labor; the company should focus on ensuring no workers are coerced into taking undesirable roles
Answer: C
Explanation:
Option B- The scenario highlights discriminatory practices in pay disparities based on gender, hiring biases against minority ethnic groups, exclusionary treatment of employees with disabilities. The ILO's principle of eliminating discrimination in respect of employment and occupation requires companies to ensure equal treatment in hiring, pay, and opportunities, regardless of gender, ethnicity, or disability. The company's justification of "cultural differences" and "regional norms" does not absolve it of its responsibility to adhere to international labor standards.
Incorrect answer:
Option A- There is no evidence of coercion or lack of consent in employment.
Option C- The scenario does not mention issues related to unionization or collective bargaining.
Option D- No mention of underage workers is made in the scenario.
Reference:
LO-3.1; Page 253-254; Standards set by the United Nations (UN) and the International Labor Organization (ILO)
NEW QUESTION # 115
In an effort to enhance sustainability and ethical business practices, four companies have embedded Environmental, Social, and Governance (ESG) performance measures into their supplier agreements. Each organization has identified specific ESG challenges and established contractual requirements that suppliers must meet to align with corporate sustainability objectives.
Below is an overview of the ESG priorities for each company and the corresponding contractual terms:
Company 1:
This company has pledged to cut its carbon footprint by 40% by 2030. To achieve this target, it mandates that its suppliers actively contribute to emission reduction efforts. Suppliers are required to meet defined, measurable benchmarks related to carbon emissions and submit periodic reports detailing their progress on sustainability initiatives.
Company 2:
With a strong emphasis on fostering fairness and inclusivity, this company requires suppliers to align their payment structures and financial strategies with its commitment to equity. Suppliers must implement fair compensation policies, ensure timely salary disbursements via banking channels, and adopt ethical pricing structures that support inclusive hiring practices, particularly for underrepresented groups.
Company 3
Operating in industries prone to unethical practices, this company enforces stringent anti-corruption policies and financial transparency requirements for its suppliers. Suppliers must copyright rigorous governance standards, establish transparent reporting mechanisms, and comply with all anti-corruption regulations to ensure ethical business operations.
Company 4
This company is committed to making a meaningful impact on the communities in which its suppliers operate. As part of its contractual obligations, suppliers must actively participate in local initiatives that drive social and economic development. This includes contributing to community projects, generating employment opportunities, and supporting social welfare programs.
The four companies must establish contractual terms aligned with their respective ESG considerations, including a Community Benefit Clause, Key Performance Indicators (KPIs), Commercial Clause, and Governance Clause.
Match Column A with Column B from the following table:
- A. Equality, Diversity, and Inclusion (EDI): Commercial Clause
- B. Carbon Emissions: KPI as Performance Measure
Answer: A,B
Explanation:
Company 1: Carbon Emissions + KPI as a Performance Measure To achieve its goal of reducing carbon emissions, the company mandates that suppliers meet specific sustainability targets. By incorporating Key Performance Indicators (KPIs) into contracts, progress becomes measurable, ensuring accountability and continuous improvement in environmental performance. Company 2: Equality, Diversity, and Inclusion (EDI) + Commercial Clause The company's commitment to inclusivity is reinforced through a Commercial Clause, requiring suppliers to align financial practices with ethical standards. This includes fair payment structures, equitable pricing models, and hiring policies that support underrepresented groups, ensuring diversity and inclusion within the supply chain. Company 3: Governance + Governance Clause Operating in a high-risk industry, the company prioritizes governance and transparency by enforcing strict anti-corruption policies. The Governance Clause mandates adherence to ethical business practices, requiring suppliers to implement robust compliance frameworks, transparent financial reporting, and regulatory alignment. Company 4: Social Value + Community Benefit Clause The company's dedication to creating positive community impact is embedded within a Community Benefit Clause. This contractual requirement ensures that suppliers actively contribute to local social and economic development, participate in community projects, and provide employment opportunities, fostering long-term sustainability in the regions they operate.
NEW QUESTION # 116
A construction company contracts a supplier to deliver steel beams for a project, with the contract specifying that "time is of the essence," requiring delivery by January 31. However, due to unexpected delays, the supplier delivers the beams on February 5, causing project delays and financial losses for the construction company.
What is the most likely consequence of the supplier missing the deadline when "time is of the essence" is a contractual condition?
- A. The buyer can terminate the contract and seek damages for losses incurred
- B. The buyer must renegotiate the contract terms to account for the delay
- C. The supplier is entitled to an extension of the delivery deadline
- D. The buyer is required to accept the late delivery without penalty
Answer: A
Explanation:
Choice B- When "time is of the essence" is a condition in a contract, meeting the specified timeline is a critical obligation. A failure to meet the deadline constitutes a breach of contract, allowing the aggrieved party (the buyer) to terminate the contract and claim damages for any resulting losses. The other options are inconsistent with the legal consequences of this type of clause.
Incorrect answer:
Choice A- When "time is of the essence" is a condition, delivery by the specified date is critical. If the supplier fails to meet the deadline, the buyer is not obligated to accept the late delivery. Instead, they have the right to terminate the contract and potentially seek damages. Accepting late delivery would only occur if the buyer explicitly waives the "time is of the essence" clause.
Choice C- "Time is of the essence" leaves no room for flexibility in meeting deadlines unless the contract explicitly allows for extensions (e.g., due to force majeure or renegotiated terms). In this case, the supplier's delays, unless excused by the contract, result in a breach.
Choice D- The buyer is not obligated to renegotiate the contract when "time is of the essence" is breached. They have the legal right to terminate the contract and pursue remedies, including damages. Renegotiation would only occur if both parties voluntarily agree to modify the terms.
Reference:
LO-2.2; Page 189-190; Monitoring Contract Performance
NEW QUESTION # 117
Which of the following is NOT an element of a Fair Trade label?
- A. Minimum Price
- B. Long-term Relationships
- C. Marketing Incentives
- D. Traceability
Answer: C
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 # 118
As a procurement manager with a focus on sustainability, your objective is to develop KPIs that assess the environmental impact of your suppliers and demonstrate their commitment to eco-friendly practices. What key performance indicators would be most effective in measuring these impacts?
- A. The ratio of recycled materials used in production versus virgin materials
- B. The percentage of shipments that are damaged during transit
- C. The total number of products the supplier offers
- D. The average response time to customer complaints
Answer: A
Explanation:
Choice A- This KPI directly measures the supplier's commitment to sustainability and their environmental impact by indicating how much they are utilizing recycled resources compared to new materials. The other options do not effectively reflect environmental practices.
Incorrect answer:
Choice B- This KPI measures the breadth of the supplier's offerings but does not provide any insight into their environmental practices or sustainability. A supplier could offer many products without any of them being eco-friendly.
Choice C- While important for customer service and supplier responsiveness, this KPI does not relate to environmental impact. A fast response time does not necessarily mean that the supplier is following sustainable practices.
Choice D- This metric focuses on logistics and supply chain efficiency rather than environmental sustainability. Although reducing damaged shipments can have some indirect environmental benefits, it doesn't directly measure the supplier's environmental practices or commitment to sustainability.
Reference:
LO-1.1; Page 16; The role of environmental considerations in securing ethical and sustainable procurement and supply arrangements
NEW QUESTION # 119
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