CIPS L5M5 Dumps

ISO14000 is the family of standards for environmental management, making it the most appropriate for CSR (Corporate Social Responsibility). The L5M5 study guide (p.211) states that ISO14001, in particular, sets requirements for organisations to establish environmental management systems (EMS). ISO9001 relates to quality management, ISO22000 to food safety, and ISO31000 to risk management. For procurement, ISO14000 certification provides assurance that suppliers follow recognised environmental practices, making it highly relevant to CSR and ESG goals.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.211

The Supply Chain Operations Reference (SCOR) model is a widely adopted framework for analysing and improving supply chain performance. According to the L5M5 study guide (p.149), advantages of SCOR include its universality across industries (A) and its ability to improve and communicate organisational decisions (C) by providing a common language and structure for supply chain processes. A limitation of SCOR is that it focuses primarily on internal processes and does not adequately capture wider external environmental or social factors (making option B incorrect). While SCOR can help identify cost-saving opportunities, it does not guarantee low costs (D). For procurement professionals, SCOR is an important tool for benchmarking performance and driving improvements in ethical supply chain management.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.149

Internal governance standards are the policies, procedures, and practices that guide how an organisation operates internally. According to the L5M5 study guide (p.313), updating a Standard Operating Procedure (SOP) is an example of strengthening internal governance. This ensures compliance, consistency, and risk management within an organisation’s operations. By contrast, achieving ISO 9001 (A) involves external certification, paying a living wage (C) relates to external social responsibility, and paying dividends (D) relates to shareholder rewards, not governance. Procurement professionals must understand governance frameworks because robust internal governance ensures compliance with ethical procurement standards and reduces risks of malpractice.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.313

The L5M5 study guide (p.33) outlines nine steps to creating a Sustainable Procurement Policy. The very first step is to identify who will take lead responsibility (C). This ensures accountability from the outset. Once a leader is appointed, the next steps include gathering information, drafting the policy, consulting with stakeholders, obtaining approval, and monitoring. Without clear leadership, policies risk being ineffective. Procurement professionals must ensure accountability and leadership to drive sustainability objectives effectively.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.33

The L5M5 study guide (p.48) defines corruption as the illegitimate use of one’s role or position for personal gain. This differs from bribery (A), which is offering or accepting inducements, and fraud (C), which involves deception such as falsifying records or creating phantom suppliers. Slavery (D) refers to forced labour. Procurement professionals must recognise corruption risks, particularly in international supply chains, and implement controls such as segregation of duties, audit trails, and whistleblowing policies.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.48

The Modern Slavery Act (2015) requires companies with a turnover above £36 million to publish a slavery and human trafficking statement. The L5M5 study guide (p.45) highlights this as a limitation because it excludes smaller businesses, even though they may also operate complex supply chains. The Act applies regardless of where supply chains are located (so A is incorrect), and compliance is mandatory (C is incorrect). Non-compliance can lead to civil proceedings (so D is incorrect). Procurement professionals must be aware of this threshold and ensure compliance in larger organisations.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.45

The L5M5 study guide (p.71) explains that the legitimate motive for Low-Cost Country Sourcing (LCCS) is reducing operational expenses by accessing cheaper materials, labour, or manufacturing. However, this must be conducted ethically, balancing cost savings with environmental, social, and legal responsibilities. Options A and B reflect unethical practices, while C is irrelevant. Procurement professionals must carefully evaluate suppliers in low-cost countries to ensure compliance with ethical standards such as labour rights, environmental protection, and anti-bribery legislation. LCCS can create value but must not compromise sustainability or governance.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.71

The L5M5 study guide (p.210) specifies that independent auditors must be approved by a certified body (B) and have sector-specific knowledge (C) to assess compliance effectively. While qualifications (D) may be desirable, there is no universal "auditor qualification," and experience (A) varies by sector. CIPS also stresses the importance of auditor qualities such as independence, objectivity, and integrity. For procurement, selecting the right auditor ensures credible, reliable assurance of supplier compliance with ethical and sustainability requirements.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.210

The International Labour Organisation (ILO) has defined core labour standards. According to the L5M5 study guide (old p.60, new p.88), these include freedom of association (A) and payment of a living wage (B). Other standards include the right to unionise, elimination of forced labour, and restriction of child labour. Equal opportunities (C) and protection from job insecurity (D) are important labour rights but not classified as core ILO standards. Procurement professionals must ensure suppliers comply with these standards to avoid reputational, legal, and operational risks.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.88

A monopsony exists when there is only one buyer in a market but multiple sellers. For example, in the defence industry, a government may be the sole buyer of military equipment such as submarines. This contrasts with a monopoly, where only one seller dominates the market. The L5M5 study guide (p.127) explains that monopsony can create power imbalances, as the buyer holds significant leverage over suppliers, potentially leading to unfair contract terms. Ethical procurement requires recognising such risks and ensuring that dominant buyers do not exploit suppliers unfairly.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.127

The UN Global Compact is based on ten principles derived from UN declarations. According to the L5M5 study guide (p.249), the areas covered are: human rights (A), labour standards, environment (B), and anti-corruption (C). "Racism" (D) is not listed specifically; instead, the Compact addresses non-discrimination as part of labour rights. "Minimum wage" (E) is not a universal standard in the Compact, though labour standards cover fair conditions of work. Procurement professionals should align supply strategies with these principles to support global sustainability and ethical practice.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.249

Bribery involves offering something of value to influence decision-making improperly. According to the L5M5 study guide (p.47), inviting a buyer to play golf during a tender (A) and donating to a politician to influence voting (B) are clear examples of bribery. A Christmas gift (C) may sometimes be considered borderline depending on company policies, but it is generally not categorised as bribery unless intended to influence. Paying invoices early (D) is not bribery. Procurement professionals must comply with anti-bribery policies and legislation such as the UK Bribery Act to maintain integrity.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.47

SA8000 is a globally recognised certification standard for Social Accountability. The L5M5 study guide (p.264) confirms that it measures compliance with ethical labour practices such as child labour elimination, safe working conditions, fair wages, and working hours. It does not cover quality (A), environmental management (B), or risk management (C). For procurement professionals, SA8000 provides assurance that suppliers operate ethically, helping organisations meet CSR/ESG commitments across supply chains.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.264

The L5M5 study guide (p.258) explains that blue washing refers to organisations associating with the UN Global Compact to appear legitimate while failing to implement its principles. The term comes from the blue colour of the UN flag. In contrast, greenwashing (A) is when companies exaggerate their environmental credentials. Blue washing is a reputational risk because it undermines genuine CSR initiatives and public trust. Procurement professionals must ensure that CSR commitments are backed by verifiable actions rather than symbolic gestures.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.258

Adjudication is a formal ADR method, widely used in construction and supply disputes. The L5M5 study guide (p.237) outlines its key features: it is designed to be faster than court proceedings and legally requires that a decision is reached within 28 days of referral. Decisions made can also be legally binding. Contrary to option A, adjudication is not informal; it follows structured legal processes. Option D is also incorrect, as adjudicator decisions may carry binding authority unless overturned later in arbitration or litigation. The process ensures disputes are resolved promptly, preventing long project delays.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.237

ISO14001 is the international standard for Environmental Management Systems (EMS). The L5M5 study guide (p.277) explains that it requires organisations to establish frameworks for monitoring and improving their environmental impact. ISO9001 (A) relates to quality management, ISO28000 (C) to supply chain security, and ISO31000 (D) to risk management. For procurement, suppliers certified with ISO14001 demonstrate a commitment to reducing waste, emissions, and environmental risks, making this highly relevant to CSR and ESG.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.277

A competitive advantage is something that makes one organisation more attractive than its competitors. The L5M5 study guide (p.62) highlights reduced lead times as a clear competitive advantage because customers value speed, reliability, and efficiency in delivery. While high profit margins (B) and ROI (C) are outcomes of strong performance, they do not necessarily attract customers. Brand reputation (D) is important but is considered a broader intangible asset rather than a direct competitive advantage in procurement. Reduced lead times demonstrate operational excellence, helping procurement gain a strategic edge in the marketplace.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.62

The practice described is known as Direct Trade. Unlike Fair Trade, which follows certification standards set by external bodies, Direct Trade involves companies directly sourcing from producers, often providing higher prices and more investment in local communities. The L5M5 study guide (p.309) explains that Direct Trade is particularly common in coffee and cocoa supply chains, where companies wish to build stronger, transparent, and ethical relationships with producers. It differs from Fair Trade in that it avoids third-party certification costs and focuses on building trust through long-term partnerships. Procurement professionals must understand both models when sourcing ethically in international markets.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.309

While LCCS can reduce costs, it also presents risks. The L5M5 study guide (p.72) identifies disadvantages such as inventory risks (C) from longer lead times, different laws and regulations (D) creating compliance challenges, and currency fluctuations (E) impacting costs unpredictably. Low infrastructure costs (A) and scalability of production (B) are advantages, not disadvantages. Procurement professionals must weigh cost savings against these risks and implement mitigation strategies such as dual sourcing and currency hedging.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.72

The Deming Cycle (also known as the PDCA cycle) is a continuous improvement model. The correct sequence is: Plan, Do, Check, Act. According to the L5M5 study guide (p.276), it is used within ISO14001 and other management systems to improve processes iteratively. "Plan" involves identifying improvements, "Do" implements them, "Check" monitors results, and "Act" standardises successful changes. Procurement professionals apply this cycle in supplier management and sustainability programmes to ensure continuous improvement.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.276

Expert Determination is a dispute resolution process in which parties appoint an independent expert to decide on a technical matter. According to the L5M5 study guide (p.236), this method is best for disputes involving specialist knowledge, such as intellectual property, chemical formulas, or engineering specifications. The expert’s decision is legally binding. It is not chosen based on contract value (A), geographic scope (B), or interpersonal disputes (D). Procurement professionals should recognise Expert Determination as an efficient way to resolve highly technical disputes without lengthy litigation.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.236

The role of an International Procurement Organisation (IPO) is to provide sourcing intelligence to companies operating globally. The L5M5 study guide (p.66) explains that IPOs identify the most cost-effective manufacturers worldwide, enabling buyers to reduce operational expenses and increase efficiency. They do not force organisations to relocate operations (A), nor are they primarily focused on logistics (C). While due diligence may be part of supplier selection, running background checks (D) is not the main purpose of an IPO. In practice, IPOs support centralised sourcing strategies and leverage international supplier markets to achieve best value.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.66

Social Security in the UK provides benefits such as sick pay, redundancy support, pensions, and maternity/paternity payments. The L5M5 study guide (p.93) specifies that payments can be made in cases of sickness (A), loss of employment (B), and retirement (C). Benefits are not provided simply for changing jobs (D) or marriage (E), as these do not affect financial or employment security. Procurement professionals need to understand social security systems, especially when working with international suppliers, since welfare provisions differ globally and affect labour conditions.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.93

The economic pillar of the Triple Bottom Line refers to the creation of financial value while maintaining responsibility toward stakeholders. The L5M5 study guide (p.179) explains that sustainability in procurement is not only about compliance with social and environmental standards but also about ensuring financial viability. Activities such as delivering shareholder returns, managing costs, and achieving long-term profitability fall under the economic dimension. "Legal" is not one of the TBL pillars, and while law supports governance, it is not itself a sustainability principle. Therefore, creating value for shareholders through responsible economic performance is clearly categorised under the economic aspect of TBL.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.179

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

The L5M5 study guide (old p.93, new p.114) makes a clear distinction between demand forecasting and supply forecasting. The statement given in the question is actually a definition of demand forecasting, not supply forecasting. Supply forecasting is focused on gathering data about current suppliers and external trends that may impact availability of goods and services. This can include political issues, natural disasters, or supplier financial stability. Option D instead refers to price forecasting, which is another distinct activity. Procurement professionals use supply forecasting to assess risks, build resilience, and anticipate potential disruptions in supply markets.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.114