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L4M4 Practice Exam Questions and Answers

Ethical and Responsible Sourcing

Last Update 20 hours ago
Total Questions : 180

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Question # 1

A buyer has been tasked with placing an order for steel from another country and using Incoterms for the delivery. The buyer's organisation has an in-house transportation and export clearance department. During negotiations, the buyer achieved a 25% cost reduction by accepting responsibility to arrange loading, transportation, and export clearance. Which Incoterm has been agreed?

Options:

A.  

CIP - Carriage and Insurance Paid

B.  

FOB - Free on Board

C.  

FCA - Free Carrier

D.  

EXW - Ex Works

Discussion 0
Question # 2

What is a risk of pre-warning a supplier that you will conduct an audit of their facilities?

Options:

A.  

they will not be able to make that time and date

B.  

they will not perform regular duties that day

C.  

they will not achieve KPIs

D.  

they may coach staff in what to say

Discussion 0
Question # 3

Which of the following financial ratios would indicate a supplier's potential exposure risk to a steeprise in inflation?

Options:

A.  

acid test

B.  

current ratio

C.  

gross profit margin

D.  

gearing ratio

Discussion 0
Question # 4

Which of the following can be interpreted as a normal business practice by some cultures but a form of bribery by others?

Options:

A.  

phishing

B.  

verbal contracts

C.  

golden handshake

D.  

facilitation payment

Discussion 0
Question # 5

Tracey Collum is a procurement professional and married to Nick Collum. Tracey has been leading a tender for a new radar system, where four suppliers have submitted their bids. After the bids were received, Nick joined one of the suppliers (Supplier X) as the project director for radar systems. Nick has asked Tracey to award the contract to Supplier X. What should Tracey do?

Options:

A.  

Award the contract to Supplier X because Nick will be promoted if Supplier X wins the contract

B.  

Award the contract to Supplier X because Tracey can ask for a better price because they are married

C.  

Ask to be removed from the tender due to a conflict of interest and complete a conflict of interest form

D.  

Remove Supplier X from the tender due to a conflict of interest and continue with the tender

Discussion 0
Question # 6

The sourcing process is considered to include the initial stages of the generic procurement cycle, up to the stage where the contract is awarded to the successful bidder. The stages in the sourcing process may include ...

Options:

A.  

Comparing the supplier’s delivery note with the purchase order to confirm the specification

B.  

Reminding the design manager to approve the drawings which will accompany the invitation to tender documents

C.  

Processing the requisitions to facilitate call-offs against a newly created framework contract

D.  

Engaging with suppliers to ensure that they are achieving the KPIs set in the contract

Discussion 0
Question # 7

Which of the following are remedial actions that may be undertaken by the purchasing organisation following a supplier audit? Select the TWO that apply.

Options:

A.  

Violating the terms of the supplier contract

B.  

Define specific corrective actions for the supplier

C.  

Daily brainstorming meetings with the supplier

D.  

Employing the supplier’s staff for job training

E.  

Running supplier development programmes

Discussion 0
Question # 8

What are the two main financial accounting statements of an organisation that show the values of assets and liabilities, and the profit earned in the period?

Options:

A.  

Cash flow statement (statement of cash flow) and balance sheet (statement of financial position)

B.  

Balance sheet (statement of financial position) and profit and loss account (statement of financial performance)

C.  

Profit and loss account (statement of financial performance) and chairman’s statement (in the annual report)

D.  

Cash flow statement (statement of cash flow) and profit and loss statement (statement of financial performance)

Discussion 0
Question # 9

Credit rating agencies can assist procurement professionals. Typically, which of the following can be obtained from a credit rating agency report? Select TWO that apply.

Options:

A.  

Product pricing information

B.  

Payment history

C.  

Financial stress score

D.  

Tender submission pricing

E.  

Rebate information

Discussion 0
Question # 10

As a procurement officer for a large organisation, a supplier approaches you on social media offering to take you out for dinner to discuss a recent open opportunity and mentions a financial reward if you help them win the business. You accept the invite. Was this the right thing to do?

Options:

A.  

Yes, you are free to do what you like outside of business hours

B.  

No, it is not appropriate to discuss open opportunities with one provider and not another

C.  

Yes, you are keen to see what is on offer as you are only on minimum wage currently and need extra money

D.  

No, but you will go for the dinner and see what they offer, because it is up to you to decide if you should accept

Discussion 0
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