L5M5 Exam Dumps - CIPS Level 5 Advanced Diploma in Procurement and Supply Questions and Answers

The L5M5 study guide highlights several tools procurement can use to embed ethics and sustainability into supply chains. These include benchmarking (A), which compares practices against best-in-class organisations; supply chain mapping (C), which provides visibility of all tiers of suppliers to identify risks; and on-site audits (D), which verify supplier compliance with ethical standards directly. Supplier preferencing (B) is a portfolio analysis tool used to understand suppliers’ perspectives, not specifically an ethical improvement tool. Cost analysis (E) is primarily financial and does not ensure ethical compliance. Procurement professionals must apply tools like mapping and audits to identify risks such as forced labour, environmental harm, or corruption.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, section on supplier evaluation and sustainability tools

The ILO Fundamental Principles of Human Rights apply to governments, as ILO conventions must be ratified and enforced at the national level. The L5M5 study guide (p.271) contrasts this with frameworks aimed at businesses: UN Global Compact (A), SA8000 (C), and OECD Guidelines for Multinational Enterprises (D). Governments are responsible for implementing and enforcing ILO standards, while businesses align with other voluntary or certification frameworks. Procurement professionals must understand which standards apply to suppliers and which are obligations for governments when working internationally.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.271

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Fraud risks in procurement typically include practices such as bid rigging (collusion to manipulate tenders), phantom suppliers (fake companies created to siphon money), and deliberate duplicate payments (processing false or repeated invoices). However, accepting presents is classified as bribery, not fraud. The L5M5 study guide (old p.139, new p.50) explains that fraud involves intentional deception for personal gain, while bribery relates to improper inducements or gifts. Procurement professionals must distinguish between fraud and bribery because both undermine ethical procurement but require different controls. For example, fraud prevention requires audit trails and segregation of duties, while anti-bribery policies require clear rules on gifts and hospitality.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, old p.139, new p.50

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

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

The L5M5 study guide (p.185) explains the distinction between regulatory documents. Guidelines are advisory documents providing best practice but are not legally binding. Regulations and statutes (A and C) are legally binding, and directives (B) are binding once incorporated into national legislation. Procurement professionals must be able to differentiate between binding legislation and advisory guidelines to ensure compliance. While guidelines help shape ethical practices, failure to follow them usually does not carry legal penalties.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.185

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

Employee resistance to ESG policies typically arises because they may require changes to existing practices and operations. The L5M5 study guide (p.6) notes that employees often resist change, particularly if it disrupts established ways of working. While reduced profits (A) or stakeholder returns (C) may concern senior executives, they are less relevant to employee resistance. ESG policies usually enhance reputation, not create negative publicity (D). Procurement professionals must manage change carefully by engaging employees and suppliers, ensuring they understand the long-term benefits of ESG practices.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.6

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