CIPS L4M4 Ethical and Responsible Sourcing Exam Practice Test

Under EU Public Procurement rules, the permissible procurement procedures include the Open Procedure and the Restricted Procedure. The Open Procedure allows any interested party to submit a tender, while the Restricted Procedure involves a two-stage process where only selected candidates are invited to submit tenders. These procedures are designed to ensure transparency, competition, and equal treatment in public procurement.

Exact Extract from Study Guide:

"The EU Public Procurement Directive outlines several procedures including Open Procedure and Restricted Procedure, which are designed to facilitate fair and transparent procurement processes."

Explanation

Weighted points systems can be time consuming to create. They're very transparent and allow for objective grading of supplier bids (so these answers are incorrect). They are not easy to manipulate and this is an advantage of using them.

The EXW (Ex Works) term means the seller’s responsibility ends once goods are made available at their premises. The buyer must take on costs and risks from that point, including loading, transport, and export clearance. Because the seller is not responsible for logistics, the quoted price is lower. In contrast, FCA includes delivery to a carrier, FOB covers loading onto a vessel, and CIP includes carriage and insurance arranged by the seller. By accepting these responsibilities, the buyer leveraged cost savings, demonstrating knowledge of Incoterms and alignment with efficient sourcing practices.

Explanation

weighted points systems for assessments should add up to 100. This is 100%.

An example is how this would work is

Price = 50%

Health and Safety questions= 30%

Qualifications = 20%

The balance sheet and profit and loss account provide a comprehensive view of an organisation’s financial health, showing assets, liabilities, and profits. These statements are essential in evaluating a supplier’s financial capacity, aligning with responsible sourcing practices for financial stability.

Explanation

The best way to deal with potential Conflicts of Interest is to openly declare these. Just because you have a relationship with someone doesn't mean this is going to be an issue or lead to fraud, but it is a good idea to keep a written record of these.

It wouldn't be a risk register, because how can you rate someone's risk of doing something dodgy? Risk registers are for objective risks such as Health and Safety.

Transparency International provides the Corruption Perceptions Index, which ranks countries based on perceived levels of public sector corruption, offering valuable insights into the anti-bribery risks of a specific country. Additionally, understanding the local anti-corruption legislation helps the buyer assess the legal framework and enforcement mechanisms in place, which is crucial when entering into contracts with suppliers in new jurisdictions.

Exact Extract from Study Guide:

"Transparency International’s Corruption Perceptions Index is a key resource for assessing the risk of corruption in different countries. Local anti-corruption legislation provides the legal context within which suppliers operate, and understanding these laws is essential for ensuring compliance and ethical sourcing."

Explanation

Cleaning and Facilities Management are the most appropriate items to outsource. They would not outsource the making of confectionary products as this is the 'core' business.

See p.4 for "what is outsourcing?"

Explanation

Completing Due Diligence checks will help guard against concerns about unethical business practices.

Not all companies will have a published Anti-Slavery policy- this is only required for large companies.

Known suppliers might have issues that you don't know about so you should always do due-diligence checks on everyone you work with

Formal tenders won't sort out ethical issues unless specifically addressed within the tender and strong contract management is put in place afterwards.

An ATA Carnet is an international customs document that allows temporary duty-free movement of goods for exhibitions, trade fairs, or professional use. It is not a certificate of origin, which proves where goods are manufactured, nor is it insurance. Carnets reduce administrative barriers and duties for temporary imports/exports. Responsible sourcing requires buyers to understand the correct use of trade documents to ensure compliance and avoid penalties, while distinguishing between documents that confirm origin, provide insurance, or facilitate temporary movement.

Incorporating ESG requirements into contractual terms is a valid and increasingly common approach. It ensures that suppliers are contractually obligated to adhere to specific environmental, social, and governance standards, aligning with the buyer's commitment to responsible sourcing. This practice not only promotes ethical behavior but also mitigates risks associated with non-compliance, such as reputational damage or legal penalties.

Exact Extract from Study Guide:

"This unit focuses on responsible procurement practices, ensuring that sourcing decisions align with legal, environmental, and social governance (ESG) principles."

Engaging with business managers while making sourcing recommendations ensures that the buyer considers multiple perspectives, reducing potential biases and improving decision-making. This approach aligns with ethical sourcing practices by promoting collaboration and transparency in tender decisions.

Explanation

Phishing is a type of fraud where IT users are sent a link (usually by email) which exposes them to activities of expert cybercriminals.

Outsourcing critical functions like cybersecurity can lead to a loss of in-house expertise, which is a strategic cost. This loss may impact the organization's ability to respond swiftly to security threats, innovate, and maintain control over sensitive operations. Retaining core competencies is vital for sustaining competitive advantage and ensuring long-term resilience.

Exact Extract from Study Guide:

"Outsourcing core activities risks – loss of in-house skill, loss of key staff to competitors, risk that supplier cannot be found, loss of control over operating activities, risk of loss of control over confidential information/IP.

Single sourcing can be appropriate when set-up costs are high, making it impractical to involve multiple suppliers. This aligns with responsible sourcing principles, particularly for high-value or specialised items, where relationship management and collaboration with one supplier can enhance quality and efficiency.

Governance of ethical and sustainable behaviours involves monitoring risk coverage and transparency measures. Reviewing insurance clauses (1) ensures suppliers are prepared to cover liabilities responsibly. Checking conflict of interest registers (3) promotes transparency, reducing risks of corruption or unfair influence. Simply reviewing NDAs (4) or updated policies (2) does not provide direct assurance of ethical and sustainable practices. Responsible sourcing requires robust governance mechanisms that ensure supplier compliance, reduce risk, and maintain ethical integrity across the supply chain.

Explanation

You should investigate automatically low tenders by clarifying the bid with the supplier. It could be they have misunderstood the requirement. Or the bid could be genuine and they can really provide best value for money. But without enquiring, you just don't know.

Explanation

Plastic is not a commodity. A commodity is something that is naturally occurring and plastic is manufactured. The other category of commodity is agriculture.

Explanation

you would use a restricted approach when interest is likely to be high. The buyer needs a method of de-selecting unsuitable bidders and creating a shortlist of acceptable organisations.

For complex requirements you could use both an open or restrictive tender- the difference between the approaches is about how many bids you're likely to get rather than the complexity of it.

Explanation

An ITT would include details on the awarding body (usually a brief overview of the buyer), the deadline (bids must be received by a certain date) and qualifications required (such as ISO requirements or competency certificates of staff members if it's a service contract). You wouldn't find pricing schedules in an ITT (this would be provided by the supplier in response to the ITT), nor would you find risk assessments (a supplier might be asked to provide one as part of the quality assessment of the tender though).

Invitation To Tender Simply Explained I Thornton & Lowe (thorntonandlowe.com)

Protectionist measures are policies implemented by governments to protect domestic industries from foreign competition. One common protectionist measure is the imposition of import duties, which are taxes levied on imported goods. These duties make imported products more expensive, encouraging consumers to buy domestic products instead. Buyers sourcing internationally must be aware of such duties as they directly impact the total cost of procurement.

Exact Extract from Study Guide:

"Furthermore, there are many potential cost considerations when importing goods which can include taxes & duties or storage costs. By understanding all key legal, regulatory and organizational requirements prior to sourcing from international suppliers, businesses can ensure compliance while also maximizing cost savings."

Public sector procurement is bound by transparency, fairness, and value-for-money principles. Once minimum thresholds are met, evaluation must be based on pre-published weighted criteria (often combining price, quality, sustainability, and social value). Sole reliance on price or location would breach fairness and equal treatment obligations. Weighted scoring ensures that decisions are objective, defendable, and aligned with responsible sourcing principles. This also allows ethical and sustainability considerations to be formally scored alongside commercial ones, reinforcing good governance.

Explanation

Eamon should use a cross-functional team (this rules out two of the options). The purpose of using a cross-functional team is to use the knowledge of people from other departments as they may better understand the service required and help assess any technical questions. Therefore a cross-functional team of procurement personnel, isn't cross-functional (they're all the same function). Yoyos is a bit of a silly example, the exam questions are a little more serious- but the learning outcome is the same; use a cross-functional team to evaluate bids.

Explanation

Request for Quotations can include more details than just prices. They can include specs and technical drawings and samples. It's like saying 'we can give you this price with these conditions'.

The other no answer is wrong because RfQ don't always include samples. A sample wouldn't be possible for a quote for an IT consultancy piece of work.

Explanation

Ex-Works has the lowest risk to the supplier- in Exworks the buyer collects the items directly from the supplier - so they have all the issues and risks of transporting it back home.

There are many question on Incoterms CIPS can ask. But as there's such a huge bank of questions it's really hit or miss if you'll get one of those question. Two students sitting the exam at the same time in the same study centre can get different question sets. One person can get 3 Incoterm questions and the other gets 0.

I would learn the major ones- the ones at the ends of the table in particular because these are the ones question are likely to be about. Ex works / Free carrier and Delivered at Place Unloaded/ De-livered Duty Paid in particular.

I like this graph as I'm a visual person. I think it makes it easier to understand than the study guide:

Shipping Incoterms: the Complete Guide - Guided Imports

Explanation

Coercion is not a type of fraud. The other three are.

Modern slavery and human rights are social sustainability issues. Under the triple bottom line (environmental, social, economic), the social dimension covers labour rights, working conditions, equality, and compliance with modern slavery laws. Responsible sourcing requires buyers to integrate such social criteria in supplier prequalification to prevent unethical practices from entering supply chains. Environmental criteria cover impacts like carbon and waste; economic focuses on cost and competitiveness; quality addresses technical performance. Including modern slavery checks at the prequalification stage reflects due diligence and ensures alignment with legal and ethical obligations.

CIPS promotes a constructive and corrective approach when suppliers fall short of ethical standards, especially on critical issues like human rights. Immediately cutting ties can harm workers further and disrupt supply without addressing root causes. A responsible sourcing approach requires buyers to engage suppliers, escalate the concern, and establish a corrective action plan with monitoring to ensure compliance. Only if the supplier refuses to act or breaches persist should termination occur. This supports continuous improvement, supplier development, and ethical due diligence, reflecting global standards such as the UN Guiding Principles on Business and Human Rights.

Supplier selection is about ensuring that suppliers are capable and suitable to meet the buyer’s requirements, including quality, reliability, and alignment with ethical standards. It also focuses on identifying, from a pool of pre-qualified suppliers, which supplier offers the best overall outcome. Financial stability and culture are considered earlier in pre-qualification, not during final selection. Similarly, “time-efficiency” in tender response is not a primary factor in supplier selection. Responsible sourcing emphasises due diligence, capability, and alignment with sustainability and ethical practices as part of selection decisions.

Explanation

The Pareto Principle can be used when considering changing a supplier. It helps to categories suppliers by how strategically important the item is that they provide to the business.

Explanation

A risk of pre-planning an audit is the supplier has time to prepare for it. It's a good thing in that they can get their paperwork in order but the downside is they can overprepare so you don't get a realis-tic representation of what they're doing. One way they can do this is coaching staff in what to say to the auditors.

Standards, such as ISO or BS norms, establish clear, universally recognised benchmarks for quality, safety, and performance. Including them in specifications reduces ambiguity, ensuring suppliers know exactly what is required and how compliance will be measured. They do not automatically guarantee lowest pricing or cover all unique buyer requirements. Instead, they improve comparability, fairness, and governance in tendering. Responsible sourcing emphasises use of recognised standards to ensure safety, ethical compliance, and consistent quality, particularly in sensitive categories like healthcare, where patient safety and continuity of service are paramount.

An Invitation to Tender (ITT) is used when requirements are complex, high-value, or strategic, requiring detailed supplier submissions, robust evaluation, and structured governance. RFQs are better for low-value, straightforward purchases where price is the main factor. ITTs ensure fairness, transparency, and comprehensive evaluation when the stakes are high. It is not chosen simply because of oligopolies or time pressure. Responsible sourcing requires matching the sourcing process to the complexity and risk of the procurement, ensuring appropriate competition and governance.

In commodity markets, shortages combined with sustained demand drive price increases. The buyer loses bargaining power, as suppliers can charge higher rates. Negotiating downward is unrealistic; instead, buyers should manage risk through hedging, forward contracts, or alternative sourcing. CIPS notes that responsible sourcing requires understanding market dynamics and their ethical implications (e.g., food security, affordability). The organisation must manage stakeholder expectations about pricing rather than assume negotiation leverage. This reflects the implications of market volatility in global supply chains.

Explanation

The correct answer is 'yes- the public sector should advertise as a call for competition'. They do this in the Official Journal of the European Union (OJEU). Public Sector has to be transparent abouteverything and treat all suppliers equally. So they can't just approach the ones they like.

In the study guide it says OIEU and this is a typo. It's OJEU.

What is The OJEU in 2 minutes or less (trackerintelligence.com)

Response times should be tailored to the complexity of the tender. Responsible sourcing encourages flexibility in setting realistic timelines that allow suppliers adequate time to prepare, supporting efficient and effective sourcing without unnecessary delays.

An Invitation to Tender (ITT) is typically used for complex, high-value procurements where the quality and specific features of the goods or services are of paramount importance. This approach ensures that ethical and responsible sourcing criteria are met, aligning with best practices in procuring specialised goods or services.

Where price leverage is limited, buyers should seek value-adds: extended warranties, service levels, training, spares, delivery schedules, sustainability commitments, or risk-sharing. This aligns with total value and ethical outcomes beyond headline price.

Explanation

The correct answer is 'the supplier is able to work at the same technical level as the buyer'. It's about being able to integrate the businesses together in terms of IT systems and such like.

Explanation

cash in advance is the most beneficial to a supplier.

Open account /credit account is the most beneficial to the buyer. Learn this as it's a known exam topic.

Tariffs/import duties increase the landed cost of imports, which shields domestic producers by making foreign alternatives relatively more expensive. They do not go to the foreign supplier and typically do not lower consumer prices.

Liquidity ratios (e.g., current ratio, quick ratio) measure whether a company can cover short-term debts with liquid assets like cash, receivables, and inventory. These ratios provide insight into a supplier’s ability to remain operational without defaulting on immediate obligations. Profitability ratios show long-term returns; EPS and dividends per share apply to shareholders, not supply continuity. Responsible sourcing emphasises liquidity as a key measure of supplier stability, as poor liquidity can cause supply interruptions or business failure, jeopardising contracts and buyer obligations.

Explanation

Continuity of supply for the buying organisation is an advantage of TUPE regulations.

TUPE is the Transfer of Undertakings (Protection of Employment). It's when the workforce / em-ployees of one company go to work for another one, usually after their company is bought out. They're transferred to the new company along with the furniture and buildings.

TUPE is UK specific. You don't need to know too much details about it for this exam - just what it is and the benefits. The main benefit is people don't lose their jobs when their company gets bought out. Basic guide to TUPE (pinsentmasons.com)

Explanation

When single sourcing, you should aim to have a collaborative relationship with the supplier. They're the only ones who provide you with glass, which is a vital part of windows. So you need to make sure you have a good relationship with them and work with them to overcome any issues such as supply chain disruptions. If not- you've got no windows to sell!

CIPS members who adhere to the CIPS Code of Conduct gain insight into ethical business practices and retain their membership and access to CIPS resources. This commitment to ethical standards supports responsible sourcing by fostering a community of professionals who value integrity and best practices.

Explanation

A Category spend is high value and strategic suppliers. C category is low value, high volume of spend aka tail spend. The bits in the middle are B category.

For example when you have a baby you have to buy lots of stuff for it. Your A spend is the big, important and expensive purchases like the pram, cot, carseat. You spend a lot of time in this category because they're important purchases you want to get right. The Tail Spend / C are all thelittle bits like nappies, baby shampoo, sippy cups. The B category are the bits in between - the purchases are kinda important but aren't as strategic or important as A category. Toys may fall into this category.

Explanation

the correct answer is 'no- the public sector can choose not to publish information if it is not deemed to be in the public interest'.

They use something called the 'public interest test' to determine if the information should be re-leased or not. For example they may not respond to a request asking how many bullets the UK Army has in storage, as that would be detrimental to national security interests.

Responses to requests are made within 21 days, not 28.

In cases where price differentiation is minimal, negotiating on added-value services like after-sales support can offer additional benefits. This aligns with responsible sourcing by focusing on long-term value and fostering a cooperative relationship with the supplier.

Explanation

The correct answer is the CIPS Code of Conduct. This is a voluntary document about doing 'good procurement' i.e. treating suppliers with respect.

EU Procurement Directive is legislation, so isn't voluntary

ISO9001 is about quality management

ILO is an organisation rather than a document

Outsourcing can create risks such as loss of control over a project (1) since operations are managed externally, and loss of private information (4) if data security and confidentiality are not managed effectively. Loss of assets (2) typically refers to internal asset disposal, not outsourcing. Loss of future business opportunities (3) is more linked to strategic misalignment, not a core outsourcing risk. Responsible sourcing emphasises that outsourcing should include robust governance, contractual protections, and supplier monitoring to manage risks of data leakage, reduced oversight, and potential ethical breaches.

Incorporating recognized standards into procurement specifications provides clear guidelines for suppliers, reducing ambiguity and ensuring that products or services meet predefined quality and safety criteria. This is particularly important in sectors like healthcare, where equipment must adhere to strict standards to ensure patient safety and operational efficiency.

Advertising in a local newspaper for urgent services like pest control may not be the most efficient approach. It can lead to an overwhelming number of responses, many of which may not meet the specific requirements, thereby delaying the evaluation process. For urgent needs, direct sourcing from pre-qualified suppliers or using existing frameworks is often more effective.

Defining corrective actions and running supplier development programs are effective remedial actions following an audit. These approaches support continuous improvement, aligning with responsible sourcing by helping suppliers meet ethical and performance standards.

Credit rating agencies assess an organisation’s financial stability and risk of default. Key data includes financial obligations (such as outstanding loans, debt levels, repayment schedules) and payment history (how reliably the firm pays creditors and suppliers). These indicators show liquidity, cash flow reliability, and debt servicing ability. Factors such as “value for money” or “ecosystems” are irrelevant in a financial risk context. Responsible sourcing requires buyers to consider supplier financial resilience, as instability could disrupt supply chains, increase risk exposure, and lead to reputational damage. Agencies like Moody’s, S&P, and Fitch provide independent assessments that complement in-house financial analysis.

When supplier audits reveal issues, buyers should implement constructive measures. Supplier development programmes (A) help improve performance through training, mentoring, and joint improvement initiatives. Corrective action plans (E) outline specific steps and timelines to address identified gaps. Options like hiring supplier staff or informal brainstorming do not provide structured improvements, while violating contracts would undermine governance. Responsible sourcing emphasises supplier engagement and continuous improvement, ensuring suppliers meet ethical, quality, and sustainability expectations rather than simply penalising them.

Explanation

The correct answer is current assets and current liabilities. There are many Questions about financial ratios on the exam.

If you're unsure on them I suggest doing further reading outside of the study guide as this will help. I like this youtube video (I'm not associated with the makers of this video but think it's a great way to explain liquidity) Liquidity ratios (youtube.com)

You can be asked to work out liquidity in the exam. If you are asked this, the numbers will be very simple to the point you may be able to do the sums in your head. There is also a calculator on the test app you can use.

The most effective way to demonstrate zero tolerance is by embedding a comprehensive anti-bribery framework: clear policies, mandatory staff and supplier training, reporting channels, and monitoring. Simply requesting suppliers’ policies or avoiding known offenders is reactive, not proactive. Requiring suppliers to read policies without internal enforcement lacks substance. CIPS highlights that robust governance structures, supported by recognised frameworks such as the UK Bribery Act or FCPA, reinforce organisational credibility, protect reputation, and ensure compliance. This builds trust across supply chains and ensures ethical standards are maintained.

Analysing expenditure data by product category or supplier enables procurement managers to:

Negotiate Better Prices:Identifying high-spend areas or suppliers can provide leverage in negotiations, leading to cost reductions.

Monitor Cost Trends:Tracking expenditure over time helps in understanding cost fluctuations, budgeting, and forecasting future spend.

Exact Extract from Study Guide:

"Spend analysis is a process that analyses the historical spend data of your organisation to provide answers to questions concerning spend visibility, compliance, and cost-saving opportunities."

Expenditure analysis by category/supplier enables buyers to track trends over time (A), supporting benchmarking and financial control. It also identifies opportunities for negotiation (C) by highlighting concentration of spend and potential leverage with suppliers. Marketing strategy, production scheduling, and stock disposal are outside procurement’s primary scope. Responsible sourcing relies on robust spend analysis to identify efficiency opportunities, reduce wasteful expenditure, and support supplier relationship management strategies, all while aligning with sustainability and compliance goals.

Incoterms, short for International Commercial Terms, were introduced by the International Chamber of Commerce (ICC) in 1936. These standardized terms are used globally to define the responsibilities of buyers and sellers in international trade, helping to avoid misunderstandings by clarifying tasks, costs, and risks involved in the delivery of goods.

Public sector procurement is governed by specific regulations that stipulate minimum timescales for various stages of the tendering process. These regulations are designed to ensure transparency, fairness, and adequate time for suppliers to prepare their bids. For instance, under the Procurement Act 2023, certain procedures have defined minimum periods for tender submissions to allow sufficient time for supplier participation.

Exact Extract from Study Guide:

"Public sector procurement is subject to specific regulations that dictate minimum timescales for tendering processes to ensure fairness and transparency."

Weighted points systems are appropriate for complex or high-value purchases where multiple factors (e.g., quality, sustainability, delivery) must be balanced. For simple, low-value purchases like pens, price is typically the only differentiating factor. Using a weighted points system would overcomplicate the process, wasting resources. Responsible sourcing requires proportionality — applying robust evaluation methods where justified, while keeping processes simple and efficient for routine purchases. This ensures efficiency without compromising governance, freeing procurement resources for strategic projects.

Explanation

The correct answer is bribery, corruption and the environment.

ESG stands for environmental and social governance. It's the new buzzword for CIPS and is basically everything to do with ethical procurement- so areas such as bribery and corruption are included as well as the environment.

Option 4 is incorrect as economic doesn't come into it.

A carnet (specifically an ATA Carnet) is a customs document that allows for the temporary duty-free and tax-free movement of goods across international borders. It is commonly used for exhibitions, fairs, and professional equipment but is not proof of origin. Proof of origin is instead provided by a certificate of origin or other trade documents. It is also not an insurance policy. Responsible sourcing requires buyers to distinguish between documents used for temporary movement (carnet), origin evidence (certificate of origin), and risk transfer (insurance). Correct understanding avoids compliance failures, delays, or unexpected costs in international trade.

Total Quality Management (TQM) practices and ISO 9001 certification are indicators of a supplier’s commitment to quality. Responsible sourcing evaluates these factors to ensure suppliers meet high-quality standards and continuous improvement expectations.

Incoterms are grouped as E (Ex Works), F (Free Carrier), C (Carriage Paid To), and D (Delivered Duty Paid), reflecting various stages of responsibility transfer between buyer and seller. Understanding Incoterms is critical for responsible sourcing, as it clarifies logistics and cost responsibilities.

Explanation

96 is the correct answer- weighted point systems should add up to 100 (as in 100%)

Explanation

The three pillars of sustainability are profit, people and planet. This may also be referred to as social, economic and environmental.

Explanation

Incoterms can replace lengthy contract clauses as they replace the need for contracts to detail which party is responsible for organising transport, paying duties, having the insurance etc.

Incoterms is an odd one for exam topics- some students say it was a huge part of their exam and there were many questions on this. Others said there were just one or two. Questions get randomly assigned from the bank so it's completely random how many you'll get on this topic.

Global shortages combined with steady or high demand create upward price pressure. This reduces the buyer’s bargaining power, making it difficult to negotiate lower prices. Instead, suppliers are justified in raising prices to reflect scarcity. Options A and C are contradictory to economic principles, while B ignores the impact of shortages on pricing. Responsible sourcing requires buyers to anticipate such conditions using market intelligence and mitigate risks through forward contracts, alternative sourcing, or hedging strategies, rather than relying on negotiation leverage during shortages.

Added value refers to benefits beyond basic price and compliance. Examples include suppliers proposing innovations or cost-reduction strategies in the supply chain (2) and sustainability commitments like reducing plastics and waste (3). Lowest price is part of baseline evaluation, not added value. Personal connections (4) are not a valid or ethical procurement criterion and could breach fairness. Responsible sourcing emphasises identifying suppliers who contribute to continuous improvement, sustainability, and efficiency beyond contractual minimums.

Responsible procurement and supply are governed by several key regulatory areas to ensure ethical and fair practices. These include:

Ethical Practice:Ensures that organisations conduct business in a manner that is ethical and free from corruption.

Data Protection:Involves safeguarding personal and sensitive information, ensuring compliance with laws such as the General Data Protection Regulation (GDPR).

Marketplace Competition:Ensures fair competition among businesses, preventing monopolies and promoting consumer choice.

These areas are critical in maintaining integrity, trust, and compliance within procurement activities.

Exact Extract from Study Guide:

"Key areas of regulation that organisations must follow include data protection, ethical practice, health, safety and environment, worker rights, marketplace competition, and product safety standards."

The acid test (quick ratio) is an effective measure of a supplier's ability to meet short-term liabilities, providing insights into financial stability. This aligns with responsible sourcing by ensuring the supplier is financially capable of fulfilling a strategic contract.

Explanation

the correct answer is 'Yes- a low gearing ratio means the company's finances are made up of equity rather than debt'.

Remember low gearing = good (based on equity), high gearing = bad (based on debt). Anything over 50% is considered high.

The two no answers are therefore incorrect and you can discount these straight away. The other yes answer is one of those answers which COULD be true, but isn't always true, and we'd need more information to know for sure. When you get options like this there will be one that is always right and one which is sometimes right - so always pick the always right one.

Dealing with supply chain disruptions is complex, and depending what the disruption is, how big it is, what the industry is etc determines whether a supplier can handle it or not. Because there's more factors to consider than just gearing, this isn't the right answer.

Explanation

ISO9001 is Quality Management so is therefore the correct answer. The other options can be used to appraise suppliers but do not link directly or fully to Quality Management.

A Bill of Lading is a critical shipping document in international trade, serving as a receipt for shipped goods and a contract between the shipper and carrier. It is essential for customs clearance and is recognized as a valid document for importing goods into the EU.

Exact Extract from Study Guide:

"The Bill of Lading (B/L) is a document issued by the shipping company to the operating shipper, which acknowledges that the goods have been received on board."

Restricted tendering involves filtering suppliers through a prequalification stage and then evaluating proposals. The selection focuses on ensuring suppliers have adequate production capacity and financial stability to deliver on requirements. These are critical to continuity, quality, and risk management. Decommissioning costs are not typically part of supplier selection, and total life cost is an award criterion considered later in evaluation. By checking production capacity and financial stability, buyers mitigate risks of underperformance or financial collapse. This approach aligns with responsible sourcing, where due diligence ensures suppliers can sustainably meet obligations.

Explanation

Carry out due diligence is the correct answer. The other answers are incorrect:

- ensure all 46 suppliers publish an Anti Slavery Statement in line with the Modern Slavery Act is wrong because the question states that some suppliers are international. The legislation is UK, meaning international suppliers don't have to do the statement. It also only applies to companies with a turnover of £36m, and some of Zeb's suppliers may be smaller than this.

- work with less suppliers to reduce the risk of slavery entering the supply chain is a silly answer be-cause Zeb probably needs all of his suppliers. There's probably a reason he uses that many.

- ask all suppliers to get Fair Trade accredited is also a silly answer. Fair Trade only exists in some industries such as cocoa and bananas. Zig Zag Zips is in manufacturing so it's probably not going to be able to fairtrade accredit some of the stuff it buys.

Providing a debrief allows suppliers to understand the tender process and learn areas of improvement, promoting transparency. This practice supports responsible sourcing by fostering a fair, competitive environment and encouraging suppliers to improve their future offerings.

The 35-day minimum applies to public sector procurement under EU/UK directives, not the private sector. In private procurement, response times should be proportional to the complexity and value of the requirement. Simple RFQs may require only a few days, while complex tenders involving technical submissions may justifiably need weeks. Responsible sourcing involves ensuring suppliers have fair opportunity to respond adequately, but without unnecessary delays that could affect business needs. Therefore, rigidly applying a fixed number of days in the private sector is neither necessary nor efficient.

Embedding ESG/ethical clauses and reporting in contracts is a key mechanism to implement responsible sourcing, set clear expectations, and enable monitoring and remedies. Suppliers can be held to contractual ESG obligations where these are defined and agreed.

Explanation

The correct answers are; motion, waiting and inventory.

This is part of Ohno's 8 Wastes. You can remember this with the acronym Tim Woods;transportation, inventory, motion, waiting, over-production, over-processing, defects, skills.

This is only mentioned briefly in this module but comes up in other modules more in depth, so is worth memorising if you can.

Explanation

The correct answers are; lead times, product competition and changes in the marketplace.

You wouldn't expect to receive samples or costings from a Request for Information - rather, these should be expected as part of the Tender Competition