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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions:

1. McKesson is a leading healthcare company specializing in wholesale medical supplies and equipment, pharmaceutical distribution, and healthcare technology solutions. Recently, public hospitals placed an urgent request for medical supplies. Which of the following is NOT a method for identifying urgent orders?

A) Assess supply chain capability
B) Develop a standardized order policy to manage urgent requests, including appropriate cost allocation
C) Establish economic order quantities (EOQ) based on profit margins
D) Identify strategically important customers and leverage goodwill for commercial renegotiations

2. Which of the following actions could create a conflict between profitability and social value among stakeholders?

A) Implementing environmentally sustainable practices
B) Offering competitive prices to customers
C) Cutting costs by reducing employee wages
D) Engaging in corporate social responsibility initiatives

3. Which of the following best defines the concept of total landed costs?

A) The difference between the product and logistics related cost
B) The sum of all logistics cost related to a product
C) The lowest logistics cost of a product
D) The sum of all product and logistics related cost

4. 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 is required to accept the late delivery without penalty
C) The supplier is entitled to an extension of the delivery deadline
D) The buyer must renegotiate the contract terms to account for the delay

5. Why is it important for an organization to regularly review and update its internal governance standards? Select any TWO.

A) To increase the number of suppliers bidding on contracts
B) To reduce employee turnover by offering higher salaries
C) To adapt to changes in industry best practices and stakeholder expectations
D) To ensure compliance with evolving legal and regulatory requirements

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