Pass the CIPS Level 4 Diploma in Procurement and Supply L4M4 Questions and answers with Dumpstech

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.

Loss of control and loss of private information are significant risks in outsourcing. Responsible sourcing involves mitigating these risks by setting clear agreements, monitoring, and safeguarding sensitive information to maintain control over outsourced activities.

Explanation

Intracompany trading is when two departments in the same company do trading. AND when two companies owned by the same parent company do trading.

INTRA means 'within' - so it's doing business with yourself.

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.

Explanation

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

Addressing human rights issues collaboratively by developing an action plan allows for improvement and correction. This approach is consistent with ethical sourcing principles, which encourage responsible intervention to correct and improve supply chain practices rather than punitive measures that may not lead to long-term change.

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.

Competitive tendering is ideal for high-value contracts where technical expertise is essential. This method supports responsible sourcing by ensuring quality and aligning the supplier’s capabilities with the buyer’s needs, as required in more complex procurement scenarios.

Explanation

The correct answers are 'it is easy to drive down costs' (as you can pit the suppliers against each other) and 'low risk of failure to supply' (if one supplier can't provide what you need, the other supplier might be able to).

Economies of scale and supplier loyalty are advantages of single-sourcing.

There is a risk of failure to supply is a risk associated with single sourcing.

There's a useful table of advantages and disadvantages of single / multi sourcing on p.22. Types of sourcing is a key topic for the exam.

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated by dividing current assets by current liabilities. In this case:

Current Assets = $300

Current Liabilities = $150

Current Ratio = 300 ÷ 150 = 2.0

This indicates that the supplier has twice as many current assets as current liabilities, suggesting good short-term financial health.