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質問 # 73
A procurement manager of a medium-sized company has suggested to their executive board that implementing an ISO environmental standard would improve procurement practices and reduce environmental and social impacts. However, some colleagues are concerned about the potential complexity and supplier resistance. Should the company go ahead with the recommendation?
- A. Yes, as it would align with, and help to achieve, sustainability goals
- B. No, ISO standards are too complex for staff and suppliers to understand and follow
- C. No, because ISO standards are only relevant to large organisations
- D. Yes, implementation would guarantee that the company is compliant with all environmental laws
正解：A
解説：
Adopting ISO environmental standards aligns procurement practices with sustainability goals and helps reduce environmental and social impacts. Although implementing ISO standards may require initial adjustments, they foster long-term benefits by promoting responsible and ethical sourcing practices across the supply chain.
質問 # 74
What is a major benefit to using Incoterms when sourcing goods internationally?
- A. it ensures value for money
- B. it replaces lengthy contractual clauses
- C. it replaces the need for insurance
- D. it ensures ethical business practices
正解：B
解説：
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.
質問 # 75
Which of the following is an example of intracompany trading? Select TWO
- A. cleverness
- B. two companies join together to create a new product
- C. two companies owned by the same entity conduct business
- D. two departments within the same company collaborate on a project
- E. a manufacturer in the UK buys raw copper from a supplier in Chile
正解：C、D
解説：
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.
質問 # 76
Phishing is a type of fraud that is commonly associated with which industry?
- A. IT
- B. Agriculture
- C. Mining
- D. Construction
正解：A
解説：
Phishing is a type of fraud where IT users are sent a link (usually by email) which exposes them to activities of expert cybercriminals.
質問 # 77
The International Chamber of Commerce (ICC) publish a list of commercial rules known as Inco-terms. What is the purpose of these rules?
- A. to provide internationally recognized product descriptions
- B. to state which products can be exported from which countries
- C. to ensure buyers and suppliers pay the correct level of tax on imported and exported goods
- D. to describe the point at which an item is considered delivered
正解：D
解説：
Incoterms describe the point at which an item is considered 'delivered' and explains who has the risk of what during the transport of the goods.
質問 # 78
Why is it important, when awarding high-value contracts, for a buyer to conduct a financial assessment of a supplier?
- A. Financial assessments provide a holistic view of a company's capability, including quality and delivery performance
- B. If a supplier has a high credit score, this means it pays its own suppliers late, which could result in stock outs
- C. A supplier who is highly profitable will be charging prices higher than the average market rate
- D. The buyer must ensure continuity of supply because financial problems of a supplier could affect the supply
正解：D
解説：
Financial assessments help ensure a supplier can meet the demands of a high-value contract without disruptions. This aligns with responsible sourcing principles by promoting stable supplier relationships and reducing the risk of supply chain interruptions due to financial instability.
質問 # 79
Achieving the 'five rights of procurement' is one of the key objectives of procurement managers. Which of the following are not considered one of the 5 rights? Select TWO.
- A. quantity
- B. quality
- C. environment
- D. time
- E. ethics
正解：C、E
解説：
ethics and environment are not a 'right of procurement'.
The 5 rights are price, quality, quantity, time and place.
質問 # 80
A procurement manager for a major retail group is using ratio analysis to assess the financial viability of suppliers who have tendered for a logistics services tender. The recommended supplier has a current ratio of
0.6. What are the potential consequences of awarding the contract to this supplier, given their current ratio is below 1?
- A. The supplier will have cash reserves to cover unexpected expenses
- B. The results of the current ratio do not mean anything as long as the supplier has proven technical merit
- C. The supplier will be unable to cover long-term liabilities from revenues
- D. The supplier will be unable to pay its short-term liabilities using current assets
正解：D
解説：
A current ratio below 1 suggests that the supplier may not have sufficient current assets to cover short-term liabilities, which could pose a risk to the buyer. Assessing financial stability aligns with responsible sourcing practices, as it ensures suppliers can fulfill contracts without disruption.
質問 # 81
Which of the following payment mechanisms is most beneficial to the buyer?
- A. term / time draft
- B. sight draft
- C. open/ credit account
- D. cash in advance
正解：C
解説：
Open account (aka credit account) is most beneficial to the buyer. The supplier delivers the goods then the buyer pays.
Cash in advance is most beneficial to the supplier. The buyer pays for the item before receiving it.
This is a known exam topic.
質問 # 82
Incoterms are designed to be understood and interpreted on a worldwide basis. What is the interpretation for FOB (Free on Board)?
- A. The buyer takes responsibility for the goods after they are loaded on the ship, plus subsequent costs, excluding freight charges
- B. The buyer takes responsibility for transferring the goods from the seller's premises to the ship, plus all subsequent costs
- C. The buyer takes responsibility for the goods after they are loaded on the ship, plus all subsequent costs, including freight charges
- D. The buyer takes responsibility for taking the goods from the departure quayside to the ship, plus all subsequent costs
正解：C
解説：
Under FOB (Free on Board), the buyer assumes responsibility once the goods are loaded onto the ship, including costs and risks beyond this point. This Incoterm is commonly used in international trade, helping both parties clarify responsibilities and promote fair risk distribution.
質問 # 83
What is a risk of pre-warning a supplier that you will conduct an audit of their facilities?
- A. they will not achieve KPIs
- B. they will not be able to make that time and date
- C. they will not perform regular duties that day
- D. they may coach staff in what to say
正解：D
解説：
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.
質問 # 84
Sourcing products internationally involves extra considerations when looking at the price of the item. Which of the following are additional price considerations for international sourcing? Select TWO
- A. exchange rate
- B. tariffs
- C. total life cycle costs
- D. batch quantities
- E. tax
正解：A、B
解説：
Exchange rates and tariffs are associated with international sourcing.
The other options are concerns for both local sourcing and international sourcing.
質問 # 85
Sourcing aims to achieve the best value for money by taking into account several factors. Freddy is sourcing a new component for his company which manufactures tractors. Should Freddy take into consideration ethics and sustainability?
- A. no- 'value for money' only concerns price and if the product is fit for purpose
- B. yes- ethics and sustainability form part of 'value for money'
- C. no- 'value for money' is concerned with achieving the lowest price
- D. yes- ethics and sustainability show that the products are fit for purpose
正解：B
解説：
"yes- ethics and sustainability form part of 'value for money' " is the correct answer.
There are several factors that represent value for money and these are listed on p.3. These include; price, delivery, quality, ethics, sustainability and availability.
質問 # 86
The procurement team at Grape Juice Limited often use a weighted point system when ap-praising potential suppliers. What is a disadvantage of using a weighted point system?
- A. it is easy to manipulate
- B. it is hard to be objective
- C. it allows transparency
- D. it is time-consuming to create
正解：C
解説：
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.
質問 # 87
Which of the following incoterms has the lowest risk to the buyer?
- A. exworks
- B. delivered duty paid
- C. free on board
- D. carriage and insurance paid to
正解：B
解説：
The lowest risk to the buyer is 'delivered duty paid'. This is because the supplier does all the work transporting the items to the buyer's premises. Incoterms_2020_chart | Intersped
質問 # 88
A buyer in the public sector has put an advert out asking for interested suppliers to express an interest in a potential tender activity to provide a facilities management contract to a hospital trust. The suppliers who have met that criteria are then sent a document detailing how they should submit their tender, how to price the opportunity, asksQuestionsrelating to how they will deliver the service and gives a deadline for bids to be submitted. Which document have the suppliers ben sent?
- A. Invitation to Tender
- B. Request for Tender
- C. Request for Quotation
- D. Invitation to Quote
正解：A
解説：
This is an Invitation to Tender.
The only other real document listed in Request for Quotation. This is incorrect because the document asks questions relating to how they will deliver the service. This means price isn't the only factor, which is the case for a RfQ.
Request for Tender and Invitation to Quote are not real things.
質問 # 89
There are a number of models that can be used to appraise suppliers before commencing a full tendering process. Which of the following could be considered when appraising a supplier?
* Capacity
* Control
* Compatibility
* Commodity
- A. 2 and 4 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1 and 3 only
正解：D
解説：
Capacity and compatibility are critical factors in supplier appraisal. Evaluating these factors ensures that the supplier can meet the buyer's requirements in terms of production capacity and aligns with responsible sourcing by ensuring the supplier's values and practices are compatible with the buyer's expectations.
質問 # 90
Which of the following Incoterms has the lowest risk for the supplier?
- A. delivered at terminal
- B. ex works
- C. free on board
- D. delivered duty paid
正解：B
解説：
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
質問 # 91
A business may be faced with the challenge of deciding whether to source some of its requirements from external suppliers or whether to make them internally. Which of the following factors is likely to justify the decision to make the requirements internally?
- A. The availability of in-house competencies and capacity to carry out the production
- B. External suppliers are likely to be overcharging
- C. External sourcing involves cumbersome tendering procedures
- D. The other suppliers are using older technology
正解：A
解説：
Internal production is often justified when a company has the necessary competencies and capacity. This approach aligns with responsible sourcing by leveraging internal capabilities for better control over quality, cost, and compliance with ethical and environmental standards.
質問 # 92
Which of the following is considered as part of ESG?
- A. economic and social governance
- B. bribery, corruption and the environment
- C. market conditions and product lifecycle
- D. liquidity, gearing and profitability
正解：C
解説：
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.
質問 # 93
During which stage of the procurement cycle would you remove suppliers that do not add value, or could pose a risk to the buying organisation?
- A. contract award
- B. supplier selection
- C. develop strategy
- D. asset management
正解：B
解説：
At supplier selection stage, unsuitable suppliers should be removed (those that do not add value or pose a risk).
At develop strategy stage you're not even looking at suppliers yet- you're just deciding what you need. At contract award and asset management it's too late.
CIPS procurement cycle - Procurement Supply Cycle | CIPS
質問 # 94
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?
- A. Yes, you are free to do what you like outside of business hours
- B. Yes, you are keen to see what is on offer as you are only on minimum wage currently and need extra money
- C. 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
- D. No, it is not appropriate to discuss open opportunities with one provider and not another
正解：D
解説：
Accepting an invitation under such circumstances would violate ethical standards, as it could create a conflict of interest. Ethical sourcing and procurement practices require impartiality, and any perceived favoritism or bias can harm the organisation's integrity.
質問 # 95
The procurement team received an urgent request from the business to source quotations for pestcontrol services. The team decided to use a local newspaper to advertise the requirements. Was this an appropriate approach to use in the circumstances?
- A. Yes, so that the local pest control sector can decide between them who should bid
- B. No, because they might receive too many irrelevant proposals which may delay the assessing process
- C. No, because international vendors must also be notified of the opportunity
- D. Yes, they must seek as many bids as possible, even if it takes longer
正解：B
解説：
Advertising in a local newspaper for a specialized requirement can lead to irrelevant bids, delaying the process. Efficient sourcing practices recommend targeted advertising to reach qualified suppliers, ensuring timely responses and reducing assessment time, especially for urgent needs.
質問 # 96
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