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What course of action should be taken when an audit of a supplier identifies evidence of human rights malpractice?
A. Remove all business and inform press organisations, who will in turn bring the issue to the attention of formal governmental organisations who can take action
B. Allow the supplier to complete current orders placed, while pursuing an alternative source to change to as soon as approved
C. Immediately halt all orders with the supplier, make a record of the violation in the supplier database, and switch to an alternative source of supply
D. Immediately raise the issue with the supplier and jointly develop a timely action plan to be implemented before a repeat audit
Answer: D
Explanation:
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.
NEW QUESTION # 61
Who was responsible for introducing the concept of Incoterms?
A. World Trade Organisation
B. United Nations Commission
C. International Commerce Centre
D. International Chamber of Commerce
Answer: D
Explanation:
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.
Reference:
International Chamber of Commerce:
NEW QUESTION # 62
Ivan is an investor who is looking to invest in new businesses. He is reviewing several companies and working out what his equity would be. Which of the following does Ivan need to know to calculate shareholder equity?
Select TWO.
A. net profit
B. net income
C. total assets
D. total liabilities
Answer: C,D
Explanation:
Shareholder Equity = Total Assets - Total Liabilities
NEW QUESTION # 63
Foresttors Plc is negotiating a new contract for the procurement of timber, a crucial component of its production operations. The company has incorporated environmental, social, and governance (ESG) reporting requirements into the contractual terms. Is this a valid approach?
A. Yes. This helps to demonstrate the importance of compliance with ESG
B. No. Suppliers cannot be legally responsible for ESG compliance; this should be the buying organisation
C. Yes, providing the contract does not require a supplier to do anything differently for ESG than they have done previously
D. No. ESG is not within the scope of a contractual document and should always be treated informally
Answer: A
Explanation:
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.
Reference: CIPS L4M4 Study Guide (v2): LO "Implementation" - contractual clauses for ethics/ESG, monitoring and enforcement.
NEW QUESTION # 64
A buyer is responsible for the procurement of metals within the raw materials department. The buyer is preparing for next year's purchase orders and has been asked to confirm the month of order placement. The buyer has found three trends:
* In January and April, the supplier's local currency is stronger
* November typically has the lowest demand
* May typically has the highest demand
Which month should the buyer plan to place the purchase order?
A. May
B. January
C. November
D. April
Answer: C
Explanation:
Ordering in November, when demand is lowest, may allow the buyer to secure better pricing and availability, aligning with responsible sourcing by optimizing purchase timing to achieve cost savings and reliable supply.
NEW QUESTION # 65
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