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L5M5 Real Exam Questions Full version

CIPS L5M5 real exam samples are available below.

[Link] of the following is a disadvantage of Low-Cost Country Sourcing

(LCCS)? Select THREE
A. Low infrastructure costs
B. Scalability of production
C. Inventory risks
D. Different laws and regulations
E. Currency fluctuations
Answer: C, D, E
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
While LCCS can reduce costs, it also presents risks. The L5M5 study guide
(p.72) identifies disadvantages such as inventory risks (C) from longer lead
times, different laws and regulations (D) creating compliance challenges, and
currency fluctuations (E) impacting costs unpredictably. Low infrastructure costs
(A) and scalability of production (B) are advantages, not disadvantages.
Procurement professionals must weigh cost savings against these risks and

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 [Link]

implement mitigation strategies such as dual sourcing and currency hedging.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.72

[Link] illegitimate use of a person’s role for gain is what form of ethical issue?
A. Bribery
B. Corruption
C. Fraud
D. Slavery
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (p.48) defines corruption as the illegitimate use of one’s
role or position for
personal gain. This differs from bribery (A), which is offering or accepting
inducements, and fraud (C), which involves deception such as falsifying records
or creating phantom suppliers. Slavery (D) refers to forced labour. Procurement
professionals must recognise corruption risks, particularly in international supply
chains, and implement controls such as segregation of duties, audit trails, and
whistleblowing policies.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.48

[Link] Boo Ltd conducts an audit checking compliance with regulations, policies,
and risk procedures.
What type of audit is this?
A. External audit
B. Third-party audit
C. Compliance audit
D. Benchmarking audit
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
A compliance audit evaluates whether an organisation adheres to regulatory
requirements, security policies, and internal risk management procedures. The
L5M5 study guide (p.207) highlights that this is distinct from external audits
(conducted by outsiders), third-party audits (commissioned independently), and
benchmarking audits (comparing against industry peers). Procurement
professionals must use compliance audits to ensure suppliers meet legislative
and regulatory standards, reducing risks of non-compliance, fines, and
reputational damage.

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 [Link]

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide,

p.207

[Link] Modern Slavery Act (2015) ensures supply chains are free from forced and
child labour.
Which of the following is a limitation of the Act?
A. It doesn’t apply if supply chains are outside the UK
B. It only applies to companies with a large turnover
C. It is optional to comply with
D. There are no repercussions for non-compliance
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The Modern Slavery Act (2015) requires companies with a turnover above £36
million to publish a slavery and human trafficking statement. The L5M5 study
guide (p.45) highlights this as a limitation because it excludes smaller
businesses, even though they may also operate complex supply chains. The Act
applies regardless of where supply chains are located (so A is incorrect), and
compliance is mandatory (C is incorrect). Non-compliance can lead to civil
proceedings (so D is incorrect).
Procurement professionals must be aware of this threshold and ensure
compliance in larger organisations.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.45

[Link] creating a Sustainable Procurement Policy, which of the following steps

should be conducted first?
A. Gather information
B. Draft the policy
C. Identify who will take lead responsibility
D. Consult with stakeholders
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (p.33) outlines nine steps to creating a Sustainable
Procurement Policy. The very first step is to identify who will take lead
responsibility (C). This ensures accountability from the outset. Once a leader is
appointed, the next steps include gathering information, drafting the policy,
consulting with stakeholders, obtaining approval, and monitoring. Without clear
leadership, policies risk being ineffective. Procurement professionals must

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 [Link]

ensure accountability and leadership to drive sustainability objectives effectively.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.33

[Link] Clothing Manufacturing has a superior IT system compared to

competitors.
What form of competitive advantage is this?
A. Culture
B. Processes
C. Intellectual property (IP)
D. People
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
Competitive advantage refers to unique capabilities that give an organisation an
edge in the market. The L5M5 study guide (old p.39, new p.63) explains that
superior IT systems fall under process advantages, as they directly influence how
efficiently orders are taken, materials are managed, and operations are executed.
Culture (A) refers to organisational values and behaviours, IP (C) refers to
patents or trademarks, and People (D) refers to skills or talent. For procurement,
recognising process-driven advantages helps identify supplier strengths and
strategic sourcing opportunities.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.63

7.A discrimination claim has been filed against ABC Ltd under the Equalities Act
2010.
What is the maximum compensation limit?
A. £10,000
B. £83,682
C. £100,000
D. No limit
Answer: D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (old p.67, new p.95) explains that there is no limit to
compensation claims for breaches of the Equalities Act 2010. By contrast, unfair
dismissal claims (not linked to discrimination) are capped at the lower of £83,682
or 52 weeks’ gross pay. Discrimination claims, however, are unlimited, reflecting
the seriousness of breaches. Procurement professionals must ensure suppliers
comply with equalities legislation, as non-compliance can lead to unlimited

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 [Link]

liability and reputational damage.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.95

[Link] criticism of the UN Global Compact is that some organisations join without
making real ethical improvements, using it for legitimacy instead.
What is this known as?
A. Greenwashing
B. Blue washing
C. Corruption
D. Bribery
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (p.258) explains that blue washing refers to organisations
associating with the UN Global Compact to appear legitimate while failing to
implement its principles. The term comes from the blue colour of the UN flag. In
contrast, greenwashing (A) is when companies exaggerate their environmental
credentials. Blue washing is a reputational risk because it undermines genuine
CSR initiatives and public trust. Procurement professionals must ensure that
CSR commitments are backed by verifiable actions rather than symbolic
gestures.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide,
p.258

[Link] Chain Operations Reference (SCOR) is a model of supply chain

mapping used by many procurement professionals.
Which of the following are advantages of SCOR? Select TWO
A. It can be used across different industries
B. It can relate to both internal and external factors
C. It can improve and communicate organisational decisions
D. It ensures costs remain low
Answer: A, C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The Supply Chain Operations Reference (SCOR) model is a widely adopted
framework for analysing and improving supply chain performance. According to
the L5M5 study guide (p.149), advantages of SCOR include its universality
across industries (A) and its ability to improve and communicate organisational
decisions (C) by providing a common language and structure for supply chain

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 [Link]

processes. A limitation of SCOR is that it focuses primarily on internal processes

and does not adequately capture wider external environmental or social factors
(making option B incorrect). While SCOR can help identify cost-saving
opportunities, it does not guarantee low costs (D). For procurement
professionals, SCOR is an important tool for benchmarking performance and
driving improvements in ethical supply chain management.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide,
p.149

[Link] are the two ways an item can be labelled as “Fair Trade” by the
WFTO? Select TWO
A. Product certification route
B. Manufacturer route
C. Integrated supply chain route
D. Audit route
Answer: A, C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The World Fair Trade Organisation (WFTO) recognises Fair Trade items through
either the product certification route (A), where only the product is certified, or the
integrated supply chain route (C), where the entire supply chain is Fair Trade
compliant. The L5M5 study guide (old p.223, new p.300) emphasises that these
approaches provide flexibility for businesses while ensuring ethical standards are
upheld. Manufacturer route (B) and audit route (D) are not official WFTO
pathways. Procurement professionals should understand these routes when
sourcing ethically certified goods.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide,
p.300

[Link] organisation is responsible for the creation of the 2030 Sustainable

Development Agenda?
A. UN
B. NATO
C. ISO
D. ILO
Answer: A
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The United Nations (UN) launched the 2030 Sustainable Development Agenda,

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 [Link]

which includes the 17 Sustainable Development Goals (SDGs). The L5M5 study
guide (p.4) emphasises that these goals cover social, environmental, and
economic priorities, including poverty reduction, climate action, decent work, and
responsible consumption. NATO, ISO, and ILO play important roles in
governance, standards, and labour rights but are not responsible for the SDGs.
For procurement professionals, the SDGs provide a global framework to align
ethical supply practices with wider sustainability objectives.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.4

[Link] is a monopsony?
A. There is only one supplier of a good
B. There is only one buyer of a good
C. There is only one product available in the market
D. There is only one market to sell the good in
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
A monopsony exists when there is only one buyer in a market but multiple
sellers. For example, in the defence industry, a government may be the sole
buyer of military equipment such as submarines. This contrasts with a monopoly,
where only one seller dominates the market. The L5M5 study guide (p.127)
explains that monopsony can create power imbalances, as the buyer holds
significant leverage over suppliers, potentially leading to unfair contract terms.
Ethical procurement requires recognising such risks and ensuring that dominant
buyers do not exploit suppliers unfairly.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide,
p.127

[Link] does the “D” stand for in STEEPLED Analysis?

A. Data
B. Debt
C. Demographic
D. Delivery
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The STEEPLED analysis tool examines external macro-environmental factors:
Social, Technological, Economic, Environmental, Political, Legal, Ethical, and
Demographic. The L5M5 study guide (p.55) confirms that “D” stands for

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 [Link]

Demographic, reflecting population trends, age structures, and workforce

availability. This addition evolved from the earlier PESTLE model, later extended
to STEEPLE and STEEPLED. Procurement professionals use this tool to assess
external risks and opportunities that may affect supply markets and ethical
sourcing.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.55

[Link] to the International Institute for Sustainable Development, which of

the following are part of the 6 key components of a CSR Plan? Select THREE
A. Introduction
B. Financial analysis
C. Implementation plan and activities
D. CSR commitment to stakeholder engagement
E. Verification and evaluation of results
Answer: C, D, E
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (p.8) outlines the six key components of a CSR plan: CSR
Assessment, CSR Strategy and Refinement, Implementation Plan and Activities
(C), Commitment to Stakeholder Engagement (D), and Verification and
Evaluation of Results (E). An introduction (A) and financial analysis (B) may
support a CSR plan but are not listed as key components. Procurement
professionals should ensure CSR plans are robust, measurable, and involve
stakeholder engagement to gain
legitimacy and trust.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.8

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