CIPS L5M5 Exam Questions Instant Access - No Installation Required

Question 1

Nicolas is the Head of Procurement at Penny Dolittle Manufacturing Company. He is introducing an ESG agenda to the company's procurement strategy, especially regarding sustainability. Nicolas believes an advantage of this is that it will drive innovation. Is he correct?

AYes -- reporting on sustainability can drive change and innovation

BYes -- reporting on sustainability is mandatory and always leads to innovation

CNo -- reporting on sustainability will only increase reputation

DNo -- reporting on sustainability will increase costs

Answer : A

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The L5M5 study guide (p.182) states that sustainability reporting and the adoption of ESG (Environmental, Social, Governance) principles can stimulate organisational change and innovation. By measuring and reporting on sustainability, companies often seek new technologies, processes, and supply models to improve performance and meet ESG commitments. Reporting is not mandatory in all cases, so option B is incorrect. While sustainability may improve reputation and sometimes costs, these are not the key focus of this question. CIPS guidance stresses that sustainability reporting can drive innovation---procurement can encourage suppliers to develop new sustainable practices, products, and approaches.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.182

Question 2

How do Fair Trade organisations protect producers of raw materials from poor economic conditions?

AA standard for working conditions is set

BFinal products are marketed as Fair Trade

CMoney is provided to communal funds

DA minimum price is set for purchase of items

Answer : D

Comprehensive and Detailed Explanation From Exact Extract of Documents:

Fair Trade organisations protect producers economically by ensuring a minimum price for raw materials, regardless of market fluctuations. The L5M5 study guide (old p.224, new p.303) explains that this stabilises producer incomes against volatile commodity prices, tariffs, or currency risks. While Fair Trade also involves better working conditions and community investment, the primary economic safeguard is the guaranteed minimum price. Procurement professionals should recognise how Fair Trade contributes to supply chain stability and resilience.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.303

Question 3

What does the ''D'' stand for in STEEPLED Analysis?

AData

BDebt

CDemographic

DDelivery

Answer : C

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 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

Question 4

Juicy Boots has a contract with Orange Ltd containing a Retention of Title Clause. Juicy Boots failed to pay for two deliveries, and Orange Ltd reclaims goods already delivered. Is this valid?

AYes -- the product still belongs to Orange Ltd

BYes -- the product can be reclaimed under any circumstances

CNo -- if Juicy Boots signed for delivery, goods belong to them

DNo -- delivery on time transfers ownership

Answer : A

Comprehensive and Detailed Explanation From Exact Extract of Documents:

A Retention of Title Clause states that ownership of goods remains with the seller until full payment is made. According to the L5M5 study guide (p.190), Orange Ltd legally retains ownership of the fruit delivered until Juicy Boots settles payment. This clause protects suppliers, particularly SMEs, from non-payment risks. Signing for delivery does not override the clause, and timely delivery is irrelevant. Retention of Title is an important risk management tool in procurement contracts.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.190

Question 5

Samir is the Project Manager of a large construction project. Due to the complexity of the build, the main contractor has employed specialist subcontractors. What is the disadvantage of using subcontractors for this work?

AIncreased costs

BLower quality of work

CLess control

DCompliance with the law

Answer : C

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The disadvantage of subcontracting is less control over performance. The L5M5 study guide (p.156) notes that while subcontracting allows access to specialist expertise, it creates additional risks for project delivery, as the main contractor remains accountable for subcontractor performance. Problems such as delays, quality issues, or non-compliance can occur, and these are more difficult to manage indirectly. Increased costs (A) are not always true since subcontracting can be cost-effective, while lower quality (B) depends on subcontractor capability. Compliance with the law (D) is a requirement, not a disadvantage. Procurement professionals must carefully manage subcontractors through clear contracts, monitoring, and accountability measures.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.156

Question 6

Creating value responsibly for shareholders would sit under which aspect of the sustainability triple bottom line?

ALegal

BSocial

CEnvironmental

DEconomic

Answer : D

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The economic pillar of the Triple Bottom Line refers to the creation of financial value while maintaining responsibility toward stakeholders. The L5M5 study guide (p.179) explains that sustainability in procurement is not only about compliance with social and environmental standards but also about ensuring financial viability. Activities such as delivering shareholder returns, managing costs, and achieving long-term profitability fall under the economic dimension. 'Legal' is not one of the TBL pillars, and while law supports governance, it is not itself a sustainability principle. Therefore, creating value for shareholders through responsible economic performance is clearly categorised under the economic aspect of TBL.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.179

Question 7

Ruby is a Contracts Manager at ACE Ltd and manages a contract with Spades Ltd which provides raw materials. She has found a serious issue in Spade's conduct. Which TWO documents should Ruby complete?

AKPIs and Root Cause Analysis

BRoot Cause Analysis and Corrective Action Plan

CCorrective Action Plan and SWOT Analysis

DSWOT Analysis and KPIs

Answer : B

Comprehensive and Detailed Explanation From Exact Extract of Documents:

When a supplier's conduct breaches expected standards, the appropriate tools are Root Cause Analysis (to identify why the issue occurred) and a Corrective Action Plan (to detail how the supplier will fix and prevent recurrence). The L5M5 study guide (p.228) emphasises that KPIs should already be established at the start of the contract, and a single conduct issue may not mean performance indicators are being missed. SWOT analysis is not suitable in this scenario, as it is a strategic tool rather than a compliance or corrective measure. Corrective actions ensure continuous improvement and supplier accountability, which are essential for ethical supply chain management.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.228

CIPS Managing Ethical Procurement and Supply L5M5 Exam Questions