L5M5 Exam dumps PDF | Exam-Dumps.net (Page: 1)

QUESTION: 1

Which of the following form the 'Triple Bottom Line'? Select THREE

People
Planet
Product
Profit
Placement

Answer(s): A,B,D

Explanation:

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The concept of the Triple Bottom Line (TBL), also referred to as the "3Ps," is a framework that assesses organisational success through People, Planet, and Profit. These dimensions highlight the balance between social equity (people), environmental stewardship (planet), and economic performance (profit). According to the CIPS L5M5 study guide (p.3), procurement and supply professionals are expected to incorporate sustainability into decision-making processes, ensuring that business practices do not only create economic value but also deliver positive social and environmental impacts. "Product" and "Placement" are not part of the TBL model, as they are marketing-related concepts, not sustainability measures. This principle ensures procurement strategies align with corporate responsibility and long-term sustainable growth.

Reference:

Managing Ethical Procurement and Supply (L5M5) Study Guide, p.3

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QUESTION: 2

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

Legal
Social
Environmental
Economic

Answer(s): D

Explanation:

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

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QUESTION: 3

Which of the following is not considered to be an alternative form of dispute resolution?

Mediation
Adjudication
Conciliation
Litigation

Answer(s): D

Explanation:

Comprehensive and Detailed Explanation From Exact Extract of Documents:

Alternative Dispute Resolution (ADR) mechanisms are encouraged in procurement as they save time, reduce costs, and preserve business relationships. The key ADR methods listed in the L5M5 study guide (p.188) include mediation, adjudication, and conciliation. These methods are designed as alternatives to litigation, which involves courts, legal judgments, and lengthy processes. Litigation is not an ADR method; it is the traditional approach, often more adversarial and costly. Procurement professionals are encouraged to adopt ADR whenever possible, as it helps maintain collaborative supplier relationships while resolving conflicts effectively.

Reference:

Managing Ethical Procurement and Supply (L5M5) Study Guide, new edition p.188

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QUESTION: 4

ABC Construction is in a contract with DEF Developers to deliver 40 houses. The contract includes a "Payment is of the Essence" clause. DEF fails to pay for completed work. ABC stops work. Are they allowed to do this?

No the contract has not been completed, so ABC must continue working
No as long as payment is made eventually, ABC must keep working
Yes ABC have the right to stop work as non-payment is a breach of contract
Yes it is a legal requirement to pay construction firms regularly

Answer(s): C

Explanation:

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The correct answer is Yes, ABC can stop work. The L5M5 study guide (p.189) explains that where a clause states "of the essence," it means the condition is fundamental to the contract. Non-payment under a "Payment is of the Essence" clause is considered a material breach of contract. This allows the injured party (ABC) to terminate the agreement and/or claim damages. In construction contracts, timely payments are essential because they enable contractors to pay subcontractors. Historically, "pay when paid" clauses caused major problems for smaller firms, leading to reforms and the introduction of stricter "essence" clauses to protect them. Thus, DEF Developers' failure to pay entitles ABC to stop work legally.

Reference:

Managing Ethical Procurement and Supply (L5M5) Study Guide, p.189

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QUESTION: 5

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?

KPIs and Root Cause Analysis
Root Cause Analysis and Corrective Action Plan
Corrective Action Plan and SWOT Analysis
SWOT Analysis and KPIs

Answer(s): B

Explanation:

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

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QUESTION: 6

Which of the following statements is TRUE about the adjudication form of dispute resolution? Select TWO

It is an informal process
It is quicker than going through the courts
A decision must be made within 28 days
The decision cannot be legally binding

Answer(s): B,C

Explanation:

Comprehensive and Detailed Explanation From Exact Extract of Documents:

Adjudication is a formal ADR method, widely used in construction and supply disputes. The L5M5 study guide (p.237) outlines its key features: it is designed to be faster than court proceedings and legally requires that a decision is reached within 28 days of referral. Decisions made can also be legally binding. Contrary to option A, adjudication is not informal; it follows structured legal processes. Option D is also incorrect, as adjudicator decisions may carry binding authority unless overturned later in arbitration or litigation. The process ensures disputes are resolved promptly, preventing long project delays.

Reference:

Managing Ethical Procurement and Supply (L5M5) Study Guide, p.237

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QUESTION: 7

During the transition period at the end of a contract, which of the following is usually the most difficult or complicated to organise?

Returning of physical assets
Drawing up an exit strategy
Document transfer
Knowledge transfer and IP rights

Answer(s): D

Explanation:

Comprehensive and Detailed Explanation From Exact Extract of Documents:

Knowledge transfer and Intellectual Property (IP) rights are often the most difficult elements to manage during contract termination. The L5M5 study guide (p.241) explains that physical assets and documents can be returned easily, but IP rights and tacit knowledge (e.g., processes, experience, trade secrets) are harder to transfer and may be contested between parties. Disputes may arise over ownership of IP developed during the contract. Procurement professionals must establish clear exit strategies early in the contracting process to address these issues and avoid disputes at termination. This ensures continuity and protects business interests while maintaining ethical standards.

Reference:

Managing Ethical Procurement and Supply (L5M5) Study Guide, p.241

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QUESTION: 8

Freedom of association is a protected right under the ILO convention.
What does this allow workers to do?

Have a second job
Have work-life balance
Join a union
Avoid slavery

Answer(s): C

Explanation:

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The International Labour Organization (ILO) sets global labour standards, and freedom of association is one of its fundamental rights. According to the L5M5 study guide (p.249), this right allows workers to form or join trade unions and workers' organisations to collectively defend their interests. It ensures employees can negotiate working conditions, pay, and rights without discrimination or retaliation. This principle underpins fair labour practices and corporate social responsibility. Other options such as "having a second job" or "avoiding slavery" are separate issues covered under different ILO conventions, but they do not define freedom of association.

Reference:

Managing Ethical Procurement and Supply (L5M5) Study Guide, p.249

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CIPS L5M5 Exam (page: 1)
CIPS Managing Ethical Procurement and Supply
Updated on: 06-Apr-2026

Access free L5M5 actual exam questions, answers, explanations and user discussions.

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CIPS L5M5 Exam (page: 1) CIPS Managing Ethical Procurement and Supply Updated on: 06-Apr-2026

Access free L5M5 actual exam questions, answers, explanations and user discussions.

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CIPS L5M5 Exam (page: 1)
CIPS Managing Ethical Procurement and Supply
Updated on: 06-Apr-2026