L5M5 Online Practice Questions

Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
SA8000 is an internationally recognised certification standard for social accountability. It requires organisations to adopt management systems to monitor compliance with social standards, including child labour elimination, safe working conditions, and fair wages. According to the L5M5 study guide (p.264), one disadvantage is the cost of implementing and maintaining the management system, which can be resource-intensive for smaller organisations. SA8000 is not industry-specific, is recognised globally, and is applicable to both large and small organisations. However, the investment in audits, training, and compliance documentation can be significant, making this a barrier for some companies.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.264

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.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.207

Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (p.194) confirms that On Time In Full (OTIF) delivery is a standard performance metric but is not an ESG measure. ESG measures include waste reduction (E), social value (S), and ED&I (S), which assess ethical, social, and environmental responsibilities. Procurement professionals
must distinguish between operational KPIs and sustainability-focused KPIs to ensure contracts drive both efficiency and ethical responsibility.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.194

Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
ISO14001 is an international standard for environmental management systems. According to the L5M5 study guide (p.277), one disadvantage is that ISO does not set environmental performance targets itself; instead, it requires organisations to define their own targets. This means some organisations may set very easy or minimal goals, limiting actual environmental improvement.
Option A is incorrect as ISO14001 applies consistently across industries.
Option C is a requirement, not a disadvantage.
Option D is an overgeneralisation―while some firms misuse it for "greenwashing," many genuinely use it to improve sustainability.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.277