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CIPS L5M2 Exam Questions
- Topic 1: Managing Teams and Individuals: This section covers how to evaluate the different schools of thought and the reasoning behind the variety of approaches to the management of themselves, individuals, and groups or teams within organizations.
- Topic 2: Managing Supply Chain Risk: This section covers a variety of tools and techniques to establish the level of risk in supply chains and to recommend and apply ways of avoiding, mitigating, or managing risk.
- Topic 3: Managing Contractual Risk: This section evaluates the legal and process issues relating to the formation of contracts and the legal implications of contractual non-conformance. Candidates are tested for the impacts of breach of contract.
- Topic 4: Advanced Contract and Financial Management: This section deals with developing measures to ensure and improve contract performance as they assess the concept and use of strategic sourcing.
- Topic 5: Managing Ethical Procurement and Supply: This section explains the impact of and initiatives to improve, sustainability and the managerial approaches to promote ethical practices in procurement and supply.
Free CIPS L5M2 Exam Actual Questions
Note: Premium Questions for L5M2 were last updated On Apr. 07, 2025 (see below)
Which of the following statements are true about risk management? Select TWO.
The correct responses are 2 and 4: risk management is a continual process and helps companies ensure the smooth and successful running of P+S. These are direct quotes from p.3 of the study guide. The other answers are wrong- if risk management is a continuous process it's not something that is done once a year- so this option is automatically discounted. Option 1 is also wrong as you can never reduce all risks to 0, and option 5 is also wrong- risks can be treated and transferred, but they can also be tolerated and terminated.
What is the purpose of an indemnity clause within a contract?
Indemnity clauses transfer risk from one party to another. It is an arrangement whereby one party promises to compensate the other party for a trigger event. An example of an indemnity clause could be a construction firm is building a new bridge and the project is supposed to be completed by 1st June. An indemnity clause may state that should the bridge not be ready by this date, the construction firm will compensate the buyer by X amount. See p.61 for more information on indemnity.
Oliver is a procurement manager and he is trying to work out the likelihood that a supplier fails to deliver to the warehouse two days in a row. Which of the following methodologies should Oliver use?
Which of the following risks is associated with sourcing from low-cost countries? Select TWO:
The correct answers are reputational risks and geopolitical risks. This is according to p. 77 of the study guide. Although I personally feel this is a bit presumptive, painting all 'low-cost' countries with the same brush (are all 'low-cost countries' politically unstable and allow dodgy things that will affect your reputation?, this is what the textbook says ...
Portobello is an Italian manufacturing company that produces canned tomato sauces. It imports a lot of its tomatoes from Latin America as there isn't the capacity to grow that many tomatoes in Italy. One of the major risks posing Portobello is that the tomatoes must be transported via cargo ship, and there is a risk that the ship may sink, or be delayed by bad weather. Portobello has taken out insurance to cover the cost of the tomatoes should this happen. What technique has Portobello used?
The risk has been transferred to the insurance company. This question is based on the 4Ts from p.32- this is a popular exam topic, for both the multiple choice questions and the drag and drop
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