L4M4 Exam Questions & Answers

The correct answers are; motion, waiting and inventory.

This is part of Ohno's 8 Wastes. You can remember this with the acronym Tim Woods;transportation, inventory, motion, waiting, over-production, over-processing, defects, skills.

This is only mentioned briefly in this module but comes up in other modules more in depth, so is worth memorising if you can.

The balance sheet, also known as the statement of financial position, provides a snapshot of an organisation's assets, liabilities, and equity at a specific point in time. It is the primary financial statement used to analyse what an organisation owns and owes. The profit and loss account focuses on income and expenses, while the cash flow statement shows cash movements. Credit rating reports summarise financial risk but are not financial statements. Ethical and responsible sourcing requires procurement professionals to understand balance sheets to assess supplier stability and reduce supply continuity risks.

Sourcing services locally can deliver social and economic benefits, including the creation of local employment opportunities and economic stimulation within the community. Local suppliers often reinvest in the local economy, supporting regional development and social value objectives. While reduced environmental impact may occur, it is not guaranteed for services, and contract management requirements remain regardless of supplier location. Ethical and responsible sourcing encourages consideration of social value outcomes, particularly where procurement decisions can positively impact local communities and stakeholders.

Supplier selection is about ensuring that suppliers are capable and suitable to meet the buyer's requirements, including quality, reliability, and alignment with ethical standards. It also focuses on identifying, from a pool of pre-qualified suppliers, which supplier offers the best overall outcome. Financial stability and culture are considered earlier in pre-qualification, not during final selection. Similarly, ''time-efficiency'' in tender response is not a primary factor in supplier selection. Responsible sourcing emphasises due diligence, capability, and alignment with sustainability and ethical practices as part of selection decisions.

Transparency International provides the Corruption Perceptions Index, which ranks countries based on perceived levels of public sector corruption, offering valuable insights into the anti-bribery risks of a specific country. Additionally, understanding the local anti-corruption legislation helps the buyer assess the legal framework and enforcement mechanisms in place, which is crucial when entering into contracts with suppliers in new jurisdictions.

Exact Extract from Study Guide:

'Transparency International's Corruption Perceptions Index is a key resource for assessing the risk of corruption in different countries. Local anti-corruption legislation provides the legal context within which suppliers operate, and understanding these laws is essential for ensuring compliance and ethical sourcing.'