L4M4 Exam Dumps - Ethical and Responsible Sourcing

Explanation

Intracompany trading is when two departments in the same company do trading. AND when two companies owned by the same parent company do trading.

INTRA means 'within' - so it's doing business with yourself.

The balance sheet (statement of financial position) shows assets, liabilities, and equity at a point in time. The profit and loss account (income statement) shows revenues, expenses, and profit over a period. These are the two core statements used to assess supplier stability and performance. The cash flow statement is useful but supplementary, while chairman’s statements are narrative, not financial records. Responsible sourcing emphasises using balance sheet and P&L analysis to evaluate supplier financial strength, ensuring continuity of supply and risk management.

Incoterms, short for International Commercial Terms, were introduced by the International Chamber of Commerce (ICC) in 1936. These standardized terms are used globally to define the responsibilities of buyers and sellers in international trade, helping to avoid misunderstandings by clarifying tasks, costs, and risks involved in the delivery of goods.

Explanation

A RFI typically finds the following information from potential suppliers; ethical and sustainability policies and their capacity / capability to fulfil a contract. It could also include financial position, mission and vision.

In the sourcing process, obtaining necessary approvals (such as drawings for the invitation to tender) is critical to ensure clarity and readiness before engaging with suppliers. Responsible sourcing emphasizes structured preparation, ensuring compliance and accuracy in supplier expectations.

Protectionist measures are designed to shield domestic industries from foreign competition. The most common form is import duties (tariffs), which raise the landed cost of goods entering the country. This creates a barrier to trade by making imports less competitive compared to local products. Arbitration is a dispute resolution method, not a trade barrier. Carnets are documents for temporary duty-free movement of goods, and inward processing relief is an exemption for goods imported for re-export. Responsible sourcing requires buyers to anticipate the cost and risk implications of protectionism when engaging in international supply.

Explanation

The lowest risk to the buyer is 'delivered duty paid'. This is because the supplier does all the work transporting the items to the buyer's premises. Incoterms_2020_chart | Intersped

An Invitation to Tender (ITT) is typically used for complex, high-value procurements where the quality and specific features of the goods or services are of paramount importance. This approach ensures that ethical and responsible sourcing criteria are met, aligning with best practices in procuring specialised goods or services.