Explanation

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.

Modern slavery and human rights are social sustainability issues. Under the triple bottom line (environmental, social, economic), the social dimension covers labour rights, working conditions, equality, and compliance with modern slavery laws. Responsible sourcing requires buyers to integrate such social criteria in supplier prequalification to prevent unethical practices from entering supply chains. Environmental criteria cover impacts like carbon and waste; economic focuses on cost and competitiveness; quality addresses technical performance. Including modern slavery checks at the prequalification stage reflects due diligence and ensures alignment with legal and ethical obligations.

Under theFOB (Free on Board)Incoterm, the seller is responsible for delivering the goods onto the vessel at the named port of shipment. Once the goods are on board, the risk and responsibility transfer to the buyer. From that point onward, the buyer assumes all costs and risks associated with the transportation of the goods, including freight charges, insurance, unloading, and delivery to the final destination.

This interpretation aligns with the Incoterms® 2020 rules set by the International Chamber of Commerce (ICC). It's crucial to note that FOB is applicable only for sea or inland waterway transport and is not suitable for containerized cargo, where theFCA (Free Carrier)term is more appropriate.

Explanation

the correct answer is 'Yes- a low gearing ratio means the company's finances are made up of equity rather than debt'.

Remember low gearing = good (based on equity), high gearing = bad (based on debt). Anything over 50% is considered high.

The two no answers are therefore incorrect and you can discount these straight away. The other yes answer is one of those answers which COULD be true, but isn't always true, and we'd need more information to know for sure. When you get options like this there will be one that is always right and one which is sometimes right - so always pick the always right one.

Dealing with supply chain disruptions is complex, and depending what the disruption is, how big it is, what the industry is etc determines whether a supplier can handle it or not. Because there's more factors to consider than just gearing, this isn't the right answer.

A bill of lading serves as:

Evidence of the contract of carriage between shipper and carrier.

Liquidity measures a company’s ability to meet short-term obligations. The current ratio = current assets ÷ current liabilities, indicating whether the business can cover debts due within one year. Ratios above 1 suggest healthy liquidity, though excessively high ratios may show underutilised cash. Gearing reflects debt-to-equity (solvency); ROI assesses profitability; total asset turnover measures efficiency. Responsible sourcing requires buyers to evaluate liquidity to ensure suppliers have the working capital to maintain operations and deliver reliably. Poor liquidity is a red flag for potential supply disruption.

Explanation

This is a facilitation payment. It's when a sum of money is given for 'helping to facilitate' a contract. E.g. a procurement manager may accept a facilitation payment from a supplier for selecting him to be a new supplier for a big contract.

In the UK this is definitely considered a bribe. It's also against the CIPS Code of Conflict