Demand and currency fluctuations affect commodity pricing. November shows lowest demand, which usually reduces price pressure. Conversely, May (high demand) and months with strong supplier currencies (January, April) would increase costs. By ordering in November, the buyer leverages demand cycles to obtain lower prices. Responsible sourcing requires buyers to monitor market intelligence and seasonal trends to time purchases effectively, mitigating risks of price volatility while ensuring supply continuity. This reflects CIPS' s emphasis on category management and proactive procurement planning.
Reference: CIPS L4M4 Study Guide (v2), LO: "Application" - demand cycles, timing of orders, commodity sourcing.

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.
Reference: CIPS L4M4 Study Guide (v2), LO: "Application" - financial statements and supplier evaluation.

Regulatory frameworks that affect procurement focus on ethical practice (anti-bribery, modern slavery, human rights), data protection (GDPR and similar), and competition law (to prevent collusion and monopolistic practices). While digitisation and innovation are important trends, they are not regulatory requirements. Similarly, culture, branding, and uniforms are internal matters, not regulatory areas.
Responsible sourcing requires procurement professionals to ensure compliance with these regulations to protect stakeholders, maintain fairness, and safeguard organisational reputation.
Reference: CIPS L4M4 Study Guide (v2), LO: "Concepts" - legal and regulatory environment of ethical sourcing.

Payment history and financial stress scores provide insights into a supplier's financial health and stability.
This information is crucial for procurement professionals in assessing whether a supplier can fulfill long-term commitments, supporting responsible sourcing by mitigating financial risks.

In a restricted tender process, suppliers are pre-qualified through a selection process before being invited to submit tenders. This approach is suitable when there is a need to ensure that only capable suppliers are considered, often due to the complexity or high value of the procurement. It is not limited to situations with few suppliers, and direct negotiations typically occur after tender submissions, not before. Contracts are awarded based on multiple criteria, not solely on price.
Reference:
CIPS Level 4 Diploma in Procurement and Supply, L4M4 Study Guide, Section 2.2: Tendering Procedures