Marcus is an account manager for a company that sells maintenance spares for air conditioning units. He has a customer who persistently pays late, is very demanding in terms of constant requests, and the profit margin on the account is minimal. If Marcus were to use a supplier preferencing model to map this customer, what category would he place them into?
In the Purchasing Portfolio Matrix, a leverage product is a product in a market where it is easy to switch suppliers and the quality is standardized. Is this TRUE or FALSE?
Which of the following are characteristics that differentiate between a partnership relationship and traditional contracting relationships? Select THREE.
Philip is working with a supplier where the annual spend is low but the market risk is high. What portfolio analysis category would be appropriate?
Togo Bongos is a manufacturer of percussion instruments, in particular of bongo drums. It requires electricity to run its factories and this is a major factor of cost impact. There are lots of suppliers of electricity in the market and there is no switching costs if Togo Bongos wanted to switch suppliers. What type of supplier is Togo Bongo's electricity supplier?
Which of the following factors would you use to analyse the macro-environment? Select THREE.
A software developer is seeking to develop a new fitness trends app. They are looking to create a contract with a fitness expert to give advice on the type of changing fitness trends. What agreement should the app developer aim to achieve?
Which of the following are considered value-adding primary activities?
Inbound logistics
Firm infrastructure
Technology development
Marketing and sales
A company is relocating its manufacturing base to a low-cost country and is considering a partnership with a local supplier for its key components rather than a tender process. Although there are some concerns regarding confidentiality and component competitiveness, the procurement director is recommending a partnership strategy to the board of directors. The recommendation is based on a range of advantages including, but not limited to, gaining local market knowledge. Is this a valid recommendation?
A buyer has a requirement to purchase 1,000 widgets for a manufacturing company. The widgets are critical for the next stage of the manufacturing process. What would be the key selection criterion for this buyer?
Under what circumstances should a competitive tender not be completed? Select TWO.
A partnership was created between a company and one of its local suppliers when the managing directors of each company met and thought partnering could be a good idea. No other departments were included in the discussions. The partnership has been in place for over a year, but neither of the companies has achieved any additional benefits. The company has been unable to offer any increased business to the supplier, and the supplier has been unable to improve on the quality of its products. The partnership is going to be terminated. What is a possible main reason for the failure of the partnership?
What are the relationship characteristics of a Partnership?
Significant differences in corporate cultures can lead to the failure of a partnership relationship between two organisations. Is this statement correct?
Which of the following are not a valid reasons to terminate a relationship with a supplier? Select TWO.
A low level of trust between parties can often lead to partnership relationships being unsuccessful and failing. Which of the following supports the protection of commercially sensitive information between both parties and can help to retain trust?
Beyond Say is a manufacturer of diamond rings. It sources a lot of different parts to create its products including diamonds, gold, cardboard boxes for the rings to go in, as well as stationary and copier paper for the offices. Although it doesn't buy many diamonds, these represent a large part of Beyond Say's spend. Which category of spend would diamonds represent?
In the 1990s a company spent a lot of time and money developing a device that you could carry around that could play CDs. The product spent a long time in development but when it was released the sales figures were very disappointing. This was in part due to the fact another product was released at a similar time which had much more developed technology and could play music without the cumbersome size of a portable CD player. Which of the following did the company not consider when developing the product?
Hungry Sandwich Co. produces over 5,000 freshly made sandwiches on-site every day. The main ingredient that Hungry Sandwich Co. buys is bread. It is the item they spend the most money on, and they have a long-term partnership agreement with a local bakery to manufacture and supply fresh bread every morning. Using a supplier positioning matrix, which is the appropriate category for bread for Hungry Sandwich Co.?
Fred is a new procurement manager at a large engineering firm. They procure 100s of components and use these to make kitchen appliances such as kettles and toasters. He has been asked by his manager to look into procuring a new component which will go into a new environmentally friendly kettle and has been asked to ensure that the firm receives value for money. What should Fred do?
Which of the following are possible drivers for partnership sourcing? Select THREE.
Supplier development should be undertaken with all suppliers that a buyer uses. Is this statement TRUE?
Rachel and Jacky work in the procurement department of Foddy Foods Ltd. They have been told by their CEO to build better relationships with strategic suppliers as this will create value for money for the company. In what ways can value for money be achieved by building strong relationships with suppliers? Select TWO.
Is it correct to suggest that the sole objective of partnership sourcing is to achieve the lowest acquisition cost?
Rivalry between suppliers is more likely to be intense in which of the following situations?
A garden centre has recently purchased some lollypop sticks to use as plant labels. The staff have written the name of the plant on the lollypop stick and put it next to the plant. This helps them identify which plant is which. However, after a couple of weeks, the lollypop sticks have become mouldy and the writing has faded. Staff are now struggling to identity their plants. The Manager of the garden centre is considering returning the lollypop sticks and asking for a full refund as they were not fit for purpose. Can the Manager do this?
A supplier wishes to develop a new blood collection system for healthcare but needs to work with a clinical expert to develop the device. Why would a partnership be the best approach?
A manufacturing company which produces showers struggles to get hold of a certain part called a mixer valve. It is impossible to make the showers without the mixer-valve and there is only one supplier in the market that produces them. The good news is they aren't very expensive to buy. What type of supplier is the supplier of mixer valves?
Which of the following would you use to qualify new suppliers? Select THREE.
A medical consumables buyer has adopted a close relationship approach with their suppliers that are considered to be complicated, technical suppliers. Is this the right approach?
Phone Maker Incorporated is a manufacturer of mobile phones. It is considering investing in a partnership with its supplier of batteries and circuit boards as it wishes to produce new models of its phone more regularly. What is the main driver for Phone Maker Incorporated?
Partnership relationships are long-term relationships without a defined end period. Is this statement TRUE?
Harry runs a hotel and has recently decided to contract an external supplier to provide the cleaning of the rooms. What is a disadvantage of doing this?
Red Ltd and Blue Ltd have had a disagreement over a high value project they have been partnering on. They have been unable to resolve the issues inhouse and Red Ltd has suggested Mediation as an option. Is this a good option?
A vehicle company has a partnering relationship with the manufacturer of its engines. The manufacturer is considered a key partner and is already involved in product development at the vehicle company in several strategic projects. The car company and engine manufacturer have integrated systems for a just-in-time (JIT) delivery. Is this an example of a significant integration partnership?
A textile company is purchasing a new item which is low value. This item is likely never to be required again by the company and is widely available from many different suppliers. Which commercial relationship type would be most effective for the buyer to choose?
A large construction group has a critical contract with a brick supplier. This represents high-value spend and the contract has a five-year duration. What type of commercial relationship would be the most appropriate?
Varying levels of commitment is one reason why many partnerships fail. Why is this?
Which circumstances make a buyer more attractive to the supplier?
A partnership relationship can be described as any relationship between a buyer and supplier where there is a good level of communication and both parties are happy with each other’s performance. Is this statement TRUE?
At what stage of the relationship cycle could you use Carter's 10 Cs?
Which of the following would be benefits of partnership sourcing? Select TWO that apply.
Which one of the following is an advantage of early supplier involvement?
‘tail spend’ is a common category used in procurement and describes a category of items. What characteristics do theses items have?
A doctor's surgery requires a complex database system to manage all of its patients data, which is highly sensitive. The system also needs to link to other departments of the health service such as physiotherapy and intensive care. The Manager of the surgery is considering outsourcing the management of the database to an IT company. What is the Manager's main motivation for doing this?
Value for money is often described at the ‘three Es’; economy, efficiency and effectiveness. However some people consider a 4th E which refers to the public sector. What is the fourth E?
The Kraljic Model is most useful for which aspect of procurement?
Which of the following is a valid reason for ending a relationship with a supplier?
When developing a supplier partnership, a buyer can take either a strategic or reactive approach. What would be a reason for a reactive approach?
Construct Builders Ltd works very closely with a supplier called Solid Timber Co on house-building projects. They have a very close working relationship, sharing investment, setting pricing levels, and looking at sharing resources. The two companies also work closely together to set strategic directionsand explore new markets for long-term growth. There is no formal contract in place between the two companies. Using the relationship spectrum, what relationship does this scenario best describe?
Andrew runs a factory that makes cakes. Vanilla Extract is a vital ingredient in Andrew’s cakes and this is a monopolistic market. Andrew has noticed recently that the quality of the supplier’s product has reduced, and this has led to several complaints from customers. Andrew is considering entering into a Partnership with this supplier as he believes this will help increase the supplier’s performance. Is this the correct thing to do?
Which of the following is not a stage in the relationship life-cycle?
Which of the following are primary activities, according to Porter's Value Chain? Select THREE.
Kyle Crant is a procurement director at ATSS Ltd and has introduced a new policy within the procurement function. The policy requires the procurement function to obtain quotations from multiple suppliers if a contract is worth over £10,000. What is the primary aim of this policy?
Which of the following are typical drivers for a partnership between the buyer and the supplier? Select the THREE that apply.
Harry has just entered into a partnership with a key supplier. Although he is excited about the prospect, he thinks it’s a good idea to set some goals and KPIs. Which of the following criteria should Harry use to decide if a KPI is appropriate?
Which of the following are elements of a business that can develop a company's competitive advantage? Select THREE.
Which of the following are correct statements with regards to a joint venture and with regards to a strategic alliance? Select TWO that apply.
Richie has come up with a new idea for sourcing items for the business but feels that it will have mixed reviews within the team. He thinks that some people will be in favour of the idea, and some will beagainst it. He doesn’t think the CEO will have a strong opinion either way. In order to decide whether to put a business case together and present his idea to the CEO- what should Richie do?
Products or services that are more suitable for partnership sourcing match which of the following criteria?
The Managing Director of XYZ Ltd has asked the Procurement Manager to support the engineering team and ensure a new product design is suitable for volume manufacturing. The Procurement Manager arranged a series of meetings with suppliers and its internal development team, the XYZ manufacturing department, and research and development department to get their feedback on the proposed design. What are the activities undertaken by XYZ Ltd called?
Early supplier involvement
Benchmarking
Cross-organisational involvement
Subcontracting
Mandy is looking to source windows and doors for a new build apartment block. She has done some initial research and has discovered that there are many suppliers in the marketplace that can supply the items she needs. As it is a high-value project she is thinking of running a formal tender. What should be Mandy’s first step?
A company supplies IT equipment and buys most of its components from first-tier suppliers in the UK. It wants to analyse its supply market to develop the supply chain and is going to review the main factors that have an influence. The company wants to use the STEEPLED external environmental analysis framework to achieve the best result. Which of the following STEEPLED factors is most likely to have the greatest effect?
Which of the following statements are true of a market place which is considered a 'perfect competition'? Select TWO.
A supermarket is struggling with sales and has done an analysis on its competitors. It has discovered that it has two major competitors; one provides groceries at a much cheaper price and another that provides only organic products. The supermarket has decided that it wants to continue providing groceries to a wide target audience but that it will compete by offering superior customer service. What is the supermarket's source of competitive advantage?
Victoria runs a hotel and has recently had several security issues such as attempted robberies. She has decided that she needs to hire a security firm to ensure these issues don’t continue. She has done some research and has found there are several local security firms who may be able to provide services to her hotel. However, she hasn’t decided exactly what she would require the security firm to do. What should be Victoria’s next steps?
Barry is a procurement manager at Sea Biscuits, a company which manufactures biscuits in the shape of dolphins and starfish. He works in an office that orders stationary regularly for its 100 person workforce. Stationary is a low-spend category item and Barry often orders stationary from different suppliers based on which supplier can provide the item the cheapest at that point in time. According to the Kraljic matrix, what type of suppliers provides stationary to Barry?