CIPS L4M6 Supplier Relationships Online Training

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1. When developing a supplier partnership, a buyer can take either a strategic or reactive approach .

What would be a reason for a reactive approach?

You discover that the supplier has a high profit margin

The buyer wishes to create a new product and requires input from a supplier

Sudden changes in the marketplace

It will allow for consolidation in the supply chain

2. What is a disadvantage of including qualitative KPIs into a contract?

They can lead to poor supplier performance

They pull focus from the more important quantitative KPIs

They are hard to measure

They make the buyer seem weak

3. In Public Sector procurement a PIN is sent out to inform suppliers of an upcoming tender opportunity .

What does PIN stand for?

Prior Information Notice

Procurement Information Number

Procurement Identification Number

Possibilities Identified Notice

4. Brian Air is a company that is trying to break into the air transport market .

Which of the following could be barriers to entry for Brian Air? Select THREE

economies of scale

access to capital

licences and permits

health and safety

ethical sourcing

5. Which of the following documents would you expect a supplier to submit as part of a Request for Proposal? Select THREE

Full pricing information

Liquidity Ratio

Risk Assessments

Method Statements

Gearing Ratio

6. Mendelow’s Stakeholder Matrix categorises stakeholders into four groups and provides insight into how these stakeholders should be managed .

What is a limitation to using this Matrix to categorise stakeholders?

Nowadays, Stakeholders fall into more than four categories

The Matrix doesn’t consider the power these stakeholders have

The Matrix doesn’t consider whether the stakeholder is for or against the activity

The categories are hard to remember

7. Which of the following are possible drivers for partnership sourcing? Select THREE.

The protection of intellectual property rights

The marketplace has become more volatile

Working together will create synergies

The need to improve performance to satisfy the end customer To increase production costs and lead-times

8. 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?

The supplier is an expert in their field

This will result in economies of scale

This will free-up internal resources

This will result in cost-savings

9. What is the correct order of the stages of team development?

Forming, storming, norming, performing

Forming, norming, performing, storming

Storming, forming, performing, norming

Storming, forming, norming, performing

10. Which of the following statements are true of a market place which is considered a 'perfect competition'? Select TWO.

there are no barriers to entry

suppliers are selling differentiated products

competition is at its highest level possible

competition is not strong

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11. 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?

Option

It isn't possible to tell

12. Early Supplier Involvement can be described as a collaborative relationship between a buyer and a supplier to develop a new project. Handfield’s model describes four different levels of supplier involvement ranging from none to ‘black box’ (which is when the design is primarily driven by the supplier .

What other level features on this model?

Blue Box C when the buyer creates the product without input from the supplier

Red Box- when the supplier provides legal advice to the buyer on areas such as copywrite

White Box C when there is informal integration and the buyer consults with a supplier on a design

Grey Box C when the involvement is buyer driven

13. Grey Stone Memorial Hospital is a private medical facility which has an idea for a vaccine to a deadly disease, but does not have the capacity to make the vaccine itself. It is

considering partnering with a well-known pharmaceutical company in order to bring the vaccine to market .

What is the biggest risk to Grey Stone?

Intellectual Property Rights

Increased Costs

Low quality product

Uninformed stakeholders

14. Danny is procuring a new IT software, which he doesn’t know much about. He has done a bit of research on the internet but is still unsure how much he can expect to pay .

What should be Danny’s next step?

Issue a RFI

Issue a RFQ

Issue an ITT

Issue an OJEU

15. According to Mendelow, there are four ways stakeholders can be managed, depending on the amount of power they have, and how interested they are in your project .

What are these four categories?

Keep satisfied, keep informed, minimal effort, no effort

Manage closely, manage loosely, keep satisfied, keep informed

Minimal effort, manage closely, keep informed, keep satisfied

Keep informed, keep happy, keep satisfied, keep notified

16. In public sector procurement, tenders are advertised with CPV codes, which provide a reference to describe the product or service being tendered .

What does CPV stand for?

Condensed Procurement Vocabulary

Common Procurement Vocabulary

Complete Procurement Vocabulary

Clear Procurement Vocabulary

17. Which of the following would you use to qualify new suppliers? Select THREE.

commitment

clean

collection

cost

call

18. Intellectual Property Rights (IPR) include items such as copywrite and trademarks. A buyer is considering entering into a partnership with their supplier to create a new product which will be released in two years’ time. Should IPR be included into a contract between partners?

Yes- IPR should always remain with the buyer- this will protect those rights

Yes- IPR is a valid concern for both parties but will survive the termination of the agreement

No- a separate legal agreement should be created to cover IPR

No- a contract is not necessary if it is a partnership.

19. Which of the following are advantages for the buyer of entering into a partnership? Select

TWO.

They are likely to be able to gain price stability

There may be greater continuity of supply

They will gain an increased volume of business

The supplier may become complacent

20. David is sourcing a new cleaning contract as he is not impressed with his current cleaning company’s performance. He believes that his current supplier has been overcharging him, and due to budget cuts, he is keen to secure a lower price than what he is paying now. His Manager has suggested using an e-auction as the procurement method.

Is this the correct way forward?

Yes- an e-auction is an electronic system so it will be easy for David to compare bids

Yes- an e-auction will allow David to secure the lowest possible price

No- a reverse e-auction would be more suitable as it will secure the lowest price

No- a reverse e-auction will ensure only high quality suppliers bid for the opportunity

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21. A competitive advantage can be gained by doing what?

Increasing your prices

Engaging in market research

Building better relationships with primary stakeholders

Completing formal tenders for all buying requirements

22. Which of the following are considered ‘wastes’ which can be removed from a business? Select THREE.

Over-processing

Stockout

Equity

Transportation

Inventory

23. Agile Cars Ltd is creating a ‘lean’ business model which involves receiving deliveries of components only when they are required .

Which of the following ‘wastes’ is being removed from the business?

Transportation

Defects

Over-production

Inventory

24. Gabriel is a procurement manager who wishes to explore a new avenue to procure products for his company. His manager has told him that he should invite internal stakeholders to a meeting to get their feedback. Who should Gabriel invite? Select THREE.

end-users

legal department

customers

suppliers

employees

25. The Queen Victoria is a traditional British pub which serves a range of alcoholic beverages. It has a partnership relationship with a local brewery which supplies several types of beer and cider. Logistics is a key concern for the Queen Victoria as deliveries must be made when there is room in the cellar to store the barrels of beer and cider. In what ways could the logistics risk be reduced?

Using several suppliers instead of one

Batch ordering

Sharing up-to-date information

Issuing POs electronically.

26. One of the fist stages of designing a Partnership is to come up with joint KPIs. These

should be:

Measurable, achievable and time-bound

Relatable, specific and measurable

Time bound, difficult and relevant

Significant, measurable and achievable

27. Which of the following are not stages of team development? Select TWO.

Forming

Mourning

Achieving

Adjourning

Accepting

28. Varying levels of commitment is one reason why many partnerships fail .

Why is this?

It can lead to a lack of trust

One party doesn’t fulfil their KPIs

Sufficient time and resources are put in

Less profit is made.

29. The CEO of a business has asked his procurement manager to source new machinery for the factory. This machinery will help create a new line of products which will give the company a competitive edge. The CEO is heavily invested in this procurement activity as profits have been lower than expected this year and this new line of products could help increase profitability .

How should the procurement manager include the CEO in the procurement activity?

It is important to keep the CEO informed of all decisions that are made

It is important to keep the CEO satisfied as he runs the business

The CEO is a key player- so it is important he is involved early in the process

The CEO is a key player- so should be given regular updates on progress

30. In the public sector, there are many sources of information that a buyer can use to identify a suitable supplier .

Which of the following could be used? Select THREE

Intranet

Tradeshows

OJEU

Internal stakeholders’ knowledge

Procurement Platforms

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31. The Kraljic Model is most useful for which aspect of procurement?

category management

cost analysis

risk management

cost reduction

32. The Public Sector in the UK is unable to enter into formal partnership relationships with any supplier. Is this statement TRUE?

Yes- the Public Sector is regulated by EU procurement regulations which prohibits this

Yes- the Public Sector is unable to enter partnerships because they operate in a monopoly market

No- the Public Sector can enter into partnership relationships with suppliers providing they have tendered the opportunity

No- the Public Sector can enter into partnership relationships when contracts are over the threshold value.

33. Which of the following is an advantage for the suppler of entering into a partnership with a buyer?

They may gain an increased volume of business

There is more flexibility when selling the product

The Intellectual Property Rights of the buyer become yours

They no longer have to try as hard to win business.

34. What is value mapping?

Analysing the costs that go into making a product

Creating value through the elimination of waste and operational inefficiencies

Segmenting suppliers based on the value they bring to the company

Make vs Buy decision

35. Which of the following are valid strategies for dealing with conflict? Select THREE

Competing

Collecting

Contesting

Compromising

Collaborating

36. 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?

This allows staff to focus on other areas

There is dependency on the supplier, which increases risk

The supplier will not perform as well as an internal team

This will be more expensive than providing the service in house

37. Which of the following macro-environmental factors can affect supply chains?

social, economic and cost

environmental, ethical and cost

political, economic and social

environmental, ergonomic and social

38. Polly Manufacturing is a company which manufactures bicycle parts. It has several factories around the country and is one of the leading suppliers of wheels, bells and pedals.

Which of the following is Polly Manufacturing likely to outsource? Select TWO options.

Manufacturing of all bicycle parts

Manufacturing of bells only

Facilities Management

Cleaning

39. Which of the following factors would you use to analyse the macro-environment? Select THREE.

social

cultural

political

philosophical

legislative

40. Which of the following are primary activities, according to Porter's Value Chain? Select THREE.

Procurement

Operations

Marketing and Sales

Human Resources

Inbound Logistics

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