CIPS L4M6 - Supplier Relationships

Explanation

The correct answer is Measurable, achievable and time-bound. This is from SMART KPIs on p. 151. Smart stands for specific, measurable, achievable, relevant, time-bound. In the exam they come up in different orders so be careful.

Comprehensive and Detailed Explanation:

In the Supplier Preferencing Model, customers are categorized based on their attractiveness and value to the supplier. A "Nuisance" customer is characterized by low profitability and high maintenance, often requiring disproportionate resources relative to the benefits they provide. Such customers may be deprioritized or even considered for discontinuation by the supplier.

Explanation

The correct answer is ‘Strong levels of trust and honest communication’. The questions on Partnership in the exam tend to be quite straightforward, but if you’re struggling with this see p. 148 for further details of behaviour in Partnerships.

Explanation

The correct answer is ‘no- as this was not the lollypop sticks intended purpose’. When deciding if something is fit for purpose, you must consider its intended and common purpose. In this case it would be for making lollypops. As the garden centre is using them for something other than their intended purpose, they can’t complain if it doesn’t work. Fit for purpose is discussed on p.65 p.s. there’s a QUESTION NO: like this in the real exam – it’s just not lollypop sticks ; )

Comprehensive and Detailed Explanation:

Effective cost modelling is a process that helps in understanding the cost structure of a product or service. It involves:

Data gathering:Collecting relevant data related to materials, labor, overheads, and other cost drivers.

Analysis of facts:Evaluating the collected data to understand cost behaviors and identify areas for cost reduction.

Supplier negotiation and issuing a request for quotation are subsequent steps that may utilize the insights gained from cost modelling but are not part of the modelling process itself.

Explanation

Open Tender processes are a one-stage process which issues and ITT. It has no PQQ (selection) stage. P. 77

Explanation

The correct answer is ‘Building better relationships with primary stakeholders’. This is a direct quote from the start of chapter 2.2: ‘building better relationships with primary stakeholders such as employees, customers, suppliers and communities could lead to increased shareholder wealth by developing a competitive advantage’. The other three options wouldn’t give you a competitive advantage; increasing prices would do the opposite, engaging in market research won’t give you a competitive advantage unless you do something with that research such as implement a change to your business, and completing formal tenders for everything would be a waste of time and resources- there’s no need to tender for low value, low risk items. See p.80

Explanation

Equity is the fourth E- this means the extent to which the service is available. See p.65 for details on the 4 Es

Comprehensive and Detailed Explanation:

When a buyer selects a single supplier for a specific period, such as a one-year contract, and excludes other suppliers during this time, this is referred to as asingle sourcedrelationship. This approach is often used to consolidate purchases, achieve economies of scale, and build a more streamlined procurement process for specific goods or services.

Explanation

The Handfield ESI model is on p.98 and comprises of Black Box, Grey Box, White Box and None. Therefore Red and Blue can be automatically discounted. The correct answer is White Box as the definition given is correct. Grey Box is a formalised supplier integration; joint development activity between buyer and supplier. I have no idea why Handfield calls his system after coloured boxes- but it’s only briefly mentioned in the study guide and is not likely to be a big topic in the exam.