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L4M6 Supplier Relationships Questions and Answers

Questions 4

Sandra is a buyer for a large supermarket and has been increasing unhappy with the performance of a long-term supplier of bananas. Over time the deliveries have become unreliable and this has had impacts on the supermarket’s profitability. What should Sandra do first?

Options:

A.

Obtain business approval to terminate the contract

B.

Develop an exit strategy

C.

Review the market and look for an alternative supplier

D.

Give written notice to the supplier of plans to terminate

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Questions 5

In which procurement process is a PQQ not issued?

Options:

A.

Open

B.

Restricted

C.

Competitive Procedure with Negotiation

D.

Competitive Dialogue

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Questions 6

Which of the following are NOT one of the four key principles of procurement in the EU?

Options:

A.

Transparency

B.

Value for Money

C.

Non-Discrimination

D.

Proportionality

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Questions 7

A company has just hired a new cleaning firm to clean their offices. The specification for the clean was detailed in an appendix in the contract and included a list of pre-approved products that the cleaning firm should use. The cleaners that were sent to site had not read the contract and therefore did not use the appropriate products. What is the reason for the failure of this?

Options:

A.

Poor communication

B.

Miscommunication

C.

Distortion of the facts

D.

Communication overload

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Questions 8

What is collaborative inertia?

Options:

A.

the concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts

B.

A situation when the apparent output from collaboration is considerably less than expected

C.

When a partnership is unable to create new ideas

D.

Where a third party is invited to join a partnership.

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Questions 9

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?

Options:

A.

The supplier is an expert in their field

B.

This will result in economies of scale

C.

This will free-up internal resources

D.

This will result in cost-savings

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Questions 10

In Public Sector procurement a PIN is sent out to inform suppliers of an upcoming tender opportunity. What does PIN stand for?

Options:

A.

Prior Information Notice

B.

Procurement Information Number

C.

Procurement Identification Number

D.

Possibilities Identified Notice

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Questions 11

Which of the following are recognised organisational culture types? Select THREE

Options:

A.

Power

B.

Role

C.

Person

D.

Knowledge

E.

Team

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Questions 12

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?

Options:

A.

strategic

B.

leverage

C.

routine

D.

bottleneck

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Questions 13

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?

Options:

A.

Option

B.

Option

C.

Option

D.

It isn't possible to tell

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Questions 14

Lion Manufacturing is about to enter into a partnership with Penguin Logistics, who will provide delivery to and from Lion Manufacturing's factories and warehouses. In this relationship, what type of negotiation strategy should Lion manufacturing use?

Options:

A.

win: win

B.

win: lose with the supplier winning

C.

lose: lose

D.

win: lose with the buyer winning

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Questions 15

Tim manages the procurement department at a large retailer. He wants to ensure that his team are achieving value for money in their procurement activities. Which of the following should Tim set up?

Options:

A.

ITT

B.

Audit

C.

Framework

D.

Contract

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Questions 16

Achieving value for money can often be described as the three Es? What are these?

Options:

A.

Ethics, Environment, Economy

B.

Economy, Efficiency, Environment

C.

Efficiency, Economy, Ethics

D.

Effectiveness, Efficiency, Economy

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Questions 17

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?

Options:

A.

Keep satisfied, keep informed, minimal effort, no effort

B.

Manage closely, manage loosely, keep satisfied, keep informed

C.

Minimal effort, manage closely, keep informed, keep satisfied

D.

Keep informed, keep happy, keep satisfied, keep notified

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Questions 18

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

Options:

A.

They are likely to be able to gain price stability

B.

There may be greater continuity of supply

C.

They will gain an increased volume of business

D.

The supplier may become complacent

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Questions 19

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?

Options:

A.

Yes- mediation involves a neutral third party and gets both parties to attempt to reach a compromise

B.

Yes- mediation means the buyer and supplier agree to accept a third party’s decision which will solve the disagreement issues

C.

No- it would be better to solve the disagreement in-house

D.

No- mediation could have a negative impact on the companies’ reputation

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Questions 20

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

Options:

A.

Forming

B.

Mourning

C.

Achieving

D.

Adjourning

E.

Accepting

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Questions 21

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

Options:

A.

commitment

B.

clean

C.

collection

D.

cost

E.

call

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Questions 22

Debbie is a procurement manager at a small manufacturer company. She had a contract in place with a company that provides uniforms, but finds that she doesn’t need to order much from them as the staff re-wear the same clothes to work. The contract has now expired. Should Debbie do a Competitive Tender to source a new contract?

Options:

A.

Yes – the contract has now expired so she must do a new competitive tender

B.

Yes- competitive tender is the only option to procure uniforms

C.

No- the contract is not of significant value

D.

No- Debbie should continue using the same supplier- it doesn’t matter that the contract has expired.

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Questions 23

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?

Options:

A.

leverage

B.

strategic

C.

routine

D.

Bottleneck

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Questions 24

Which of the following behaviours are you likely to see in a Partnership relationship?

Options:

A.

Opportunistic behaviour and strong levels of trust

B.

Strong levels of trust and honest communication

C.

Honest communication and opportunistic behaviour

D.

Secrecy and honest communication

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Questions 25

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?

Options:

A.

Yes- the lollypop sticks have gone mouldy- this is unacceptable

B.

Yes- so long as the manager kept the receipt

C.

No- as this was not the lollypop sticks intended purpose

D.

No- the manager cannot prove that the product is faulty

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Questions 26

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.

Options:

A.

end-users

B.

legal department

C.

customers

D.

suppliers

E.

employees

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Questions 27

Which of the following are Intellectual Property Rights that you would you encounter in procurement and supply contracts? Select THREE.

Options:

A.

Method Statements

B.

Risk Assessments

C.

Patents

D.

Copywrite

E.

Trademark

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Questions 28

Lee is a procurement manager at Real Pirates Ltd and he has a contract with Peg Leg Industries for the supply of fake, wooden legs for his team of Pirates. Real Pirates Ltd have been working with Peg Leg Industries for almost 10 years but recently Lee has discovered he will need to terminate the contract due to ‘Contract Frustration’. What could be the reason for this?

Options:

A.

The supplier has committed a material breach

B.

An unexpected incident has occurred beyond anyone’s control

C.

The supplier has become insolvent

D.

The supplier has leaked confidential information about Real Pirates Ltd to a competitor

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Questions 29

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?

Options:

A.

Using several suppliers instead of one

B.

Batch ordering

C.

Sharing up-to-date information

D.

Issuing POs electronically.

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Questions 30

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

Options:

A.

economies of scale

B.

access to capital

C.

licences and permits

D.

health and safety

E.

ethical sourcing

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Questions 31

In a monopoly market, which of the following statements is true?

Options:

A.

bargaining power of suppliers is strong

B.

bargaining power of buyers is strong

C.

There is strong rivalry

D.

There is a threat of new entrants

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Questions 32

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

Options:

A.

Forming, storming, norming, performing

B.

Forming, norming, performing, storming

C.

Storming, forming, performing, norming

D.

Storming, forming, norming, performing

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Questions 33

Innovation is a key consideration when entering into a partnership. Is this statement true?

Options:

A.

Yes- joint innovation projects are often a strong motivation for entering into a partnership

B.

Yes- innovation is the only reason to enter into a partnership

C.

No- the key consideration when entering a partnership is cost reduction

D.

No- innovation is best achieved in a contractual relationship where KPIs can be monitored closely.

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Questions 34

Janet runs a factory which produces 1 million bread rolls every day. It requires a large amount of flour, and for this to be delivered regularly- in time with manufacturing operations. There are very few suppliers in the market place that can deliver the quality of flour Janet requires in the quantities required. Janet has just established a contract with Friendly Flour Limited - what type of supplier is Friendly Flour Limited to Janet?

Options:

A.

bottleneck

B.

strategic

C.

routine

D.

leverage

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Questions 35

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?

Options:

A.

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

B.

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

C.

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

D.

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

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Questions 36

A supplier is working with a buyer who represents a large percentage of his business. Without this particular buyer, the supplier would likely go out of business. There has been a dispute in the last invoice which the buyer is not happy about. What technique should the supplier use when talking to the buyer about this?

Options:

A.

Competing- the supplier needs to earn more money as they are struggling financially

B.

Avoiding- the supplier should avoid talking with the buyer as this may result in conflict

C.

Accommodating- the supplier should show a large degree of co-cooperativeness as the buyer is important to their survival

D.

Accepting – the supplier should accept that conflict should sometimes occur in buyer: supplier relationships and work hard to avoid them

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Exam Code: L4M6
Exam Name: Supplier Relationships
Last Update: Nov 23, 2024
Questions: 180
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