L4M6 Exam Questions & Answers
Supplier Relationships • CIPS
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Sample L4M6 Questions
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A partnership relationship in portfolio analysis is appropriate for which category of procurement?
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In the context of portfolio analysis, particularly using the Kraljic Matrix, procurement items are categorized based on their profit impact and supply risk.Strategic criticalitems are those with high profit impact and high supply risk. These items are vital to the organization's operations and often have limited suppliers, making them critical to secure.
For such items, developing apartnership relationshipis appropriate. This involves close collaboration, mutual trust, and long-term commitment between the buyer and supplier to ensure reliability, innovation, and continuous improvement.
'Strategic items are high value and high risk... The buyer should seek to develop a partnership relationship with the supplier.'--- CIPS L4M6 Study Guide
When using competitive forces theory, suppliers are powerful in which of the following situations? Select THREE that apply.
Suppliers gain power when their products have limited substitutes, are highly differentiated, or when switching costs are high. These factors reduce buyer leverage and increase supplier influence, as described in Porter's Five Forces model.
Which of the following is a stage in the relationship lifecycle?
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The supplier relationship lifecycle comprises several stages that outline the progression of the buyer-supplier relationship. One of these stages isMeasuring, which involves assessing the supplier's performance against agreed-upon metrics and key performance indicators (KPIs). This stage is crucial for ensuring that the supplier meets the organization's expectations and for identifying areas for improvement.
'The stages of the relationship life cycle include: Onboarding, Qualification, Segmentation and risk management, Performance management (Measuring), Development and innovation, and Phase-out.'--- CIPS L4M6 Study Guide
Which of the following are correct statements with regards to a joint venture and with regards to a strategic alliance? Select TWO that apply.
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Statement B:A strategic alliance is an agreement between two or more parties to pursue a set of agreed-upon objectives while remaining independent organizations. It is typically managed jointly by the partners to achieve mutual benefits without forming a new legal entity.Wikipedia
Statement C:In a joint venture, two or more parties create a new, separate legal entity by contributing equity, and they share in the revenues, expenses, and control of the enterprise. This new company is formed to undertake specific business activities.
CIPS L4M6 Study Guide
George is running a competition to find a supplier to install solar panels on the roof of his factory. The energy this produces will power some of the machines. Cost is an important factor, but there are also other considerations that are important such as how long the solar panels will last, and the maintenance costs if they ever break. What should George do?
George should use a weighted award criteria -- this will allow him to judge suppliers not only on cost, but also on the quality of their products and whether or not they can provide maintenance. For example George could weight the bids in this way; 40% cost, 30% durability of the panels and 30% maintenance costs. For more information on how weighted award criteria works see p.78
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