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L4M6 Supplier Relationships Questions and Answers

Questions 4

Kirsty is designing a specification for a new contract and wants to include some qualitive KPIs for the new supplier, as well as quantitative. Which of the following could she include? Select TWO.

Options:

A.

Deliveries in full and on time

B.

Information sharing

C.

Trust

D.

Cost savings

E.

Early supplier involvement

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Questions 5

A competitive advantage can be gained by doing what?

Options:

A.

Increasing your prices

B.

Engaging in market research

C.

Building better relationships with primary stakeholders

D.

Completing formal tenders for all buying requirements

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Questions 6

Which of the following is a characteristic of a traditional contracting agreement?

Options:

A.

Emphasis on mutual trust between purchaser and supplier

B.

Emphasis on quality assurance based on zero defects

C.

Emphasis on single source arrangement

D.

Emphasis on short-term business relationships

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Questions 7

Which of the following are considered value-adding primary activities?

    Inbound logistics

    Firm infrastructure

    Technology development

    Marketing and sales

Options:

A.

2 and 4 only

B.

3 and 4 only

C.

1 and 2 only

D.

1 and 4 only

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Questions 8

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?

Options:

A.

Equality

B.

Environment

C.

Equity

D.

Ethics

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Questions 9

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?

Options:

A.

Poor planning

B.

Market changes

C.

Distance barrier

D.

Cultural differences

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Questions 10

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 11

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 12

Robbie is a procurement manager at a public sector organisation. He is running a tender which is worth £2m and so will advertise this on OJEU. His manager has reminded Robbie to include CPV codes on the tender. What purpose would this serve?

Options:

A.

To ensure suppliers know the deadline for tender submission

B.

To ensure suppliers can find the opportunity

C.

To ensure more suppliers bid for the tender

D.

To ensure only qualified suppliers bid for the tender

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Questions 13

Which of the following are correct statements with regards to a joint venture and with regards to a strategic alliance? Select TWO that apply.

Options:

A.

A strategic alliance creates a new company formed between the partners

B.

A strategic alliance is managed by both partners

C.

In a joint venture, a new company is formed between the partners

D.

A joint venture is also known as vertical integration

E.

A strategic alliance is a permanent arrangement

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Questions 14

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 15

In an oliogopy market, what would a regulator do?

Options:

A.

prevent price fixing and collusion

B.

stop the market becoming a monopoly

C.

ensure value for money for buyers

D.

ensure health and safety standards

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Questions 16

Which of the following relationship types require the most investment from the buyer?

Options:

A.

partnership

B.

strategic alliance

C.

single source

D.

adversarial

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Questions 17

Which of the following are examples of ways in which businesses can add value? Select THREE that apply.

Options:

A.

Through delivering excellent service

B.

Creating a win-win price

C.

Product features and benefits

D.

Reducing customer service levels

E.

Investing in customers

F.

Offering convenience

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Questions 18

Which of the following are the stages of team development?

Options:

A.

Starting, forming, benchmarking, performing

B.

Forming, storming, norming, performing

C.

Beginning, working, reviewing, performing

D.

Introducing, forming, managing, performing

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Questions 19

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 20

Which of the following is not a type of tender process used in the Public Sector?

Options:

A.

Restricted

B.

Competitive Procedure with Negotiation

C.

Competitive Dialogue

D.

Unrestricted

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Questions 21

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?

Options:

A.

Strategic

B.

Leverage

C.

Non-critical

D.

Bottleneck

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Questions 22

Joseph works as a category manager for a large electricity supply company. His company is one of six electricity companies in the country. All have a high annual spend on the same specifications of cable. There are only five cable manufacturers capable of supplying the cables. Joseph has established all the suppliers use the same raw materials using the same types of manufacturing lines. Prices tendered by all suppliers are very similar. After paying for the cable, Joseph’s company spends an additional 25% on moving and installing the cable. In order to enable Joseph to gain advantage over the other electricity companies, which type of supplier relationship should he adopt?

Options:

A.

Single-sourced

B.

Closer tactical

C.

Transactional

D.

Partnership

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Questions 23

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 24

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?

Options:

A.

Use a weighted award criteria

B.

Only invite suppliers he knows will be able to provide good quality products which won’t break

C.

Run a separate tender for a company who can provide reactive maintenance to the solar panels

D.

Evaluate the bids on price only as this is an important factor

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Questions 25

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?

Options:

A.

A non-disclosure agreement

B.

An authorised business case

C.

Early supplier involvement

D.

A business continuity plan

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Questions 26

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 27

What are the relationship characteristics of a Partnership?

Options:

A.

Short-term focus and one-off transactions

B.

An adversarial relationship

C.

Sharing ideas and risk

D.

Focus on price competitiveness

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Questions 28

Which of the following relationship types are characterised by low levels of trust? Select TWO options

Options:

A.

Adversarial(Correct)

B.

Arm's Length

C.

Outsourced

D.

Single- Sourced

E.

Partnership

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Questions 29

Which of the following are typical drivers for a partnership between the buyer and the supplier? Select the THREE that apply.

Options:

A.

The buyer has a high spend with the supplier

B.

There are many suppliers in the market

C.

The product is critical for the buyer

D.

The product is a commodity

E.

The product is technically complex

F.

The supplier provides the product to a buyer's competitor

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Questions 30

National Hospital Trust (NHT) has entered into a partnership relationship with a major facilities management provider. The two organizations have agreed on the approach to undertake regular reviews and audits. The audit approach will include which of the following?

Options:

A.

Category management and supplier rationalization

B.

Specification development and management

C.

Lessons learned and continuous improvement

D.

Macro and micro environmental analysis

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Questions 31

Which circumstances make a buyer more attractive to the supplier?

Options:

A.

Where the brand profile is high

B.

When the buyer negotiates longer credit terms

C.

Where the buyer exercises a stringent code of conduct

D.

When the buyer is very procedural in its systems

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Questions 32

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 standardised. Is this TRUE or FALSE?

Options:

A.

False, the product is in a supply market which is highly complex and the product is of low importance

B.

False, the product is in a supply market which is highly complex and the product is of high importance

C.

True, the product is in a supply market which is of low complexity and the product is of high importance

D.

True, the product is in a supply market which is of low complexity and the product is of low importance

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Questions 33

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.?

Options:

A.

Non-critical

B.

Bottleneck

C.

Abundant

D.

Strategic

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Questions 34

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 35

When a large organization partners with a small supplier to develop new technology, it is necessary for regular communication. Is this statement true?

Options:

A.

No, because partnerships do not require regular communication during development of new technology

B.

Yes, because partnerships require regular communication to succeed in meeting mutual objectives

C.

Yes, because a small supplier must be told what to do and when, because they have fewer employees

D.

No, because regular communication will stop a small supplier from doing their work

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Questions 36

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

Options:

A.

They can lead to poor supplier performance

B.

They pull focus from the more important quantitative KPIs

C.

They are hard to measure

D.

They make the buyer seem weak

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Questions 37

‘tail spend’ is a common category used in procurement and describes a category of items. What characteristics do theses items have?

Options:

A.

High value, low volume

B.

High value, high volume

C.

Low value, high volume

D.

Low value, low volume

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Questions 38

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 39

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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Questions 40

The Pareto Principle is sometimes also known as what?

Options:

A.

Five Forces

B.

JIT

C.

ABC Analysis

D.

Cost Engineering

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Questions 41

In a partnership who is responsible for decision making?

Options:

A.

The project steering committee

B.

Both the supplier and the buyer

C.

The buyer

D.

The supplier

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Questions 42

Products or services that are more suitable for partnership sourcing match which of the following criteria?

Options:

A.

1 and 2 only

B.

2 and 3 only

C.

1 and 3 only

D.

2 and 4 only

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Questions 43

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?

Options:

A.

No, it is an example of a less time-intensive partnership

B.

No, as there is a short-term focus on the relationship

C.

Yes, as this is an example of a target costing approach

D.

Yes, because it includes elements of joint product development

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Questions 44

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 45

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 46

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

Options:

A.

Procurement

B.

Operations

C.

Marketing and Sales

D.

Human Resources

E.

Inbound Logistics

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Questions 47

Which of the following options are legitimate reasons for terminating a contract? Select TWO that apply.

Options:

A.

You ordered 10,000 items instead of 1,000

B.

One of the contracted parties has clearly failed to perform its duties

C.

There has been a serious breach of contract terms

D.

Your internal stakeholder requested the wrong items

E.

Your MRP system placed a replenishment order that you do not need

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Questions 48

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

Options:

A.

Over-processing

B.

Stockout

C.

Equity

D.

Transportation

E.

Inventory

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Questions 49

Jenny is a procurement manager who works in the public sector. She has been charged with organising a tender to source new Xray machines for a hospital and to ensure that they receive ‘value for money’. Which of the following should Jenny consider when drafting her ITT?

Options:

A.

Price only

B.

Equity

C.

Whole life costs

D.

Availability

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Questions 50

At what stage of the relationship cycle could you use Carter's 10 Cs?

Options:

A.

on-boarding

B.

qualification

C.

segmentation and risk management

D.

development and innovation

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Questions 51

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

Options:

A.

social, economic and cost

B.

environmental, ethical and cost

C.

political, economic and social

D.

environmental, ergonomic and social

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Questions 52

A buyer is seeking to set up an agreement for one year for the purchase of paper. They complete a tender exercise and supplier X wins the contract, and all other suppliers are told that they will not be needed for the next 12 months. Where would the buyer place supplier X on the relationship spectrum?

Options:

A.

Arms length

B.

Single sourced

C.

Partnership

D.

Transactional

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Questions 53

Significant differences in corporate cultures can lead to the failure of a partnership relationship between two organisations. Is this statement correct?

Options:

A.

Yes, the compatibility of cultures should be considered at the outset

B.

Yes, in a partnership the organisations merge, so the cultures must be the same

C.

No, the organisations can continue to operate separately so this is not an issue

D.

No, it is easy to change corporate culture so the two organisations will align quickly

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Questions 54

Which of the following are examples of internal stakeholders of a manufacturing repair organisation? Select TWO that apply.

Options:

A.

Bank manager

B.

Finance director

C.

Trade union managers

D.

Maintenance engineers

E.

Shareholders

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Questions 55

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?

Options:

A.

Yes, as the items are of high financial risk

B.

No, as there is often a supply risk with items offered

C.

Yes, as all the items supplied are off the shelf

D.

No, as there are only a small number of suppliers in the marketplace

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Questions 56

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

Options:

A.

social

B.

cultural

C.

political

D.

philosophical

E.

legislative

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Questions 57

Which of the following are advantages of partnering?

Options:

A.

Supply chain consolidation

B.

Continual improvement

C.

Hard to displace

D.

Prioritization of transactions

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Questions 58

A category buyer, managing an outsourcing project, is aware of the commercially sensitive nature of the project and wishes to adopt an accommodating approach to managing conflict amongst key stakeholders. Is this the correct approach?

Options:

A.

No, as the category manager has a low concern for others and a low concern for themselves

B.

Yes, as the category manager has a high concern for others and a high concern for themselves

C.

No, as the category manager has a high concern for themselves and low concern for others

D.

Yes, as the category manager has a low concern for themselves but high concern for others

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Questions 59

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

Options:

A.

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

B.

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

C.

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

D.

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

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Questions 60

Value for money in the private sector is concerned with what?

Options:

A.

Getting the best price possible

B.

Shareholder profit and business benefit

C.

Ensuring taxpayers’ money is spent wisely

D.

Getting the best quality possible

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Questions 61

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 fewsuppliers 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 62

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

Options:

A.

1 and 2 only

B.

3 and 4 only

C.

2 and 3 only

D.

1 and 3 only

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Questions 63

Rivalry between suppliers is more likely to be intense in which of the following situations?

Options:

A.

1 and 2 only

B.

2 and 4 only

C.

1 and 3 only

D.

1 and 4 only

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Questions 64

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 65

Under what circumstances should a competitive tender not be completed? Select TWO.

Options:

A.

When the items are of high value

B.

When the items are of low value

C.

When there is a clear specifications

D.

When there is not a clear specification

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Questions 66

Which of the following are advantages for the buyer of early supplier involvement with the buyer's product development team?

Options:

A.

1 and 2 only

B.

1 and 3 only

C.

2 and 3 only

D.

2 and 4 only

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Questions 67

Supplier development should be undertaken with all suppliers that a buyer uses. Is this statement TRUE?

Options:

A.

yes- it is important to develop all relationships

B.

yes- this will improve efficiencies for the buyer

C.

no- supplier development should only be done with strategic suppliers

D.

no- supplier development should only be done with tactical suppliers

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Exam Code: L4M6
Exam Name: Supplier Relationships
Last Update: Jul 3, 2025
Questions: 226

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