L4M6 Exam Dumps - Supplier Relationships

Value for money is achieved through a balance of quality and cost, ensuring that the goods meet performance requirements while being cost-effective, as per procurement best practices.

Explanation

The correct answer is 'arms length'. This is a tactical purchase (as it is low value) and keeping the supplier at arms-length means that Red Manufacturing could possibly exploit them to reduce their prices (think back to the Kraljic matrix and where Blue Business would likely fall). A Partnership or Single- Source relationship requires investment into the relationship, and as the products are low value and Red Manufacturing have a lot of other suppliers, they should not be investing time in developing that relationship with Blue Business. An adversarial relationship wouldn't be advantageous as it may lower the performance of the supplier. See the relationship spectrum on p.5 - this is a hot topic for the exam

Explanation

The correct answer is ‘keep satisfied’ because the stakeholder is high power and low interest. This is the top left corner of Mendelow’s Stakeholder Matrix – see p.81

Explanation

Tail spend items are low value, high volume. P. 132

Comprehensive and Detailed Explanation:

Partnership sourcing is a strategic approach that emphasizes long-term collaboration between buyers and suppliers to achieve mutual benefits. While achieving a competitive acquisition cost is a component, it is not the sole objective. Partnership sourcing also focuses on:

Quality Improvement:Ensuring that products or services meet or exceed quality standards.

Innovation:Collaborating on new product development and process improvements.

Risk Management:Sharing information to anticipate and mitigate risks.

Supply Chain Efficiency:Streamlining processes to reduce lead times and inventory levels.

Therefore, while cost is important, partnership sourcing encompasses a broader range of objectives aimed at creating value for both parties.

Comprehensive and Detailed Explanation:

For high-value and high-risk contracts, such as facilities management services for multiple schools,competitive tenderingis the most appropriate sourcing approach. This process involves inviting multiple suppliers to submit bids, ensuring transparency, fairness, and the opportunity to assess various proposals to select the most suitable supplier. It helps in mitigating risks and achieving value for money.

Explanation

Note the word ‘NOT’ in the question. In order for a competitive tender to be successful, there should be a clear specification in place (i.e. you need to know what you want, in order for suppliers to bid for it). Competitive tendering should also only be used for high value purchases; it’s time consuming to do, so you wouldn’t do it for low value items such as pens for the office. Therefore the correct answer to this question is 'items are of low value' and 'there isn’t a clear specification'. There’s a useful table on p.73 of when you would and wouldn’t use a competitive tender.

Adding value involves enhancing customer experience through excellent service, providing differentiated product features, and offering convenience. These align with procurement strategies aimed at driving customer satisfaction and loyalty.