L4M6 Exam Dumps - Supplier Relationships

Explanation

The correct answer is ‘greater creativity’. A synergy is the concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts. P.160

Explanation

As the component is vital to their business, ABC should seek a collaborative relationship with the supplier. There are three types of collaborative relationship (co-destiny, partnership and strategic alliance). Of these only strategic-alliance is given as an option. Remember - strategic purchase = collaborative relationship with supplier. There are many questions on the Relationship Spectrum on the exam. See p.5 for more details

Explanation

The three right answers are competing, collaborating and compromising. See the Thomas Kilmann Model on p.87. There are quite a few questions on this in the exam.

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.

In CIPS L4M6, supply risk is analysed alongside financial risk. Expensive and technically complex items are frequently bespoke or highly specialised, meaning that:

There are few alternative suppliers

Switching suppliers is difficult, costly, or impossible

This significantly increases supply risk, not reduces it. While financial risk is high due to value and complexity, supply risk is also high due to dependency and limited market availability.

The incorrect options misunderstand supply risk:

Single sourcing increases supply risk

Easy switching is rarely possible for complex supplies

High-value complex items never carry low combined risk

L4M6 Reference:

Learning Outcome 2: Understand supply chain risk and resilience

Topic: Financial risk vs supply risk

CIPS L4M6 Study Guide – Risk positioning and Kraljic portfolio thinking

Explanation

Pareto is the 80:20 rule- this can be adapted to talk about supplier relationships, where instead of having 2 categories there are now 3 (A B and C). CIPS use the terms Pareto and ABC interchangeably. See p.16 for further information

The primary objective of cost modelling is to dissect and comprehend the components that constitute a supplier's pricing. By understanding the supplier's pricing strategy, the buyer can identify cost drivers, negotiate more effectively, and seek opportunities for cost savings. This approach aligns with the CIPS L4M6 guidelines, emphasizing the importance of transparency and collaboration in supplier relationships.

Early supplier involvement highlights supplier strengths and capabilities, enabling collaborative development. This supports innovation and optimizes the procurement process.