L4M6 Exam Dumps - Supplier Relationships

Comprehensive and Detailed Explanation:

Effective cost modelling is a process that helps in understanding the cost structure of a product or service. It involves:

Data gathering:Collecting relevant data related to materials, labor, overheads, and other cost drivers.

Analysis of facts:Evaluating the collected data to understand cost behaviors and identify areas for cost reduction.

Supplier negotiation and issuing a request for quotation are subsequent steps that may utilize the insights gained from cost modelling but are not part of the modelling process itself.

Early Supplier Involvement (ESI) offers several advantages to buyers:

Shared expertise for problem solving: Engaging suppliers early allows for collaborative problem-solving, leveraging the supplier's specialized knowledge to enhance product development.

Improved understanding of seller capabilities: Early engagement provides insights into the supplier's capabilities, facilitating better alignment with project requirements.

Lower development costs: Collaborative efforts in the early stages can lead to cost savings by identifying efficiencies and reducing the need for later-stage modifications.

These benefits are highlighted in the CIPS Intelligence Hub:

"ESI can bring significant benefits to your organisation, due to the involvement of suppliers in the initial stages of product development... Here are some additional benefits that your organisation will see when adopting ESI... Helps to reduce cost... Integrates supplier capabilities in the manufacturers supply chain..."

— CIPS Intelligence Hub: Early Supplier Involvement

Price management is crucial for low-cost retailers to maintain profitability. This includes negotiating better pricing, managing costs effectively, and ensuring competitive pricing for volume sales.

Routine suppliers typically supply low-value, low-risk items. Maintaining partnerships in such cases is inefficient since alternative suppliers are readily available. Adopting a transactional or adversarial relationship would be more appropriate.

Explanation

The correct answer is ‘They are hard to measure’ p.103

A partnership relationship allows Joseph to collaborate with suppliers on cost savings in manufacturing, logistics, and installation, providing a competitive edge over rival companies.

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.

For partnership sourcing to succeed, senior management buy-in is essential. Selling the idea internally ensures commitment of resources, trust, and long-term strategy alignment. Options A and D undermine partnerships, while B contradicts the open and collaborative nature of partnership sourcing.