Free CIPS L4M6 Practice Exam with Questions & Answers | Set: 6

Explanation

In an oliogopy, supplier power is strong. Sometimes regulators are required in the market to prevent the group of suppliers conspiring together to artificially increase prices. See p.40 for more information on Oligopy markets.

Explanation

Victoria should use a ‘request for proposal’ – this allows the security firms to submit ideas on how best to serve the hotel. They might come up with some ideas that Victoria hasn’t thought about and can price against their own ideas. As Victoria doesn’t have a concrete specification, an ITT or RFQ are not appropriate. A PIN tells suppliers that a tender opportunity is coming up and is used in the Public Sector. A hotel is not a Public Sector organisation. See p.76 for more information on when to issue a Request for Proposal

Comprehensive and Detailed Explanation:

Joint venturesandstrategic alliancesare common forms of partnerships between companies:

Joint Venture:A business arrangement where two or more parties agree to pool their resources for a specific task, creating a new entity.

Strategic Alliance:An agreement between companies to pursue objectives while remaining independent organizations.

"Sole trader," "limited company," and "public limited company" refer to business structures, not partnership arrangements.

The relationship spectrum describes the range of possible supplier relationship types, from arm’s-length transactional relationships to strategic partnerships.

CIPS explains that buyers should segment their supplier base and apply the most appropriate relationship type to:

Maximise value

Manage risk

Allocate resources effectively

The other options describe activities or tools, not the concept of classifying supplier relationships.

L4M6 Reference:

Learning Outcome 3: Understand approaches to managing supplier relationships

Topic: Relationship spectrum and supplier segmentation

CIPS L4M6 Study Guide – Supplier relationship models

Explanation

Equity is the fourth E- this means the extent to which the service is available. See p.65 for details on the 4 Es

Explanation

In a 'perfect competition' there are no barriers to entry or exit, and competition is at its highest possible level. For more information on different types of market see p.40

Comprehensive and Detailed Explanation:

In the Kraljic Matrix, products are categorized based on supply risk and profit impact:

Leverage items:These have a high profit impact but low supply risk. They are often high-expenditure items available from multiple suppliers, allowing the buyer to leverage purchasing power to negotiate better terms.

Given the product has high expenditure and is available from many suppliers, it fits into the 'Leverage' category.

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.

Explanation

Danny should issue a RFI (Request for Information). His next step would be to find out more about the products available by asking suppliers for information- this will help him put a spec together before he goes out to tender. The other options mean; RFQ - request for quotation- when you ask suppliers to submit a price. ITT- Invitation to tender – a document you send out to suppliers which details all the information about the tender (this usually involves both price and quality components of assessment). OJEU- Official Journal of the European Union- where tenders for the Public Sector are published. For more info on RFI see p.74

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.