ABC is a company which sources a vital component from a supplier. There are only a few suppliers in the industry and without this component, ABC would not be able to produce their final product.What type of relationship should ABC seek to develop with their supplier?
Answer(s): B
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
Which of the following relationship types require the most investment from the buyer?
Answer(s): A
Partnerships require the most investment out of those listed. The only relationship type that requires more investment than Partnerships is Co-Destiny. See p.9 for more information on this
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?
The reason for outsourcing in this example is that the IT firm is an expert in their field. The requirement is complex and important and this is the reason why it is not being delivered in-house. The other answers given CAN be reasons for out-sourcing, but don't relate to this example. For a full list of reasons a company could use outsourcing see p. 4-5
The Pareto Principle is sometimes also known as what?
Answer(s): C
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
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