Free L4M6 Exam Braindumps (page: 12)

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Beyond Say is a manufacturer of diamond rings. It sources a lot of different parts to create its products including diamonds, gold, cardboard boxes for the rings to go in, as well as stationary and copier paper for the offices. Although it doesn't buy many diamonds, these represent a large part of Beyond Say's spend.
Which category of spend would diamonds represent?

  1. Option
  2. Option
  3. Option
  4. It isn't possible to tell

Answer(s): A

Explanation:

This is category 'A' spend in the ABC model - they represent a large value and a small number of purchases / suppliers. See p.17 for more information on the ABC Analysis



The Kraljic Model is most useful for which aspect of procurement?

  1. category management
  2. cost analysis
  3. risk management
  4. cost reduction

Answer(s): A

Explanation:

The Kraljic model "plays a key part in category management" p.19 of the textbook. Category Management = the spend in an organisation, broken down into categories of related products (e.g. IT, facilities management, marketing). Each of these categories could be plotted on the Kraljic Matrix.



Togo Bongos is a manufacturer of percussion instruments, in particular of bongo drums. It requires electricity to run its factories and this is a major factor of cost impact. There are lots of suppliers of electricity in the market and there is no switching costs if Togo Bongos wanted to switch suppliers.
What type of supplier is Togo Bongo's electricity supplier?

  1. strategic
  2. leverage
  3. routine
  4. bottleneck

Answer(s): B

Explanation:

This is a leverage supplier on the Kraljic Matrix; high cost impact and low risk impact. The diagram on p.20 gives the example of utility services such as electricity as a common leverage supplier. There are lots of questions on Kraljic in the exam - do revise this topic and ensure you understand each of the four quadrants of the matrix



Janet runs a factory which produces 1 million bread rolls every day. It requires a large amount of flour, and for this to be delivered regularly- in time with manufacturing operations. There are very few suppliers in the market place that can deliver the quality of flour Janet requires in the quantities required. Janet has just established a contract with Friendly Flour Limited - what type of supplier is Friendly Flour Limited to Janet?

  1. bottleneck
  2. strategic
  3. routine
  4. leverage

Answer(s): B

Explanation:

Friendly Flour Ltd is a strategic supplier; this is a critical supplier, responsible for core products. They represent a high risk impact and a high cost impact. This is the top-right hand corner of the Kraljic matrix. There are lots of questions on Kraljic in the exam - do revise this topic and ensure you understand each of the four quadrants of the matrix (see p.20)



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