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Supplier Relationships Questions 46–50 (page: 11)

Updated On: 10-Feb-2026

Hungry Sandwich Co. produces over 5,000 freshly made sandwiches on-site every day. The main ingredient that Hungry Sandwich Co. buys is bread. It is the item they spend the most money on, and they have a long-term partnership agreement with a local bakery to manufacture and supply fresh bread every morning. Using a supplier positioning matrix, which is the appropriate category for bread for Hungry Sandwich Co.?

  1. Non-critical
  2. Bottleneck
  3. Abundant
  4. Strategic

Answer(s): D

Explanation:

Bread is a strategic item due to its high spend and critical role in daily operations. A partnership approach ensures consistent quality and reliability, aligning with strategic supplier management principles.



Kyle Grant is a procurement director at ATSS Ltd and has introduced a new policy within the procurement function. The policy requires the procurement function to obtain quotations from multiple suppliers if a contract is worth over £10,000.
What is the primary aim of this policy?

  1. To deliver an agile process
  2. To ensure value for money is achieved
  3. To allow procurement to select the lowest price
  4. To enable a reduction in competition

Answer(s): B

Explanation:

Obtaining multiple quotations ensures value for money by comparing suppliers based on cost, quality, and other criteria. It promotes competitive pricing and informed decision-making.



Rivalry between suppliers is more likely to be intense in which of the following situations?

  1. 1 and 2 only
  2. 2 and 4 only
  3. 1 and 3 only
  4. 1 and 4 only

Answer(s): B

Explanation:

Intense rivalry occurs when suppliers are equally balanced and face high barriers to exit, leading to aggressive competition to retain market share, as described in Porter's Five Forces model.



A partnership between a software development company and a software supplier has recently been created. In order for the partnership to be successful, what is a critical action to take in the early stages of their relationship?

  1. Define the standards both parties are expected to meet
  2. Look at costing models
  3. Promote the new partnership
  4. Complete audits on the performance of both parties

Answer(s): A

Explanation:

Defining standards ensures clear expectations and provides a foundation for accountability and alignment, which are critical for the success of any partnership.



A comprehensive approach to managing the termination of a contractual relationship would include ...

  1. Attacking the personalities, not the problem
  2. Setting aside the value of existing work done by both parties
  3. Giving qualitative feedback only
  4. Setting remedies and compensation for contractual breaches

Answer(s): D

Explanation:

Effective termination includes remedies and compensation to address any contractual breaches, ensuring fairness and compliance with legal and ethical obligations.



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