Supplier Relationships L4M6 Exam Questions
Varying levels of commitment is one reason why many partnerships fail. Why is this?
Correct Answer: A
The correct answer is ‘It can lead to a lack of trust’ – this is a quote from p.162. The other answers are all incorrect; in a partnership KPIs are joint between the parties– so there wouldn’t be a situation where one party doesn’t fulfil their KPIs. Commitment doesn’t necessarily have a direct correlation with profit so that answer is incorrect. ‘Sufficient time and resources are put in’ is a positive thing, so can’t be a reason who a partnership fails.
In a partnership who is responsible for decision making?
Correct Answer: B
The correct answer is both the supplier and the buyer- joint decision making is a key aspect of partnership relationships. A project steering committee decides on priorities, suggests improvements, conducts audits etc. See p.152
A buying organisation has decided to terminate its partnership with its supplier (FGH). For some time, the supplier has not been proactive in advising when deliveries will be late, which has frustrated the buying organisation. The supply market has historically been limited to a small number of suppliers, but new suppliers have decided that the market is attractive. The buying organisation is now considering setting up a partnership with a new supplier (XYZ) who has recently entered the market. What are the reasons for the buying organisation deciding to terminate its relationship with supplier FGH? Select TWO that apply.
Correct Answer: A, E
Comprehensive and Detailed Explanation:
The buying organisation ' s decision to terminate the partnership with supplier FGH is influenced by:
Changes in the composition of the supply market: The entry of new suppliers into the market provides the buying organisation with more options, reducing dependency on FGH and enabling the pursuit of better partnerships.
Poor communication by the supplier: FGH ' s lack of proactive communication regarding delivery delays has led to frustration, indicating a breakdown in the partnership ' s effectiveness.
These factors align with the principles of supplier relationship management, where effective communication and adaptability to market changes are crucial.
A local government procurement team is undertaking a full review of their current internal working processes. The team of buyers currently have a partnership-style relationship with their routine suppliers. Is this the best relationship style to use?
Correct Answer: A
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.
Significant differences in corporate cultures can lead to the failure of a partnership relationship between two organisations. Is this statement correct?
Correct Answer: A
Comprehensive and Detailed Explanation:
Cultural compatibility is crucial in partnership relationships. Differences in corporate culture can lead to misunderstandings, misaligned objectives, and conflicts, ultimately jeopardizing the partnership ' s success. Therefore, assessing cultural compatibility at the outset is essential.