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L4M6 Latest Dumps Pdf | L4M6 Study Guide

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CIPS Supplier Relationships Sample Questions (Q108-Q113):

NEW QUESTION # 108
Fashion buyer Kamal Sumai is working closely with a key overseas supplier and is monitoring and forecasting cost volatility within the fabric market. Kamal has decided it is the right time to raise a purchase order with his supplier for a greater quantity of fabric than he currently needs. Kamal is attempting to avoid an imminent price increase. What is this tactic known as?

A. Spot buying
B. Derivative buying
C. Hedging buying
D. Forward buying

Answer: D

Explanation:
Forward buying involves purchasing in advance to lock in current prices and avoid future increases. This strategy is effective in volatile markets where price hikes are anticipated.

NEW QUESTION # 109
A restricted market is a market where there are only a small number of capable and competent suppliers.
Which of the following is not a reason for a marketplace to be restricted?

A. The product is easy to source elsewhere
B. High barriers to entry
C. Low levels of profitability
D. Strong governmental regulation

Answer: A

Explanation:
The correct answer is 'The product is easy to source elsewhere'. The other three are given as reasons a marketplace might be restricted on p.138. Other reasons also include; brand loyalty, difficult access to distribution channels, and companies colluding.

NEW QUESTION # 110
A supermarket is struggling with sales and has done an analysis on its competitors. It has discovered that it has two major competitors; one provides groceries at a much cheaper price and another that provides only organic products. The supermarket has decided that it wants to continue providing groceries to a wide target audience but that it will compete by offering superior customer service. What is the supermarket's source of competitive advantage?

A. cost leadership
B. differentiation focus
C. cost focus
D. differentiation

Answer: D

Explanation:
This is differentiation as the target market is broad. Differentiation focus would be if the supermarket was targeting a niche market. There's a couple of questions on Porter's Generic Strategies in the exam- there's a useful diagram of this on P.13

NEW QUESTION # 111
A company is about to invite tenders for a contract to clean external windows at several premises, all at least three storeys high. It is going to do this in two stages. For the first stage, it will issue a pre-qualification questionnaire (PQQ) and, from the replies, select at least five potential suppliers to invite to tender. Which of the following is a selection criterion rather than an award criterion?

A. Environmental impact assessment
B. Price that will be charged
C. Risk assessments at the premises
D. Method statements for previous contracts

Answer: D

Explanation:
Selection criteria focus on the supplier's capability and experience (e.g., method statements). Award criteria are used to evaluate and compare proposals during the tender process, such as price or environmental considerations.

NEW QUESTION # 112
You work at XYZ manufacturers and a competitor has just released a rival washing machine to the product that you make. This model is proving popular with customers. What competitive force is at play?

A. threat of substitution
B. supplier power
C. threat of new entrant
D. buyer power

Answer: C

Explanation:
This is a threat of a new entrant. The competitor has now entered the washing machine market and is competing directly with you. This is not a threat of substitution as it is the same product. A substitution would be if they invented a new product that washed clothes and people started buying this instead of washing machines. There are many questions in the exam on Porter's 5 Forces - see p. 39

NEW QUESTION # 113
......

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