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The bargaining strength of suppliers is likely to be high in which of the following situations? Select TWO that apply:

A.

The buyer is educated on supply markets

B.

There is a limited number of suppliers in relation to buyers

C.

The buyer is large in size relative to the supplier

D.

The buyer spend is a high proportion of a supplier's revenue

E.

The buyer requirement is urgent

Robert is a buyer at Pickton's Farm Products (PFP), a manufacturer of food products that are sold to supermarkets. Robert will be sourcing from local farmers to supply PFP with raw materials for PFP's products. What is a major supply chain risk that Robert needs to be aware of which is specific to this market?

A.

The quality of goods received by PFP may be of varying quality and need to be returned to the supplier for replacement

B.

A supplier may deliver an incorrect quantity of materials to PFP, leading to PFP incurring storage charges

C.

Extreme or unexpected weather conditions may affect the supplier's ability to supply PFP in line with quantity and timing requirements

D.

Suppliers to PFP may also supply other customers which they prioritise over PFP, leading to delays in PFP's production process

A market has a considerable number of buyers and suppliers. Analysis of the market reveals that loyalty from buyers is relatively low and switching to alternative providers is commonplace. Which of the following market characteristics is supporting this type of buyer behaviour?

A.

Supplier bargaining strength

B.

Barriers to market entry

C.

Increasing use of technology

D.

The availability of substitute products

CP Group places emphasis on the following business objectives:

Responsive production processes to react quickly to market changes

Collaboration and technological integration

New products launched and on sale very quicklyWhich of the below business markets does CP Group belong to?

A.

Construction

B.

Financial

C.

Retail

D.

Agriculture

An organisation's procurement team is in the best position to make the following contribution to the specification development process, to ...

A.

Ensure that the views of the suppliers are given priority over those of other stakeholders

B.

Provide the supply market perspectives, in terms of the potential suppliers and alternative solutions

C.

Argue in favour of using conformance specifications, instead of performance specifications

D.

Provide advice that the economic order quantity is the most important factor in the drafting of specifications

Which of the following are 'secondary sources' of data for costs and prices?

Industry press

Published economic indices

Trade fairs

Buyer's database on market data

A.

1 and 2 only

B.

2 and 3 only

C.

1 and 4 only

D.

3 and 4 only

Which of the following will help the bargaining strength of a buyer?

    The buyer has the option to make the product in-house

    There are a limited number of suppliers available to the buyer

    The buyer’s switching costs are high

    The buyer’s spend is a high proportion of the supplier’s revenue

A.

1 and 2 only

B.

2 and 4 only

C.

1 and 4 only

D.

2 and 3 only

The bargaining strength of suppliers is likely to be high in which of the following situations? (Select TWO)

A.

The buyer’s spend is a high proportion of the supplier’s revenue

B.

The buyer’s requirement is urgent

C.

The buyer is educated on supply markets

D.

The buyer is large in size relative to the supplier

E.

There is a limited number of suppliers in relation to buyers

To improve the productivity, Plantation Ltd is planning to purchase a tractor, which it has never bought before. The project must be quick to catch up with the next growing season. Leanne, a jun-ior procurement staff at the company, assumes that she could skip market analysis stage to save time. Is this assumption reasonable?

A.

No, the company assesses supplier's performance solely based on market analysis

B.

Yes, Leanne just needs to purchase the tractor from her friend's company

C.

No, market analysis will inform the company of the pricing as well as latest technology trends

D.

Yes, the company has extensive experience in purchasing tractor

Over the life of a product, which of the following would be considered non-value-adding costs?

Rework costs

Production costs

Maintenance costs

Waste disposal costs

A.

1 and 2

B.

2 and 3

C.

3 and 4

D.

1 and 4