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1. Joseph works as a category manager for a large electricity supply company. His company is one of six electricity companies in the country. All have a high annual spend on the same specifications of cable. There are only five cable manufacturers capable of supplying the cables. Joseph has established all the suppliers use the same raw materials using the same types of manufacturing lines. Prices tendered by all suppliers are very similar. After paying for the cable, Joseph’s company spends an additional 25% on moving and installing the cable.

In order to enable Joseph to gain advantage over the other electricity companies, which type of supplier relationship should he adopt?

2. The executive board of a manufacturing company is requesting support from the procurement team because the company needs to improve its levels of profitability. After segmenting the overall spend by value and risk of supply, the senior buyer for the company is planning to undertake a cost modelling activity. This will be undertaken with a cross-organisational team of internal stakeholders and key strategic suppliers.

What would be the buyer's initial objective from the cost modelling activity?

3. A company purchases products from a supplier that falls into the 'strategic' segment of the supply positioning grid. They are drawing up a formal partnership agreement with the supplier. The supplier views the company as core to their business.

What would be an important clause to include in the agreement to help make sure the partnership worked in a fully collaborative way?

4. ‘tail spend’ is a common category used in procurement and describes a category of items.

What characteristics do theses items have?

5. Which circumstances make a buyer more attractive to the supplier?

6. National Hospital Trust (NHT) has entered into a partnership relationship with a major facilities management provider. The two organizations have agreed on the approach to undertake regular reviews and audits.

The audit approach will include which of the following?

7. A vehicle company has a partnering relationship with the manufacturer of its engines. The manufacturer is considered a key partner and is already involved in product development at the vehicle company in several strategic projects. The car company and engine manufacturer have integrated systems for a just-in-time (JIT) delivery.

Is this an example of a significant integration partnership?

8. Closer tactical, leverage and joint ventures

9. Francisco has entered a partnership with Pedro, who is a key supplier, and wants to ensure that the partnership achieves all of Francisco’s goals.

As well as qualitative and quantitative KPIs, what other measures could Francisco take to ensure the partnership is a success?

10. Grey Stone Memorial Hospital is a private medical facility which has an idea for a vaccine to a deadly disease, but does not have the capacity to make the vaccine itself. It is considering partnering with a well-known pharmaceutical company in order to bring the vaccine to market.

What is the biggest risk to Grey Stone?

11. Andrew runs a factory that makes cakes. Vanilla Extract is a vital ingredient in Andrew’s cakes and this is a monopolistic market. Andrew has noticed recently that the quality of the supplier’s product has reduced, and this has led to several complaints from customers. Andrew is considering entering into a Partnership with this supplier as he believes this will help increase the supplier’s performance.

Is this the correct thing to do?

12. An automotive company has hired Tom as the procurement manager. Tom is to manage a team of two people who have worked in the department for a number of years. Conflict exists between the two members of staff due to an overlap of responsibilities.

Which of the following processes would be most appropriate for Tom to use to reduce this conflict?

13. A buyer is intending to purchase a new product for their business; however, the market has a large number of suppliers.

What would be the most beneficial way for them to initially narrow down the supply options?

14. A local council requires facilities management services for ten schools based in their region. This service is a high spend, high risk, critical contract.

Which sourcing approach would be the most appropriate?

15. Phone Maker Incorporated is a manufacturer of mobile phones. It is considering investing in a partnership with its supplier of batteries and circuit boards as it wishes to produce new models of its phone more regularly.

What is the main driver for Phone Maker Incorporated?

16. ABC is a company which sources a vital component from a supplier. There are only a few suppliers in the industry and without this component, ABC would not be able to produce their final product.

What type of relationship should ABC seek to develop with their supplier?

17. In the 1990s, a manufacturer of portable music players partnered with a mini-disk producer. The aim of the partnership was to reduce the size and cost of the devices and enhance flexibility. Sales of the product after launch were low due to a competitive launch of small digital players, which offered better flexibility to customers at a comparable price. The partners suffered substantial loss and never recovered the investment.

In order to mitigate the risk described, what should both partners have considered before investing in the product? Select the TWO that apply.

18. Which of the following would be benefits of partnership sourcing? Select TWO that apply.

19. Which of the following are possible drivers for partnership sourcing? Select THREE.

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

21. The Public Sector in the UK is unable to enter into formal partnership relationships with any supplier.

Is this statement TRUE?

22. A manufacturing company which produces showers struggles to get hold of a certain part called a mixer valve. It is impossible to make the showers without the mixer-valve and there is only one supplier in the market that produces them. The good news is they aren't very expensive to buy.

What type of supplier is the supplier of mixer valves?

23. Value for money in the private sector is concerned with what?

24. A garden centre has recently purchased some lollypop sticks to use as plant labels. The staff have written the name of the plant on the lollypop stick and put it next to the plant. This helps them identify which plant is which. However, after a couple of weeks, the lollypop sticks have become mouldy and the writing has faded. Staff are now struggling to identity their plants. The Manager of the garden centre is considering returning the lollypop sticks and asking for a full refund as they were not fit for purpose.

Can the Manager do this?

25. 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?

26. George is running a competition to find a supplier to install solar panels on the roof of his factory. The energy this produces will power some of the machines. Cost is an important factor, but there are also other considerations that are important such as how long the solar panels will last, and the maintenance costs if they ever break.

What should George do?

27. When overcoming stakeholder resistance in a procurement-led project, which of the following groups would have the highest level of influence on other stakeholders?

A. Negative leaders

B. Silent opponents

C. Supporters

D. Promoters

A. 2 and 3 only

B. 1 and 4 only

C. 1 and 2 only

D. 3 and 4 only

28. A partnership was created between a company and one of its local suppliers when the managing directors of each company met and thought partnering could be a good idea. No other departments were included in the discussions. The partnership has been in place for over a year, but neither of the companies has achieved any additional benefits. The company has been unable to offer any increased business to the supplier, and the supplier has been unable to improve on the quality of its products. The partnership is going to be terminated.

What is a possible main reason for the failure of the partnership?

29. If a stakeholder has high power in a business but isn’t interested in your procurement activity, what should be your management style for dealing with this stakeholder?

30. Price fluctuations can affect profitability. Is this statement correct?

31. Security company ARLA has recently won a new contract for guarding a school. Another company, ENA, has previously been providing the contract and employed the current guard who has worked at the school for 5 years.

What key legal issue needs to be considered when the current relationship is terminated and the new company takes over?

32. Red Manufacturing work with around 40 different suppliers. One of these suppliers is Blue Business. Red Manufacturing order regularly from Blue Business, and have never had any issues with their performance. The materials Blue Business supply are of low value and there are several other suppliers of these materials in the market.

What type of relationship should Red Manufacturing seek to have with Blue Manufacturing?

33. When a large organization partners with a small supplier to develop new technology, it is necessary for regular communication. Is this statement true?

34. Early Supplier Involvement can be described as a collaborative relationship between a buyer and a supplier to develop a new project. Handfield’s model describes four different levels of supplier involvement ranging from none to ‘black box’ (which is when the design is primarily driven by the supplier.

What other level features on this model?

35. Which of the following is an advantage for the suppler of entering into a partnership with a buyer?

36. Laura is working with suppliers on the design of a component for a new boiler. One of the current suppliers suggested manufacturing the component from plastic they recently developed and patented, rather than commonly used brass.

What competitive force is this supplier creating in the market to affect competition?

37. A partnership relationship in portfolio analysis is appropriate for which category of procurement?

38. A competitor develops an alternative type of vacuum cleaner to one produced by your organization.

Is this an example of the threat of substitutes, one of the five forces of competition described by competitive forces theory?

39. Which of the following are NOT one of the four key principles of procurement in the EU?

40. When developing a supplier partnership, a buyer can take either a strategic or reactive approach.

What would be a reason for a reactive approach?

41. Mendelow’s Stakeholder Matrix categorises stakeholders into four groups and provides insight into how these stakeholders should be managed.

What is a limitation to using this Matrix to categorise stakeholders?

42. 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.

43. A confectionery company has a portfolio of different items to sell. Their most popular product is the chocolate brownie cake, but they have begun to trial sales of cereal bars, granola cereal, and chewing gum. As a high-quality producer in a competitive market, the company requires effective supplier sourcing arrangements.

Which ONE of the following product lines would be the most suitable for partnership sourcing?

44. In a partnership who is responsible for decision making?

45. A company producing a product that attracts a premium price charge

46. Improving its knowledge of the local market

47. A low level of trust between parties can often lead to partnership relationships being unsuccessful and failing.

Which of the following supports the protection of commercially sensitive information between both parties and can help to retain trust?

48. Which of the following are recognised organisational culture types? Select THREE

49. Achieving value for money can often be described as the three Es? What are these?

50. According to Mendelow, there are four ways stakeholders can be managed, depending on the amount of power they have, and how interested they are in your project.

What are these four categories?

51. In a monopoly market, which of the following statements is true?

52. Which of the following would you use to qualify new suppliers? Select THREE.

53. Under which circumstances would a partnership sourcing approach be used?

54. A textile company is purchasing a new item which is low value. This item is likely never to be required again by the company and is widely available from many different suppliers.

Which commercial relationship type would be most effective for the buyer to choose?

55. In the Purchasing Portfolio Matrix, a leverage product is a product in a market where it is easy to switch suppliers and the quality is standardised.

Is this TRUE or FALSE?

56. The director of procurement for a global telecommunications firm has segmented their expenditure and has decided to focus on developing relationships with their bottleneck suppliers.

Is this the correct process?

57. What are the relationship characteristics of a Partnership?

58. 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?

59. Which one of the following would constitute a succession issue when terminating a relationship?

60. 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?

61. A supplier is working with a buyer who represents a large percentage of his business. Without this particular buyer, the supplier would likely go out of business. There has been a dispute in the last invoice which the buyer is not happy about.

What technique should the supplier use when talking to the buyer about this?

62. A common reason attributed to many partnerships failing is ...

63. Kyle Crant 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?

64. Which of the following options are legitimate reasons for terminating a contract? Select TWO that apply.

65. Barry is a procurement manager at Sea Biscuits, a company which manufactures biscuits in the shape of dolphins and starfish. He works in an office that orders stationary regularly for its 100 person workforce. Stationary is a low-spend category item and Barry often orders stationary from different suppliers based on which supplier can provide the item the cheapest at that point in time.

According to the Kraljic matrix, what type of suppliers provides stationary to Barry?

66. When overcoming stakeholder resistance in a procurement-led project, which of the following groups would have the highest level of influence on other stakeholders?

67. What is a disadvantage of including qualitative KPIs into a contract?