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NEW QUESTION 41
Lion Manufacturing is about to enter into a partnership with Penguin Logistics, who will provide delivery to and from Lion Manufacturing’s factories and warehouses. In this relationship, what type of negotiation strategy should Lion manufacturing use?

  • A. win: lose with the supplier winning
  • B. lose: lose
  • C. win: lose with the buyer winning
  • D. win: win

Answer: D

Explanation:
partnerships are always win: win p.7

 

NEW QUESTION 42
Which of the following are considered part of the ‘5 Rights of Procurement’? Select THREE.

  • A. place
  • B. quality
  • C. focus
  • D. cost
  • E. time

Answer: A,B,E

Explanation:
The 5 Rights of procurement are; place, quality, quantity, time, price. (Price and Cost are not the same thing). See p.38

 

NEW QUESTION 43
Which of the following statements are true of a market place which is considered a ‘perfect competition’? Select TWO.

  • A. there are no barriers to entry
  • B. suppliers are selling differentiated products
  • C. competition is not strong
  • D. competition is at its highest level possible

Answer: A,D

Explanation:
In a ‘perfect competition’ there are no barriers to entry or exit, and competition is at its highest possible level. For more information on different types of market see p.40

 

NEW QUESTION 44
Lee is a procurement manager at Real Pirates Ltd and he has a contract with Peg Leg Industries for the supply of fake, wooden legs for his team of Pirates. Real Pirates Ltd have been working with Peg Leg Industries for almost 10 years but recently Lee has discovered he will need to terminate the contract due to ‘Contract Frustration’. What could be the reason for this?

  • A. The supplier has committed a material breach
  • B. The supplier has become insolvent
  • C. An unexpected incident has occurred beyond anyone’s control
  • D. The supplier has leaked confidential information about Real Pirates Ltd to a competitor

Answer: C

Explanation:
The correct answer is ‘An unexpected incident has occurred beyond anyone’s control’. A good example of this would be the Covid-19 pandemic- neither the buyer nor supplier could have predicted this, and if this means that the contract can’t be completed – then the contract can be terminated (in the UK at least). A way to avoid this would be to include a Force Majeur clause listing possible circumstances that could occur. When there’s a Force Majeur clause, these eventualities are now classed as foreseen rather than unforeseen. See p.108

 

NEW QUESTION 45
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