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CIPS Supplier Relationships Sample Questions (Q177-Q182):

NEW QUESTION # 177
Ranjit Singh is carrying out a procurement exercise for medical gases and has been advised that this is a restricted marketplace. A marketplace may be restricted for which of the following reasons?
* The marketplace is heavily regulated by governments and legislation
* Existing suppliers within the marketplace offer excellent services
* There are many suppliers already in operation within the marketplace
* High financial investment is required to enter the marketplace

A. 1 and 4 only
B. 2 and 4 only
C. 2 and 3 only
D. 1 and 2 only

Answer: A

Explanation:
A restricted marketplace is one where barriers to entry limit the number of suppliers. In L4M6, CIPS identifies two key causes:
* Heavy regulation and legislative controls (e.g. medical gases require safety, licensing, and compliance approvals)
* High capital investment requirements, such as specialised equipment, infrastructure, and certification Offering excellent services or having many suppliers does not restrict a market; these indicate competitive or mature markets.
Therefore, the correct combination is 1 and 4 only.
L4M6 Reference:
* Learning Outcome 1: Understand market structures and supplier positioning
* Topic: Market types and barriers to entry
* CIPS L4M6 Study Guide - Restricted and monopolistic markets

NEW QUESTION # 178
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?

A. No, it does not serve the same purpose
B. Yes, customers may switch to alternative products
C. Yes, there are no barriers to entry; it is an oligopoly
D. No, it is a threat from a new entrant to the market

Answer: B

Explanation:
Substitute products pose a competitive threat by offering alternative solutions to customers, potentially eroding market share. Effective differentiation and customer retention strategies are essential.

NEW QUESTION # 179
Innovation is a key consideration when entering into a partnership. Is this statement true?

A. No- innovation is best achieved in a contractual relationship where KPIs can be monitored closely.
B. No- the key consideration when entering a partnership is cost reduction
C. Yes- joint innovation projects are often a strong motivation for entering into a partnership
D. Yes- innovation is the only reason to enter into a partnership

Answer: C

Explanation:
The correct answer is 'Yes- joint innovation projects are often a strong motivation for entering into a partnership'. The other options are simply not true statements. A lot of the questions on the 'Partnerships' chapters of the book are common-sense questions like this. It involves reading the Question: and using logic, rather that relying on your knowledge of procurement. If you found this Question: easy - that's a good sign for the exam.

NEW QUESTION # 180
Debbie is a procurement manager at a small manufacturer company. She had a contract in place with a company that provides uniforms, but finds that she doesn't need to order much from them as the staff re-wear the same clothes to work. The contract has now expired. Should Debbie do a Competitive Tender to source a new contract?

A. No- the contract is not of significant value
B. Yes - the contract has now expired so she must do a new competitive tender
C. No- Debbie should continue using the same supplier- it doesn't matter that the contract has expired.
D. Yes- competitive tender is the only option to procure uniforms

Answer: A

Explanation:
The correct answer is 'no-the contract is not of significant value'. CIPS state that competitive tenders should only be used when 'the item or service is of significant value' p.73. Debbie could continue using the same supplier, but she should organise a contract extension or a new contract if she does.

NEW QUESTION # 181
In the public sector, there are many sources of information that a buyer can use to identify a suitable supplier. Which of the following could be used? Select THREE

A. Intranet
B. OJEU
C. Tradeshows
D. Internal stakeholders' knowledge
E. Procurement Platforms

Answer: C,D,E

Explanation:
The correct answers are; tradeshows, internal stakeholders' knowledge and e-procurement platforms. Intranet is incorrect as this is an internal system so you wouldn't find information on external suppliers on here the careful not to confuse intranet with internet). OJEU is also incorrect; this is the platform on which tender opportunities in the public sector are published- its not a list of suppliers.

NEW QUESTION # 182
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