CIPS Exam L4M5 Topic 13 Question 69 Discussion

Actual exam question for CIPS's L4M5 exam

Question #: 69
Topic #: 13

An automotive company purchases high quality steel to produce components. The steel is an important raw material and the contract value is enormous. They sources the steel from oversea and contact some potential suppliers. One of the potential suppliers invites the procurement team to their premise for a new business opportunity. Should the procurement team accept the invitation?

ANo, because negotiating over telephone is enough to collect information on supplier's capability

BYes, because the visit would increase the buyer's bargaining power

CYes, because this is an opportunity to assess the supplier's capacity

DNo, because the travel would incur unnecessary costs

Show Suggested Answer

Suggested Answer: C

In the scenario, the value of contract as well as the importance of purchased item justify the procurement's travel. Visiting a supplier at their HQ or operational facility may facilitate the procurement team in assessing, albeit briefly, the culture of the organisation, how busy they seem and how staff engage with each other. A visit is a good opportunity to assess supplier's capacity.

LO 2, AC 2.2

by Blossom at Sep 13, 2024, 02:25 AM

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Yuki

2 months ago

This is a no-brainer - it's gotta be C. I mean, who doesn't love a good field trip? Just make sure the procurement team brings their comfiest walking shoes. You don't want them to be all cranky and sore during the negotiations.

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Edna

25 days ago

User 3: Plus, it's a good opportunity to build a stronger relationship with the supplier.

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Johanna

29 days ago

User 2: Definitely, it's important to assess their capabilities firsthand.

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Thomasena

1 months ago

I agree, C is the way to go. We need to see the supplier's capacity in person.

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Alva

2 months ago

I'm going with C. You can't just rely on phone calls to evaluate a supplier. Seeing their operation in person is crucial, even if it means a little extra spending. Plus, think of all the free pens and stress balls you might get!

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Ernie

26 days ago

B) Yes, because the visit would increase the buyer's bargaining power

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Deonna

28 days ago

C) Yes, because this is an opportunity to assess the supplier's capacity

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Ashlyn

1 months ago

A) No, because negotiating over telephone is enough to collect information on supplier's capability

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Florencia

2 months ago

But wouldn't negotiating over the phone be more cost-effective?

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Laquanda

2 months ago

D is the right answer. Why waste money on unnecessary travel when you can just do it all over the phone? I bet the supplier is trying to wine and dine the procurement team to distract them from the real issues.

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Troy

1 months ago

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Rory

2 months ago

A) No, because negotiating over telephone is enough to collect information on supplier's capability

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Marica

2 months ago

I agree with Bernadine, visiting the supplier's premise can help assess their capacity.

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Bernadine

2 months ago

I think the procurement team should accept the invitation.

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Jeanice

3 months ago

B is the way to go! A site visit will definitely give the procurement team more leverage in the negotiations. Who cares about the travel cost when you're dealing with a massive contract?

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Hannah

2 months ago

B is the way to go! A site visit will definitely give the procurement team more leverage in the negotiations. Who cares about the travel cost when you're dealing with a massive contract?

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Karrie

2 months ago

C) Yes, because this is an opportunity to assess the supplier's capacity

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Belen

2 months ago

B) Yes, because the visit would increase the buyer's bargaining power

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Audry

2 months ago

A) No, because negotiating over telephone is enough to collect information on supplier's capability

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Mollie

3 months ago

I think the correct answer is C. It's important to assess the supplier's capacity in person to make an informed decision. The travel cost is worth it for such a big contract.

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Regenia

2 months ago

I think it's worth the travel cost to ensure the quality of the steel we are purchasing.

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Edelmira

3 months ago

I agree, it's crucial to see the supplier's capacity firsthand before making a decision.

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