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NEW QUESTION 23
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?

• A. Grey Box - when the involvement is buyer driven
• B. White Box - when there is informal integration and the buyer consults with a supplier on a design
• C. Red Box- when the supplier provides legal advice to the buyer on areas such as copywrite
• D. Blue Box - when the buyer creates the product without input from the supplier

Answer: B

Explanation:
The Handfield ESI model is on p.98 and comprises of Black Box, Grey Box, White Box and None. Therefore Red and Blue can be automatically discounted. The correct answer is White Box as the definition given is correct. Grey Box is a formalised supplier integration; joint development activity between buyer and supplier. I have no idea why Handfield calls his system after coloured boxes- but it's only briefly mentioned in the study guide and is not likely to be a big topic in the exam.

NEW QUESTION 24
Tim manages the procurement department at a large retailer. He wants to ensure that his team are achieving value for money in their procurement activities. Which of the following should Tim set up?

• A. Audit
• B. Contract
• C. Framework
• D. ITT

Answer: A

Explanation:
Tim should do an audit. P.71 of the textbook says "to ensure that a procurement department is achieving value for money, an audit should be undertaken"

NEW QUESTION 25
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?

• A. Only invite suppliers he knows will be able to provide good quality products which won't break
• B. Evaluate the bids on price only as this is an important factor
• C. Run a separate tender for a company who can provide reactive maintenance to the solar panels
• D. Use a weighted award criteria

Answer: D

Explanation:
George should use a weighted award criteria - this will allow him to judge suppliers not only on cost, but also on the quality of their products and whether or not they can provide maintenance. For example George could weight the bids in this way; 40% cost, 30% durability of the panels and 30% maintenance costs. For more information on how weighted award criteria works see p.78

NEW QUESTION 26
In a partnership who is responsible for decision making?

• A. The buyer
• B. Both the supplier and the buyer
• C. The supplier
• D. The project steering committee

Answer: B

Explanation:
The correct answer is both the supplier and the buyer- joint decision making is a key aspect of partnership relationships. A project steering committee decides on priorities, suggests improvements, conducts audits etc. See p.152

NEW QUESTION 27
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