CIPS Exam L4M5 Topic 13 Question 69 Discussion

Actual exam question for CIPS's L4M5 exam

Question #: 69
Topic #: 13

[All L4M5 Questions]

In preparation for holding negotiation meetings with existing suppliers, category manager Stephen would like to appraise the bargaining strength of his organisation. Which of the following are examples of buyer power? Select TWO that apply:

AAbility to easily switch suppliers

BSuppliers are limited in number

CCollusion between competitor suppliers

DBuyer is large in size relative to suppliers

EHigh barriers of entry exist for new suppliers

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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Gracia

5 days ago

Haha, C is a good one! Collusion between suppliers would definitely work in Stephen's favor. Gotta love when the competition works together... against themselves!

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Beckie

5 days ago

I'm not sure about D. I think E could also be an example of buyer power because high barriers of entry for new suppliers can give the buyer more control.

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