CIPS L4M5 Exam - Topic 6 Question 70 Discussion

Actual exam question for CIPS's L4M5 exam

Question #: 70
Topic #: 6

Which of the following are most likely to turn buying organisation into an unattractive customer in supplier's perspective? Select TWO that apply.

ADemands for kickback

BReduced paperwork in procurement processes

CAdopting clear and concise CSR policies

DUnclear tender award criteria

EUsing SRM technology

Show Suggested Answer

Suggested Answer: A

The analysis of cost into fixed and variable enables organisations to determine their break-even point (BE) - the point where total revenue from sales and total cost exactly balance. All costs need to be covered by sale revenue in order for a company to make a profit. If you know your fixed costs and your variable costs then you can work out the minimum quantity of goods or services you need to sell to break even. Break even point is measured in volume and can be worked out graphically or via formulae:

Price - Variable costs = Contribution

Break even point (volume) = Fixed expenses/Contribution margin per unit

In this scenario, the break even point (Q) is: 270,000/(180-126) = 5,000

To make a profit, the supplier needs to sell more than 5,000 units per month.

The BE point is thus an important determinant of flexibility of pricing for suppliers. Before BE is achieved there will be much greater reluctance to offer price concessions to customers than after BE is achieved.

LO 2, AC 2.1

by Sonia at Sep 16, 2024, 01:46 PM

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6 months ago

Totally agree with A! No one wants to deal with shady demands.

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Latonia

6 months ago

Wait, are we really saying CSR policies are bad? That seems off.

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Micheline

6 months ago

A is a no-brainer, but I’m not so sure about D. Isn’t clarity usually a good thing?

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Hannah

7 months ago

I think B could also be a problem. Less paperwork might mean less accountability.

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Carma

7 months ago

Definitely A and D. Kickbacks are a huge red flag!

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Charlette

7 months ago

I feel like adopting clear CSR policies is actually a positive thing, so I don't think that would make them unattractive.

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Georgeanna

7 months ago

Reduced paperwork seems like it could be a good thing, but I guess it might raise concerns for suppliers. I'm torn on that one.

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Norah

7 months ago

I remember a practice question about unclear tender award criteria being a red flag for suppliers. That could be one of the answers.

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Wilda

8 months ago

I think demands for kickbacks would definitely make a buying organization unattractive, but I'm not sure about the second option.

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Carmela

8 months ago

I feel confident about this one. Demands for kickbacks and unclear tender criteria are clear red flags that would make a buyer unattractive to suppliers. Those are my two choices.

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Vonda

8 months ago

Reduced paperwork and using SRM technology don't seem like they would be issues for suppliers. I'm going to focus on the options that indicate unethical or opaque practices.

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Ula

8 months ago

Okay, let's see. Demands for kickbacks and unclear tender award criteria seem like they would definitely make a buyer less attractive. I'll go with those two.

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Kenneth

8 months ago

Hmm, I'm a bit unsure about this one. I'll need to carefully consider each option and think about how they could impact a supplier's perspective.

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Denny

8 months ago

This question seems straightforward, but I want to make sure I understand the key factors that make a buying organization unattractive to suppliers.

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Douglass

1 year ago

Demands for kickbacks? What is this, the mafia? That's an instant deal-breaker for any reputable supplier.

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Bette

1 year ago

Using SRM technology? Sounds like a smart move to optimize the supplier relationship. I'd be happy to work with a customer like that.

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Kaitlyn

12 months ago

C) Adopting clear and concise CSR policies

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Annmarie

12 months ago

A) Demands for kickback

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Jamal

1 year ago

Unclear tender award criteria? Oh boy, that's a recipe for frustration and mistrust. Not a good look for the customer.

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Donte

11 months ago

True, having clear CSR policies and using technology can make a customer more attractive to suppliers.

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Latanya

11 months ago

Using SRM technology

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Audria

11 months ago

C) Adopting clear and concise CSR policies

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Twana

11 months ago

B) Reduced paperwork in procurement processes

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Dierdre

12 months ago

Yeah, unclear tender award criteria can definitely lead to frustration and mistrust.

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Gwenn

12 months ago

D) Unclear tender award criteria

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Karl

1 year ago

A) Demands for kickback

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Naomi

1 year ago

Clear and concise CSR policies? That's a plus in my book. Suppliers want to work with responsible organizations.

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Polly

12 months ago

D) Unclear tender award criteria

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Loise

1 year ago

A) Demands for kickback

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Lisbeth

1 year ago

I believe C) Adopting clear and concise CSR policies and E) Using SRM technology would make a buying organization more attractive to suppliers.

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Lacresha

1 year ago

I agree with Charlie. Demands for kickback show unethical behavior, and unclear tender award criteria can lead to unfair practices.

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Barbra

1 year ago

Reduced paperwork? That's a win-win! Suppliers love streamlined processes. Wish more customers would adopt that.

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Scarlet

1 year ago

C) Adopting clear and concise CSR policies

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Scarlet

1 year ago

B) Reduced paperwork in procurement processes

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Luis

1 year ago

D) Unclear tender award criteria

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Earleen

1 year ago

A) Demands for kickback

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Dusti

1 year ago

Demands for kickbacks? Really? That's just unethical and a huge red flag for any supplier. Definitely one to avoid.

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Charlie

1 year ago

I think A) Demands for kickback and D) Unclear tender award criteria would turn a buying organization into an unattractive customer.

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