CIPS L4M6 Exam - Topic 8 Question 18 Discussion

Actual exam question for CIPS's L4M6 exam

Question #: 18
Topic #: 8

ABC is a company which sources a vital component from a supplier. There are only a few suppliers in the industry and without this component, ABC would not be able to produce their final product. What type of relationship should ABC seek to develop with their supplier?

Aoutsource

Bstrategic alliance

Ctransactional

Darms length

Show Suggested Answer

Suggested Answer: C

The correct answer is 'Sudden changes in the marketplace' -- this is a reason a buyer would be reactive. Reactive is when something happens to you and it forces you to act in a certain way. The other options would be strategic rather than reactive. P. 163

by Shawna at Feb 24, 2023, 08:30 PM

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Gretchen

8 months ago

Surprised they don’t just go arms length with so few options!

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Jani

8 months ago

Wait, why not just a transactional relationship? Seems easier.

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Cecil

9 months ago

Outsourcing seems risky with so few suppliers.

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Mendy

9 months ago

I agree, a strong partnership is key here.

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Paz

9 months ago

Definitely a strategic alliance! They need that supplier.

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Alison

9 months ago

Arms length seems risky given the few suppliers available. I feel like they need a more collaborative approach, but I'm not completely confident.

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Mari

9 months ago

I practiced a similar question, and I think a strategic alliance makes sense because they need to work closely with the supplier to avoid disruptions.

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Demetra

9 months ago

I'm not too sure, but I remember something about transactional relationships being more about short-term gains. That doesn't seem right for ABC.

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Stevie

9 months ago

I think ABC should go for a strategic alliance since they rely heavily on that component. It seems like the best way to ensure stability.

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Marshall

9 months ago

Okay, I've got a strategy - I'll carefully read through each option and think about the minimum requirements mentioned in the question.

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Alesia

9 months ago

I recall there were issues with the residual dividend model that could lead to uncertainty among investors. If that's true, then maybe Neely's plan isn't as beneficial as he believes.

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Major

9 months ago

Hmm, I'm a bit confused on this one. I know RSVP is used for setting up LSPs, but I can't remember the specific message types off the top of my head. I'll have to think this through carefully.

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Chau

10 months ago

This seems like a tricky one. I'll need to think through the different possibilities carefully.

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Kenny

1 year ago

B. strategic alliance. Gotta keep those supplier friends close, you know? ABC can't afford to be on the outs with the only guys who have what they need.

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Gail

1 year ago

A strategic alliance will benefit both ABC and the supplier in the long run.

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Bambi

1 year ago

It's important for ABC to work closely with the supplier to ensure a steady supply of the vital component.

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Darnell

1 year ago

Agreed, maintaining a good relationship with the supplier is crucial for ABC's production.

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Cordelia

1 year ago

ABC should definitely aim for a strategic alliance with their supplier.

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Fernanda

1 year ago

Arms length? More like 'arm and a leg' for ABC if they don't develop a stronger relationship with their supplier. They're playing with fire here.

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Zachary

1 year ago

Maybe ABC should consider forming a long-term contract with the supplier to secure their supply chain.

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Curt

1 year ago

I agree, having a strong relationship with the supplier can help ensure a stable supply of the vital component.

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Wynell

1 year ago

ABC should definitely seek to develop a strategic partnership with their supplier.

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Inocencia

1 year ago

Transactional relationship? Psh, that's just asking for trouble. ABC needs to have a deeper connection with their supplier to keep that supply chain locked down.

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