ISM CORE Exam With Confidence Using Practice Dumps

The best course of action for DEF, Inc. is to issue a revision to the current RFI, listing alternate methods and conditions acceptable in demonstrating financial health. This approach accommodates the concerns of both publicly traded and privately held suppliers, ensuring a fair and inclusive process. It maintains the requirement for financial health demonstration while providing flexibility in how suppliers can meet this requirement.

References:

"Request for Proposal: A Guide for Effective RFP Process" by Bud Porter-Roth.

Guidelines on RFIs and RFPs from the National Institute of Governmental Purchasing (NIGP).

"Procurement Principles and Management" by Peter Baily, David Farmer, Barry Crocker, and David Jessop.

Supplier Request for Price Increase: Despite a low survey rating and stable market prices, the supplier requests a price increase.

Engaging the Supplier: Reviewing survey results and discussing them ensures that the supplier understands the buyer’s concerns and expectations.

Economic Factors: Discussing economic factors provides a clearer picture of whether the price increase is justified.

Collaborative Approach: This method fosters a collaborative relationship and seeks to address underlying issues before making pricing decisions.

References

ISM. (n.d.). Managing Supplier Performance Reviews.

CIPS. (n.d.). Effective Supplier Relationship Management.

To determine how many units JKL, Inc. needs to buy to justify changing suppliers, the following steps are taken:

Calculate the Cost Savings per Unit:

Current supplier cost per unit: X

New supplier cost per unit: X - $0.03

Savings per unit: $0.03

Determine the Transition Cost:

Transition cost to the new supplier: $12,000

Calculate the Break-Even Point:

The break-even point is when the total savings equal the transition cost.

Savings per unit × Number of units = Transition cost

$0.03 × Number of units = $12,000

Number of units = $12,000 / $0.03

Number of units = 400,000

Therefore, JKL, Inc. needs to buy 400,001 units to justify changing suppliers, as the 400,000 units would only cover the transition cost, and any additional units would result in actual savings.

References:

Cost-benefit analysis in supply chain management.

Break-even analysis principles in procurement decisions.