L4M6 Exam Dumps : Supplier Relationships

Explanation

The correct answer is ‘run a restricted competition – send out a PQQ’. This QUESTION NO: tests both your understanding of when to run open and restricted competitions (which is explained on p.75) and your understanding of tender documents. Mandy should run a restricted competition- there are a lot of options in the marketplace and this will allow her to pre-qualify those who best suit her requirements. Running an open competition when there are lots of suppliers would be too time-consuming- you need a way of making a short-list. When you run a restricted competition, the first stage is sending out a PQQ- pre-qualification questionnaire; this document is sent to suppliers asking for necessary information to support their qualification as an approved supplier.

Comprehensive and Detailed Explanation:

Arestricted marketis characterized by:

High entry barriers: Significant capital investment, stringent regulatory requirements, or specialized knowledge needed to enter the market.

Limited profitability: Existing suppliers may operate on thin margins, deterring new entrants.

These factors result in a market with few competent and capable suppliers, limiting competition and options for buyers.

Explanation

The correct answer is ‘They may gain an increased volume of business’. The other options are just not true. See p.130 for advantages and disadvantages of partnerships from both the buyer and supplier’s perspective. This is a hot topic for the exam.