CORE Exam Dumps - Supply Management Core Exam

Entering into a strategic alliance would strengthen the business relationship and enhance future collaboration between GHI, Inc., and DEF Company. A strategic alliance involves a long-term partnership where both companies work together to achieve mutual goals. This alliance would ensure better communication, shared goals, and enhanced trust, making it more likely that innovations such as DEF's new battery capacity extension would be communicated and leveraged effectively. It formalizes the commitment to collaboration and innovation, leading to more proactive sharing of critical developments. References:

Chopra, S., & Meindl, P. (2019). Supply Chain Management: Strategy, Planning, and Operation. Pearson.

Articles on strategic alliances in supply chain management from Harvard Business Review.

The first step in developing a negotiation plan is to engage with the internal customer and other internal stakeholders to identify their needs and wants, as well as educate them on how supply management can add value in the negotiation process. Understanding internal requirements and gaining alignment with stakeholders is crucial before analyzing risks (Option B), reviewing logistics strategies (Option C), or identifying payment terms (Option D). This step ensures that the negotiation strategy is aligned with organizational objectives and stakeholder expectations.

References:

Negotiation and Dispute Resolution in Supply Chain Management by Victor P. Olorunniwo

Procurement and Supply Chain Management by Kenneth Lysons and Brian Farrington

Documenting Negotiations: Maintaining detailed records of each stage of the negotiation process ensures transparency and accountability.

Justification for Concessions: Documentation provides a clear rationale for any concessions made during negotiations, supporting internal review and approval processes.

Consistency: Ensures that all team members are informed and that the negotiation strategy is consistently applied.

Post-Negotiation Analysis: Helps in reviewing the negotiation process to identify areas for improvement and lessons learned for future negotiations.

References

ISM. (n.d.). Best Practices in Negotiation Documentation.

CIPS. (n.d.). The Importance of Documentation in Procurement Negotiations.

The finance department should deny the claim of hard savings because comparing the initial bid to the final negotiated price reflects cost avoidance, not actual cost reduction. True cost savings would require a reduction in expenses year-over-year, demonstrating a tangible decrease in costs. Without this year-over-year reduction, the savings reported are considered cost avoidance, as they represent avoided expenses rather than reduced costs. References: Cost management and accounting principles, especially those related to cost avoidance and cost savings in financial reporting.

Using the weighted-point approach, the scores for each category are weighted and totaled for each supplier as follows:

Supplier A: (40% * 3) + (20% * 5) + (20% * 5) + (20% * 4) = 1.2 + 1.0 + 1.0 + 0.8 = 4.0

Supplier B: (40% * 4) + (20% * 3) + (20% * 3) + (20% * 4) = 1.6 + 0.6 + 0.6 + 0.8 = 3.6

Supplier C: (40% * 5) + (20% * 4) + (20% * 3) + (20% * 4) = 2.0 + 0.8 + 0.6 + 0.8 = 4.2

Supplier D: (40% * 4) + (20% * 4) + (20% * 5) + (20% * 4) = 1.6 + 0.8 + 1.0 + 0.8 = 4.2

Since Suppliers C and D both score 4.2, the tie is broken using factors related to employee resources. Supplier D scores higher in these categories, making Supplier D the best performer. References: Supplier performance evaluation methods, weighted-point evaluation model, tie-breaking criteria in procurement.