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Question 64 - CSCP discussion

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Which of the following benefits of supplier relationship management typically results from collaboration with a few critical suppliers?

A.
Automation of supplier sales activities
Answers
A.
Automation of supplier sales activities
B.
Elimination of formal contracts
Answers
B.
Elimination of formal contracts
C.
Reduction in customer and supplier inventories
Answers
C.
Reduction in customer and supplier inventories
D.
Standardization of communications
Answers
D.
Standardization of communications
Suggested answer: C

Explanation:

Supplier relationship management (SRM) emphasizes collaboration with key suppliers, which can lead to significant inventory reductions. The detailed explanation includes:

Collaborative Planning: Working closely with critical suppliers to synchronize production schedules and inventory levels, aligning them with actual demand.

Improved Forecasting: Sharing accurate demand forecasts and sales data helps suppliers plan their production more effectively, reducing the need for safety stock.

Just-in-Time (JIT) Practices: Implementing JIT practices where materials and components are delivered precisely when needed, minimizing inventory holding costs for both the customer and the supplier.

Lean Practices: Adopting lean inventory management techniques to eliminate waste, streamline processes, and enhance overall supply chain efficiency.

Dyer, J. H., & Singh, H. (1998). The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage. Academy of Management Review, 23(4), 660-679.

Christopher, M. (2016). Logistics & Supply Chain Management. Pearson UK.

asked 16/09/2024
Gudni Hauksson
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