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Question 239 - CSCP discussion

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One key factor to consider when selecting suppliers for their potential to sustain long-term, mutually profitable relationships is:

A.
landed cost.
Answers
A.
landed cost.
B.
quality metrics.
Answers
B.
quality metrics.
C.
operational performance.
Answers
C.
operational performance.
D.
financial viability.
Answers
D.
financial viability.
Suggested answer: D

Explanation:

When selecting suppliers for long-term, mutually profitable relationships, financial viability is crucial because:

Stability: Financially viable suppliers are more likely to be stable and reliable, ensuring continuous supply without interruptions.

Capacity for Investment: Suppliers with strong financial health can invest in technology, innovation, and capacity expansion to meet future demands.

Risk Mitigation: Financially sound suppliers are less likely to face bankruptcy or financial distress, reducing supply chain risks.

Negotiation Leverage: Buyers can negotiate better terms and conditions with financially stable suppliers, ensuring fair pricing and quality.

Support for Growth: Financially viable suppliers can support the buyer's growth plans and collaborate on long-term strategic initiatives.

Monczka, R., Handfield, R., Giunipero, L., & Patterson, J. (2015). Purchasing and Supply Chain Management. Cengage Learning.

Burt, D. N., Dobler, D. W., & Starling, S. L. (2003). World Class Supply Management: The Key to Supply Chain Management. McGraw-Hill.

asked 16/09/2024
Peter Avino
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