In corporate purchasing, competitive scrutiny is typically limited to

How much time should one take to solve questions with similar passage length as this passage? I took 10 mins with all correct answers.

Q1
1. Which of the following best describes the relation of the second paragraph to the first?

Q4
4. It can be inferred that the author of the passage would be most likely to make which of the following recommendations to a company purchasing health care benefits for its employees?

(C) Obtain bids from other providers of health care benefits in order to be in a position to negotiate a better deal with the current provider.

Can someone provide an explanation for Q-3?

There are a couple different things that are important to remember with this question. The first is the particulars of the question. In this instance, the question is asking for the relation of the two paragraphs. This means we have to identify the purpose of each paragraph. And the next thing to remember is that we have to be diligent in our process of elimination. We need to find reasons to eliminate answers and not talk ourselves into answers.

With that in mind, let’s take a look at (B):


The problem is that the first paragraph does not describe a situation. It describes a corporate purchasing strategy, namely competitive scrutiny with “indirect” purchases. Moreover, the second paragraph doesn’t explain an occurrence. It talks about how competitive scrutiny can/cannot be applied in four different situations. For those reasons, we can eliminate (B).

And here’s (C):


As we identified above, the strategy discussed in the first paragraph is competitive scrutiny with “indirect” purchases. The second paragraph then describes how the competitive scrutiny can/cannot be applied in four different situations. This is exactly what is detailed in (C). “To apply” means to put into practice. And the second paragraph discusses how competitive scrutiny with “indirect” purchases can be put into practice. So, (C) is the best answer choice.

One other note on these questions: as we did above, it can be helpful to break down each part of an answer choice. For example, with (B), what exactly is the explanation in the second paragraph? Or with (C), what is the strategy proposed in the first paragraph? Being precise with the answer choices can make it much easier to eliminate incorrect options.

I hope that helps!

Struggling b/w option B & C?
Why it cannot be B? it surely describes a situation in P1.

Question 2

Question 2 asks, "Which of the following can be inferred about supplier partnerships, as they are described in the passage?"

According to the passage, supplier partnerships are "arrangements in which the purchaser forgoes the right to pursue alternative suppliers."

So if firm A enters into supplier partnership with firm B, then firm A commits to purchasing agreed-upon supplies from firm B — and firm A cannot pursue those same supplies from any other firm.

After defining this term, the author spends all of paragraph 2 describing four situations and explaining how firms should think about supplier partnerships within each situation:

1. Many alternatives and change is relatively easy -> Open pursuit of alternatives will likely yield the best results.
2. Many alternatives but change is difficult -> Continuously test the market and use the results to secure concessions from existing suppliers.
3. Few alternatives but change is easy -> Negotiate concessions from existing suppliers.
4. Few alternatives and change is difficult -> Partnerships may be unavoidable.

Now, here's what Choice (E) says about supplier partnerships:


This does NOT match how the author breaks down purchasers' options in paragraph 2.

The breakdown of situations suggests that supplier partnerships are least appropriate in situation 1, where firm A has the most flexibility to dictate the terms of supply (e.g. through frequent competitive bidding).

Change is also easy in situation 3. But does this means that supplier partnerships are just as inappropriate here as they are in situation 1?

Nothing in the passage implies that. In situation 1, firm A has practically no reason to enter into a supplier partnership. But in situation 3, firm A has few choices for suppliers. Even if the author's advice for situation 3 is to negotiate concessions from those suppliers, firm A has much less leverage in this situation. Consequently, it is logically more appropriate for firm A to consider a supplier partnership in situation 1 than in situation 3.

That's why we can eliminate choice (E).

Question 4

This one asks, "It can be inferred that the author of the passage would be most likely to make which of the following recommendations to a company purchasing health care benefits for its employees?"

According to the passage, providers of employee health-care benefits fall into situation 2.

So let's revisit the author's own words for that situation. Here's the breakdown of situations and advice again, from paragraph 2:

1. Many alternatives and change is relatively easy -> Open pursuit of alternatives will likely yield the best results.
2. Many alternatives but change is difficult -> Continuously test the market and use the results to secure concessions from existing suppliers.
3. Few alternatives but change is easy -> Negotiate concessions from existing suppliers.
4. Few alternatives and change is difficult -> Partnerships may be unavoidable.

Now, choice (E) says that the author would likely recommend the following:


This absolutely does NOT line up with the passage. In situation 2, the author does NOT recommend forming a partnership. That action would contradict the author's recommendation to "continuously test the market and use the results to secure concession," and that's why we eliminate (E).

This error is especially clear when comparing (E) to choice (C), which is a spot-on match for how the author uses health-care benefit providers to illustrate situation 2:


I hope this helps!

Hello, for Q2, why is B correct though?
Sounds like the purchaser pays less but in exchange they only buy from the supplier..