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Paragraph 1) In corporate purchasing, competitive scrutiny

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Manager
Joined: 21 Aug 2012
Posts: 188

Kudos [?]: 57 [0], given: 349

Concentration: General Management, Operations
Schools: HBS '19 (S)
GMAT 1: 740 Q49 V42

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13 Feb 2013, 00:51
Question 1
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Question Stats:

100% (00:00) correct 0% (00:00) wrong based on 2

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Question 2
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100% (00:00) correct 0% (00:00) wrong based on 1

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Question 3
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Question Stats:

67% (00:00) correct 33% (00:00) wrong based on 3

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competitive scrutiny is typically
limited to suppliers of items that are
directly related to end products.
(5) With “indirect” purchases (such as
services), which are not directly
related to production, corporations
often favor “supplier partnerships”
(10) (arrangements in which the
purchaser forgoes the right to
pursue alternative suppliers), which
can inappropriately shelter suppliers
from rigorous competitive scrutiny
(15) that might afford the purchaser
economic leverage. There are two
independent variables—availability
of alternatives and ease of changing
suppliers—that companies should
(20) use to evaluate the feasibility of
subjecting suppliers of indirect
purchases to competitive scrutiny.
This can create four possible
situations.

(25) In Type 1 situations, there are
many alternatives and change is
relatively easy. Open pursuit of
alternatives—by frequent com-
petitive bidding, if possible—will
(30) likely yield the best results. In
Type 2 situations, where there
are many alternatives but change
is difficult—as for providers of
employee health-care benefits—it
(35) is important to continuously test
the market and use the results to
secure concessions from existing
suppliers. Alternatives provide a
credible threat to suppliers, even if
(40) the ability to switch is constrained.
In Type 3 situations, there ate few
alternatives, but the ability to switch
without difficulty creates a threat that
companies can use to negotiate
(45) concessions from existing suppliers.
In Type 4 situations, where there
are few alternatives and change
is difficult, partnerships may be
unavoidable.

Q35:
Which of the following best describes the relation of the second paragraph to the first?
•The second paragraph offers proof of an assertion made in the first paragraph.
•The second paragraph provides an explanation for the occurrence of a situation described in the first paragraph.
•The second paragraph discusses the application of a strategy proposed in the first paragraph.
•The second paragraph examines the scope of a problem presented in the first paragraph.
•The second paragraph discusses the contradictions inherent in a relationship described in the first paragraph.
--------------------------------------------------------------------------------
Q36:
Which of the following can be inferred about supplier partnerships, as they are described in the passage?
•They cannot be sustained unless the goods or services provided are available from a large number of suppliers.
•They can result in purchasers paying more for goods and services than they would in a competitive-bidding situation.
•They typically are instituted at the urging of the supplier rather than the purchaser.
•They are not feasible when the goods or services provided are directly related to the purchasers’ end products.
•They are least appropriate when the purchasers’ ability to change suppliers is limited.
--------------------------------------------------------------------------------
Q37:
According to the passage, which of the following factors distinguishes an indirect purchase from other purchases?
•The ability of the purchasing company to subject potential suppliers of the purchased item to competitive scrutiny
•The number of suppliers of the purchased item available to the purchasing company
•The methods of negotiation that are available to the purchasing company
•The relationship of the purchased item to the purchasing company’s end product
•The degree of importance of the purchased item in the purchasing company’s business operations

[Reveal] Spoiler:
CBD
[Reveal] Spoiler: Question #1 OA
[Reveal] Spoiler: Question #2 OA
[Reveal] Spoiler: Question #3 OA

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Manager
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Posts: 78

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Location: United States
Concentration: Accounting, Finance
WE: Accounting (Accounting)

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13 Feb 2013, 02:05
roopika2990 wrote:
competitive scrutiny is typically
limited to suppliers of items that are
directly related to end products.
(5) With “indirect” purchases (such as
services), which are not directly
related to production, corporations
often favor “supplier partnerships”
(10) (arrangements in which the
purchaser forgoes the right to
pursue alternative suppliers), which
can inappropriately shelter suppliers
from rigorous competitive scrutiny
(15) that might afford the purchaser
economic leverage. There are two
independent variables—availability
of alternatives and ease of changing
suppliers—that companies should
(20) use to evaluate the feasibility of
subjecting suppliers of indirect
purchases to competitive scrutiny.
This can create four possible
situations.

(25) In Type 1 situations, there are
many alternatives and change is
relatively easy. Open pursuit of
alternatives—by frequent com-
petitive bidding, if possible—will
(30) likely yield the best results. In
Type 2 situations, where there
are many alternatives but change
is difficult—as for providers of
employee health-care benefits—it
(35) is important to continuously test
the market and use the results to
secure concessions from existing
suppliers. Alternatives provide a
credible threat to suppliers, even if
(40) the ability to switch is constrained.
In Type 3 situations, there ate few
alternatives, but the ability to switch
without difficulty creates a threat that
companies can use to negotiate
(45) concessions from existing suppliers.
In Type 4 situations, where there
are few alternatives and change
is difficult, partnerships may be
unavoidable.

Q35:
Which of the following best describes the relation of the second paragraph to the first?
•The second paragraph offers proof of an assertion made in the first paragraph.
•The second paragraph provides an explanation for the occurrence of a situation described in the first paragraph.
•The second paragraph discusses the application of a strategy proposed in the first paragraph.
•The second paragraph examines the scope of a problem presented in the first paragraph.
•The second paragraph discusses the contradictions inherent in a relationship described in the first paragraph.
--------------------------------------------------------------------------------
Q36:
Which of the following can be inferred about supplier partnerships, as they are described in the passage?
•They cannot be sustained unless the goods or services provided are available from a large number of suppliers.
•They can result in purchasers paying more for goods and services than they would in a competitive-bidding situation.
•They typically are instituted at the urging of the supplier rather than the purchaser.
•They are not feasible when the goods or services provided are directly related to the purchasers’ end products.
•They are least appropriate when the purchasers’ ability to change suppliers is limited.
--------------------------------------------------------------------------------
Q37:
According to the passage, which of the following factors distinguishes an indirect purchase from other purchases?
•The ability of the purchasing company to subject potential suppliers of the purchased item to competitive scrutiny
•The number of suppliers of the purchased item available to the purchasing company
•The methods of negotiation that are available to the purchasing company
•The relationship of the purchased item to the purchasing company’s end product
•The degree of importance of the purchased item in the purchasing company’s business operations

[Reveal] Spoiler:
CBD

I am not sure of answer to question 36, I feel this is an answer that is directly stated in the passage so not sure why this can be an inference. I chose option D. Can anyone elaborate on this.

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Senior Manager
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14 Feb 2013, 01:54
Hi David,

I'm not sure it is stated directly. The key sentence for me is

which can inappropriately shelter suppliers from rigorous competitive scrutiny that might afford the purchaser economic leverage.

This to me is not a direct re-statement of the answer B, and you do infact need to do a little 'inferring' to get from this sentence to B.

As for answer D, I would say this is directly in the passage in the below section:

In corporate purchasing, competitive scrutiny is typically limited to suppliers of items that are directly related to end products. With “indirect” purchases (such as computers, advertising, and legal services), which are not directly related to production, corporations often favor “supplier partnerships”

What do you think?
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... and more

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15 Feb 2013, 00:40
I miss the first question
how to solve the main idea/global question efffectively. I can not differentiate among many verb or noun. the answers are close? pls help

this is typical of easy passage and hard question. we can read the passage quickly but it is time consuming to answer the questions which is hard.
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Manager
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22 Apr 2014, 08:08
Hi,

What are the official answers for these questions?

Thanks.

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Joined: 22 Dec 2013
Posts: 21

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23 Apr 2014, 10:06
suv8080 wrote:
Hi,

What are the official answers for these questions?

Thanks.

Q35:
Which of the following best describes the relation of the second paragraph to the first?
•The second paragraph offers proof of an assertion made in the first paragraph.second paragraph simply elaborate two
independent variables with four possible situation in terms of possible economic leverage. Therefore,author nowhere compare proof of assertion made in first paragraph

•The second paragraph provides an explanation for the occurrence of a situation described in the first paragraph.four possible situations are elaborated in second paragraph ,there is no explanation provided for situation described in first paragraph.
•The second paragraph discusses the application of a strategy proposed in the first paragraph.yes,the author introduces both the direct and indirect purchasing- further proposes strategy with its elaboration of possibilities in second paragraph but please note the difference in OPTION C vs E "discusses the contradictions Vs application" hence this is wrong
•The second paragraph examines the scope of a problem presented in the first paragraph.this is very close to option C but there are two major changes in problem statement i.e. "examine Vs discuss" & "scope Vs Strategy" . Four possible situations are discussed rather than examined .
The second paragraph discusses the contradictions inherent in a relationship described in the first paragraph.this is correct option, as the author clearly mentions the two independent variable and discuss the contradiction with reference to overall economical leverage possibilities

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23 Apr 2014, 10:27
35) E (Explanation already provided in my last post , no energy left for typing 10 more options )
36) D
38) C
waiting for some valuable suggestions,i know am not born intelligent

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Re: Paragraph 1) In corporate purchasing, competitive scrutiny   [#permalink] 23 Apr 2014, 10:27
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