Legit L4M6 Exam Download

Complex and technical suppliers often involve high financial risks due to the critical nature of their products. A close relationship ensures better collaboration, risk management, and value generation.

Explanation

This would reduce inventory (holding stock). Inventory is considered a business waste because it costs money to store stuff (e.g. paying the rent on a warehouse, electricity to light it up etc). If you can reduce the need to store materials and components on site- you reduce costs. You also save time because you get deliveries when you need them- you don’t need to allow for staff unpacking things, storing them away, then going back to them later when they need them. For more information on the 7 Business Wastes see p.70. This comes up in a couple of modules, so it’s worth remembering.

Substitute products pose a competitive threat by offering alternative solutions to customers, potentially eroding market share. Effective differentiation and customer retention strategies are essential.

Explanation

Using an external supplier always comes with increased risk, as you become dependant upon them, and have less control over their performance (compared to an in-house team). In this example Harry will have the increased risk that the contract cleaners turn up late to their shifts, or don't do a good job. However, there is no reason to believe that the supplier will not perform as well as an internal team- we don't have enough information from the QUESTION NO: for this to be true. What is true is the RISK isgreater. The other answers are incorrect; the QUESTION NO: doesn't indicate whether outsourcing the cleaning will be more or less expensive for Harry. Allowing staff to focus on other areas is an advantage not a disadvantage. See p.4 for more information on 'External Suppliers'