Is this a valid recommendation?

A company is relocating its manufacturing base to a low-cost country and is considering a partnership with a local supplier for its key components rather than a tender process. Although there are some concerns regarding confidentiality and component competitiveness, the procurement director is recommending a partnership strategy to the board of directors. The recommendation is based on a range of advantages including, but not limited to, gaining local market knowledge.

Is this a valid recommendation?
A . No, because confidentiality risk will be higher in a partnership
B . Yes, as intellectual property costs will be lower in a partnership
C . No, local market knowledge is guaranteed in a tender process
D . Yes, as investment costs can be shared in a partnership

View Answer

Answer: D

Explanation:

Partnerships provide access to local market knowledge, enable shared investments, and mitigate risks associated with relocation. These advantages outweigh concerns that can be managed through strong contracts and confidentiality agreements.