FreezeStore is a leading retailer of frozen foods, operating over 800 stores and employing 25,000 people. The company has recently acquired 70 new properties. As a result of FreezeStore acquiring these new properties, 3,000 new vacancies have been created. The company typically receives 30,000 applications for jobs annually, and with the new vacancies, the number of applications will grow significantly. Like many businesses, FreezeStore manages applications received from candidates through the postal system and this creates an administrative burden for store managers and support staff. FreezeStore's head of human resources, Bina Chauhan, has been approached by a specialist recruitment firm, RecruitOnLine, which can provide an internet based system that automates the recruitment process. Candidates apply for vacancies online and these applications are digitally processed and are automatically screened to produce a short-list of suitable candidates. RecruitOnLine can then operate communication tools to inform candidates by text or e-mail whether they have been successful in being selected for interview.

Bina is keen to acquire the online recruitment system and has asked FreezeStore's head of procurement to agree a price and create ontract with RecruitOnLine. The head of procurement, Shahida Osman, has formally notified Bina that there would need to be a competitive tendering exercise to create competition for the new software based recruitment service in accordance with FreezeStore's procurement policy. A dispute between the two heads has arisen as Bina is unable to understand why Shahida cannot negotiate a deal with RecruitOnLine and why there is a need to delay things so that other quotes can be received.

Shahida replies 'It is our normal policy for purchases costing in excess of $5,000, which this will be on a yearly basis, to run a competition between suppliers. This ensures we have a proper, fair competition in accordance with our procedures. I will need your help in developing a plan for sourcing this service from interested suppliers as we will need to create selection criteria that prequalifies interested suppliers. We also need to create ward criteria as we should consider other factors in addition to the price for licensing the software. We should then operate a competitive tendering process in our normal way and ensure compliance with any necessary technical standards such as data protection issues'.

The head of recruitment, who reports to Bina, has indicated that he will support the new tendering exercise for the internet based recruitment system. He has heard about an e-auction (reverse auction) system which is used to obtain bids on line and believes that this could save valuable time. Last year, FreezeStore purchased a records management system that holds details about employees' appraisals, salaries, employment history and pensions. Unfortunately, the supplier providing the system has become insolvent. This has caused significant difficulties as FreezeStore has had to find a new supplier to maintain the system.

1.Discuss the benefits for FreezeStore of using a competitive tendering approach to source an online recruitment system.

2.Suggest FOUR criteria that FreezeStore might apply to the selection of a new online recruitment system supplier.

3.Explain the key elements that might be included in a plan to assist Shahida when sourcing FreezeStore's online digital recruitment system.

4.FreezeStore has experienced the consequences of an outsourced records management system provider becoming insolvent.

5. Discuss TWO sources of financial information that FreezeStore could use in future supplier selection to avoid this risk.

6. Suggest and justify TWO financial performance ratios that could help FreezeStore with supplier financial risk assessment.

7.Explain how each of the TWO financial performance ratios suggested for Q3 (b) is calculated, and how to interpret the result.

8.Discuss THREE benefits of introducing an e-auction system as a procurement tool for FreezeStore.

9.Suggest TWO disadvantages of introducing an e-auction system as a procurement tool for FreezeStore.

10. FreezeStore's procurement policy requires all annual commitments in excess of $5,000 to be competitively tendered. Explain why compliance with the procurement policy is important for FreezeStore when starting the sourcing process.

11. Summarise why ethical considerations should be part of FreezeStore's procurement policy for international sourcing.g