You work for a major Retailer "Biefrommy Plc" with a revenue of 3.2bn, and a net income of just under 30m. Biefrommy has been struggling in recent years but a change of management and a return to basics strategy, including diversifying some of the groups' business units, has brought the company back to profit. Remaining in the Group are 4 core Business Units, of which the Food business is the most critical followed by the Insurance, Legal and Electrical services businesses

The Indirects spend - which includes all Energy, Transport, Warehousing & Distribution is just under 1bn and the Director of Procurement is keen to see some

new thinking across Procurement following 3 years of cost reduction. This is especially because a recent rebranding has called for a focus on the impact on the local customer environment, to reinvigorate innovation and try something new,

encapsulated in the new "Refresh, Re-invigorate & Win" strategy

You have recently been appointed as the Category Manager in the HR & Professional Services team which has been a vacant position for over 6 months. You will be looking after Travel, Consultancy and Temporary Labour spend categories and you've been asked to come up with an initial strategy for the Travel spend.

Your Role

Apparently the COO has become increasingly irritated by the current provider who has been in place for years, and sees no reason why most of the spend is sourced via 1 Travel provider, when he can go to trivago.co.uk and get the best deal himself. He believes a minimum 10% could be saved. Especially when the fees for the Travel Agency are apparently c. 450k per annum. He recently boasted with colleagues (who'd simply stayed overnight at the hotel next door to the meeting venue the Travel Agency had proposed) that he'd saved over 15% on their 100 deals for his own overnight stay in London just by having his PA make a few calls the other day. His hotel's reputation for Kippers is legend and the PA had found it easy to organise the taxi to the venue that day too. It had only taken 25 minutes or so for him to get there.

Spend data is not easily available, but via discussions with the current Travel Provider "Flyme Plc." you understand that spend on Air fares is around 5.6m, on Hotels is c.1.8m, Serviced apartments is c. 0.8m and Trains c. 1.2m. The company appears to use local taxi firms QuikTaxis and Luxoride on Account and spend appears to be 100k and 370k respectively. Analysis tells you that average taxi costs are about 1 a minute. Also on chatting with Finance you believe there to be another 1.5-2m personal travel expenses spend that is not categorised. Although subscriptions is likely to be a part of this, the Finance Manager reckons 80% is likely to be hotel, train and taxi spend.

Additional Information

Most Airfares are with Finnair as the Head Office is in Helsinki and only British Airways

and Finnair have direct routes from London.

Flyme Plc manage all air, Serviced Apartment, hotel and train bookings although the only Serviced Apartments locally are owned by 1 local Landlord.

No preferred hotels have been established and there are no preferred Hotel Rates, except for those Flyme has access to anyway

There are other Travel Providers who could do what Flyme do. When Biefrommy went out to market 6 years ago, there were 4 other Travel providers who looked good

There are still 2 years left to run on the 5 year Flyme contract. Flyme are a global Travel provider and have numerous clients with spends in excess of $30M US.

No contract exists with the Taxi companies. There are plenty of local small taxi firms. The local landlord is nearing retirement and planning to sell his serviced apartments as private dwellings.

Biefrommy has an unspoken policy of paying suppliers after 2 chasers.

One local independent hotel, located next door to the offices has a mean occupancy rate of 80% over the year, with a 98% allocation between Monday and Thursday, most of which comes from Biefrommy business.

Questions

1. How many different types of Travel spend are mentioned?

A. 3

B. 4

C. 7

1. How much does Biefrommy Plo spend on travel each year ?

A . 9.4m per annum

B . 450k per annum

C. Over 11.5 m per annum

1. How much money does the GOD save the company when he books his own hotel directly ( as directly ( as a %)

A 10%

B He didn't He cost the business money

C. 15%(15)

1. Has Travel spend been closely managed in recent years by Biefrommy Plc?

A. Yes. There was a strategy to put in place a Travel agency, and it is 3 years into a 5 year deal question

B. No. The whole portfolio is in chaos and no one is using any of the preferred travel arrangements

C. No it has not. There is evidence of a contract with an agency, but no further information is available.

1. Flyme Pic . are the incumbent travel agency Is Biefrommy Pic . one of Flyme's biggest clients ? ingest client Not yet answered Select one or more Marked out of 1

A . Yes . Biefrommy Pic . are their biggest client

B . Yes . Biefrommy Pic . spend over 11.5 m with them

C . No . They have many clients who are 3 x bigger

1. What do you thin MI means in the Business Requirements Analysis?

A.Management Information

B. Market Intelligence

C. Myocardial Infarction

1. Which 2 sub-categories of Travel spend have the highest value?

A. Travel Agency and Hotel costs

B. Hotel and Air Fare costs

C. Travel Agency and Air fare costs

1. The biggest 3 sub-categories account for what % of the total Travel spend(approximately)?

A.80%

B. 70%

C. 90%

1. What links the terms PIN, EOl, PQQ, ITT?

a. They are abbreviations used at different stages in the tendering

process

b. They are abbreviations used at different stages in the procurement

strategy process

c. They are used in the private sector only

1. What is a Category or Sourcing group?

a. It's a way of buying Ingredients and helping strategic thinking

b.It's a way of segmenting spend, at a high level, by supply market

c. It's a way of grouping suppliers, at Level 1