The firm initially agreed to buy ethylene at $1000 per metric ton but renegotiated to $890 per metric ton after
3 months. For the first three months, the price difference is cost avoidance because the market price was $900 per metric ton, and the firm avoided paying this price. For the remaining nine months, the difference between the original contract price ($1000) and the renegotiated price ($890) represents a cost reduction.
* Cost avoidance: (900 - 890) * 200 * 9 = $180,000
* Cost reduction: (1000 - 890) * 200 * 9 = $198,000 Total savings: $264,000 cost reduction + $240,000
* cost avoidance. References: Cost management principles in procurement, cost avoidance vs. cost reduction strategies.

* Review Stakeholder Feedback: Understanding the nature of the negative feedback is the first step.
* Analyze Scorecard Metrics: If the scorecards have been positive, but the feedback is negative, it suggests a misalignment.
* Identify Changes in Requirements: Stakeholders' needs and expectations might have evolved, and these changes may not be reflected in the current scorecard metrics.
* Adjust Metrics Accordingly: The scorecards should be updated to align with the new requirements to ensure they accurately reflect supplier performance.
References
* Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning.
* van Weele, A. J. (2018). Purchasing and Supply Chain Management: Analysis, Strategy, Planning and Practice. Cengage Learning.

The option that BEST describes a single source supply strategy is A. Awarding purchases to one supplier in preference over other suppliers. Single sourcing occurs when a company chooses one supplier to provide all of its products, materials, parts, and components, even when there are other suppliers that can provide the same goods12. This strategy is often used to reduce costs and streamline the procurement process.