Which of the following are examples of variable costs?
Building and site rent
Annual insurance premium
Raw materials expenditure
Delivery costs for materials
Which of the following are internal factors when a supplier is making its pricing decision?
Price elasticity of demand
Environmental legislation
Risk management
The stage in the product life cycle
Which of the following is definition of elasticity of demand in microeconomics?
A buyer is approaching a negotiation where the company is in a low-power negotiating position in relation to the supplier. How can the buyer improve leverage and power with the supplier?
XYZ Ltd decides to go to market for a cleaning contract to service a number of offices. It knows that it will get a price which may, or may not, be better than the one it is currently paying. To gain leverage in the marketplace, the organisation decides to add other related services to the scope, such as gardening, security and maintenance, which increase the value of the contract. This is an example of which forms of spend consolidation?
Collaborative approach in negotiation not only can fully satisfies the concerns of both, but also ensure that neither party will seek to be opportunistic in later time during the life of the contract. Is this statement true?
Which of the following is a true statement regarding macroeconomic factors and their potential impact on negotiations?
Colin Smith is preparing for a negotiation with a supplier that provides a chemical for grass fertiliser. Colin has been given an action to secure a commercial deal that achieves his organisation’s objective of ‘ethical and sustainable procurement.’ As part of his negotiation plan, Colin is using the ‘must, intend, like (MIL)’ framework to prepare for the negotiation. Colin would categorise his organisation’s objective within the negotiation plan as:
Which of the following is considered a strength of a ‘logical’ style negotiator?
Leitax is a consumer electronics firm with headquarters in the US and with a global sales presence. The company maintains seven to nine models in its product portfolio, each of which has multiple SKUs. Product life ranges from fifteen to nine months and is getting shorter. The demand planning and master planning processes at the company were ill-defined. Data relevant to forecasting were usually inaccurate, incomplete, or unavailable and the lack of objectives and monitoring mechanisms for the demand planning process meant that process improvement could not be managed. Support for supply management was equally ill-defined, as master production schedules were sporadic and unreliable and suppliers had learned to mistrust them. Leitax's newly appointed Supply chain director, Jessica realises that the “buy-in” of different functional groups was critical to the improvement of demand planning. She invites relevant stakeholders to a meeting so that they can express their opinions openly. What tactic is Jessica using?
Jessica Taylor, a senior buyer, is reflecting on her most recent negotiation. She has been asked by her manager to create a written record of performance. Which of the following should Jessica include in this negotiation performance report? Select THREE that apply:
If the price of a good is above the equilibrium price, which of the following will happen?
A breakeven analysis uses which of the following aspects as part of the analysis?
Which of the following roles would support negotiations with an external supplier when planning a negotiation for a low-value, routine purchase? Select TWO that apply.
To buying organisation, savings can be achieved from different saving levers or tactics. Which of the following are means that deliver savings through optimising specifications?
A garden furniture supplier who is currently in negotiations for a high-value contract has offered the procurement manager a visit to their site. The supplier suggests that during this visit, they can undertake the contract negotiation. What would be an appropriate response from the procurement manager?
Neville is a senior procurement specialist in a automaker. He has good relationship with his team mates and other departments because of his amazing purchasing skills and kindness. Which of the following sources of power is Neville likely to possess?
Citywide Developments Ltd (CDL) is a construction programme management company that delivers high-value property development schemes. CDL uses named consultant design services in contracts. Recently, consultancy day rates have increased. Which of the following tradeable concessions could CDL offer when negotiating with suppliers to achieve lower rates, without lowering service quality?
Which of the following are the most typical characteristics of integrative approach to negotiation? Select TWO that apply.
Which of the following are most likely to help buyer become preferred customer in supplier's perspective? Select TWO that apply.
Which of the following tactics would be appropriate in an integrative negotiation?
Listening is a key activity in any negotiation. Which of the following are characteristics of effective listeners?
Which of the following are rules of attentive listening? Select TWO that apply.
Lina Rawlins is a senior buyer working for a medical equipment company. Lina is in charge of the company’s largest supplier account, Great Barrington Gas (GBG), a medical equipment supplier. Recently GBG’s performance has declined, which has led to an increasing number of rejected items. Lina is aware of the seriousness of this, given the nature of the item, and has asked GBG to attend an urgent meeting. In the meeting, Lina asked the GBG representative “Can you tell me exactly what you are doing to ensure quality?” What type of question is Lina asking?
Which of the following are examples of non-verbal negotiation? Select THREE that apply.
Buyers should have the ability to analyse the costs of their purchases not only for determining their impact to their organisation’s cost but also for the purpose of reducing them during commercial negotiations to contribute to the profitability of their organisation. One way ofanalysing costs is to classify them into direct and indirect costs. Which ONE of the following is an explanation of ‘direct costs’?
Under EU public procurement directives, which of the following are procedures in which there is no commercial negotiation allowed?
Which of the following is considered a weakness of a ‘dealer’ style negotiator?
Which of the following are tactics of distributive bargaining?
Withholding information that may open up common ground
Coercing the other party to accept your position
Finding common ground between parties
Being open about all your common needs
Before engaging in a negotiation with a supplier of rechargeable lights, procurement team tries to visualise the breakdown of supplier's costs to calculate its break-even point. They estimate that total fixed expenses related to rechargeable electric light are $270,000 per month and variable expenses involved in manufacturing this product are $126 per unit. The supplier charges its customer $180 per unit. Within its current capacity, this supplier will make a profit at which of the following?
A wide range of factors may be taken into account by suppliers when setting or negotiating prices. Which of the following are external factors in pricing decisions? Select TWO that apply.
A skilled negotiator will use a range of questioning techniques in a negotiation. If they wished to explore options with the other party without making any formal commitment, which type of question style would they use?
Which of the following are features of a single-sourced type of relationship on the relationship spectrum?
Exclusivity granted in relation to a particular product
The supplier is an oligopoly market structure
The supplier is trusted and collaborative
Framework contracts are used to identify the supplier
What are the potential sources of conflict between the buyer and supplier? Select TWO that apply.
In which of the following persuasion methods, the influencer uses logics and objective reasons to persuade the others to buy into influencer's ideas?
In airline industry, suppliers prefer to adopt dynamic pricing in order to constantly monitor and change their fares in response to market conditions. Dynamics pricing is based on which costing method?
Which of the following are most likely to turn buying organisation into an unattractive customer in supplier's perspective? Select TWO that apply.
When considering a new supply source for a product, a procurement professional will review the suppliers' quotations before a supplier negotiation. Which of the following is a direct cost associated with the product within a potential supplier's quotation?
According to Fiona Dent and Mike Brent, which of the following are characteristics of Push approach? Select TWO that apply.
From the principled point of view about negotiation environment, which of the following is a true statement?
During a negotiation, Jose Gomez, the salesperson for a strategic supplier, states that his sales director will not approve discounts against initial purchases. However, Jose offers a 5% discount on the aftercare package, which will provide the same monetary saving. Sally Pampas requires both the product and the aftercare package and has an objective to achieve a 5% discount off the purchase price. To achieve a win-win (integrative) negotiation, Sally should...
Langham Industries is seeking to expand its operations globally. The CEO has asked the procurement department to engage in a macroeconomic analysis for its potential new supply chain to meet organisational objectives and outcomes. Which of the following would be a source of macroeconomic data?
Which of the following are signs indicating that TOP is using coercive power in commercial negotiation? Select TWO that apply.
Which of the following occur within the planning and preparation stage in a negotiation process? Select THREE that apply.
Which of the following is the most appropriate pricing arrangement in contracts where major inputs are commodities?
Which of the following are most likely to be macro factors that may influence the balance of power in commercial negotiation? Select THREE that apply.
Which of the following are effective approaches when procurement professionals negotiate with monopoly suppliers?
1. Delaying payment with monopoly suppliers as long as possible to increase bargaining power
2. Setting up stronger BATNA
3. Engaging in the negotiation with a distributive approach
4. Eliminating requirements in the specification that prioritises monopoly suppliers
Which of the following are most likely to be characteristics of a perfectly competitive market? Select TWO that apply
Lina Rawlins is a senior buyer working for a medical equipment company. Lina is in charge of the company’s largest supplier account, Great Barrington Gas (GBG), a medical equipment supplier. Recently, GBG's performance has declined, leading to an increasing number of rejected items. Lina is aware of the seriousness of this and has asked GBG to attend an urgent meeting. In the meeting, Lina asked the GBG representative, “Can you tell me exactly what you are doing to ensure quality?" What type of question is Lina asking?
Which of the following are behaviours that builds trust between the buyer and the supplier in business relationship? Select TWO that apply.
Which of the following should be the final step of a negotiation process if both parties cannot reach an agreement?
A procurement manager has decided to bring in a junior member of their team to a negotiation meeting. Which of the following would be suitable roles for this junior member of the team?
Champion Toys (CT) is negotiating a large order of luxury toys with its supplier. CT has identified that lead times, order quantities, and delivery locations are tradeables that could be used in this negotiation. At which negotiation stage should CT introduce these tradeables?
Fast & Easy Limited, a global fast food retailer, is in a negotiation with its major meat supplier. The supplier is asking for a 2% price increase, which Fast & Easy is strongly resisting. The supplier justifies this increase by stating that currency fluctuations, an unstable economic climate, and rising transport costs have necessitated this increase. Which influencing tactic is the supplier using?
In which of the following scenarios could you adopt a distributive-based negotiation approach?
The National Schools Purchasing Forum (NSPF) is a procurement organisation that purchases goods and services on behalf of schools on a national scale. NSPF is close to concluding negotiations in a meeting with Hygienics For All (HFA) for the supply of consumables to school washrooms. Both parties have reached an agreeable position, and NSPF feels it is important that they conclude the negotiation at this point. What type of questions should NSPF ask HFA to achieve this?
Citywide Developments Ltd (CDL) is a construction programme management company that delivers the design and build of high-value property development schemes. CDL uses third-party consultant design services, using named consultants in the contract. CDL has recently observed increases in the consultancy day rate for these consultants. Which of the following tradeable concessions could CDL offer when negotiating with the suppliers of design services, in order to achieve lower rates of pay, but without lowering the quality of service?
Personal power is only used in distributive approach. Is this statement true?
The buyer's bargaining power tends to be relatively higher than supplier's bargaining power in which of the following circumstances?
Which of the following would describe a push approach to influencing?
Exerting power or authority
Extensive use of open questioning
The party being influenced is fully aware of the process occurring
The party being influenced may not be aware of the process happening
Which of the following are most likely to be fundamentals of Fisher & Ury's principled negotiation?
1. Depersonalise the argument
2. Focus on positions
3. Generate creative options
4. Using subjective criteria
Which type of question should be used to receive affirmation on statement?
Which factors give rise to conflict within the procurement negotiation context? Select THREE that apply.
Where there are high levels of commitment to relationships between both the buyer and supplier, this is seen as collaborative and beneficial to negotiations. Is this statement correct?
The procurement manager of a private healthcare provider is running an IT project. Who would be the stakeholders?
General public
Pharmaceutical suppliers
Senior Management
Software support developers
Hammad Alsuwaidi is a procurement professional leading a negotiation for a vehicle rental contract. Hammad has a clear goal to negotiate a two-year contract in exchange for a minimum of a 20% discount. During the negotiation, Hammad presents to the supplier the facts, figures, and justification for a 20% discount. Which of the persuasion methods below has Hammad chosen?
Mike is a junior buyer who has been working for a manufacturing organisation for two years, specializing in purchasing research. Over this time, he has built good relationships within his team and with other departments. Which of the following sources of power is Mike most likely to possess?
There are no commitments in hypothetical questions. Is this statement true?
Which of the following is the first step in the development of negotiation strategies?
Which of the following would help build trust in a relationship?
Mediation attendance
Regular meetings
Keep promises
Coercion
Effective listening is important in integrative negotiations. Is this statement correct?
A procurement team has discussed, in advance of a negotiation, what they will do if there is no agreement with the current supplier. They have decided that they will perform the services themselves in-house on a trial basis if no deal is made. Which of the following describes what they have prepared here?
The only procurement risk inherent in a distributive negotiation approach is the potential loss in the outcome. Is this statement TRUE?
Which of the following are most likely to be sources of conflict that can emerge from the content of commercial negotiations? Select TWO that apply.
What is the most likely outcome when two organisations with adversarial relationship negotiate with each other?
Which of the following can be prepared before a negotiation with a supplier to achieve an agreement to benefit both parties?
Zone of potential agreement
Attendee list for the negotiation talks
Walk-away point
Venue for the negotiation talks
Buying organisation may increase its leverage with suppliers by concentrating spend. Which of the following are most likely to be forms of supplier spend consolidation? Select THREE that apply.
John Browne, a junior buyer for a corporation, is analysing the global supply market before undertaking negotiations and is wondering whether foreign exchange rates are important to factor into his research. Should John consider the foreign exchange rates?
A supplier’s mark-up on all products is 25%. Supplier's profit margin is...?
Jane is planning for a forthcoming negotiation with a key supplier. She has learned what are important to the supplier and what are important to her company from previous contracts between them. In order to avoid negotiation deadlocks, she has set up several concession plans. But Jane has little experience in dealing with suppliers and doesn't know when to trade these concessions. When is the best time in a negotiation to trade concessions?
Where there are high levels of commitment to relationships between both the buyer and supplier, this is seen as collaborative and beneficial to negotiations. Is this statement correct?
Which of the following is important during the proposing stage of a negotiation?
Freefields Housing Authority (FHA) is a housing provider that has outsourced a range of management services using fixed-price long-term contracts. FHA’s regular supplier credit reviews have identified that some key outsourced service suppliers are at risk of insolvency due to high inflation rates observed in the macroeconomic climate. Which of the following actions would enable FHA to reduce this risk for the lifetime of the affected contracts?
Which of the following is an attribute of a distributive negotiation approach?
Which of the following are most likely to be fixed costs of an airline? Select TWO that apply.
For a commercial negotiation to be effective, the organisation has to identify resources required for negotiation. Which one of the following could help?
Which of the following types of questions should be used most often in the proposing phase?