Weekend Sale Limited Time Flat 70% Discount offer - Ends in 0d 00h 00m 00s - Coupon code: 70spcl

CIPS L4M5 Commercial Negotiation Exam Practice Test

Page: 1 / 28
Total 275 questions

Commercial Negotiation Questions and Answers

Question 1

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?

Options:

A.

Rational persuasion

B.

Inspirational appeal

C.

Coalition

D.

Personal appeal

Question 2

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?

Options:

A.

Accept unqualified trainee consultants

B.

Offer a shorter consultant working day

C.

Reduce the volume-based rate discounts

D.

Remove the requirement for the named personnel

Question 3

Which of the following is a source of information on microeconomic factors?

Options:

A.

Published economic indices such as the Retail Price Index (RPI)

B.

Data published by the financial markets and commodity markets and exchanges

C.

Analysis published in the mainstream and financial media

D.

The marketing and corporate communications of suppliers

Question 4

Which of the following is a source of power in organisational relationships?

Options:

A.

Referent power

B.

Given power

C.

Tactical power

D.

Intruded power

Question 5

The purpose of ongoing supplier relationship management following a negotiation and contract award is that it:

Options:

A.

1 and 2 (Enables the buyer to monitor supplier performance and persuade the supplier to renegotiate better terms)

B.

1 and 3 (Enables the buyer to monitor supplier performance and work with the supplier to resolve relationship problems)

C.

3 and 4 (Enables the buyer to work with the supplier to resolve relationship problems and evaluate unnecessary concessions)

D.

2 and 3 (Enables the buyer to persuade the supplier to renegotiate better terms and work with the supplier to resolve relationship problems)

Question 6

How can having a best alternative to a negotiated agreement (BATNA) support the buyer in a negotiation? Select THREE options that apply.

Options:

A.

It helps to be more assertive in a negotiation

B.

It reduces the likelihood of accepting a poor agreement

C.

It guarantees a win-win outcome

D.

It produces an unacceptable outcome

E.

It extends the length of the negotiation period

F.

It helps to identify the point at which the buyer should walk away

Question 7

There are no commitments in hypothetical questions. Is this statement true?

Options:

A.

No, because the party who makes hypothetical questions cannot withdraw their proposals

B.

No, because hypothetical questions are made explicitly to the other party

C.

Yes, because hypothetical questions generate a specific response

D.

Yes, because hypothetical questions only mention possible situations

Question 8

According to Professor Gavin Kennedy, in which of the following forms of dispute resolution, both parties will voluntarily exchange their ideas and beliefs?

Options:

A.

Litigation

B.

Persuasion

C.

Negotiation

D.

Gambling

Question 9

Personal power is only used in distributive approach. Is this statement true?

Options:

A.

Yes, because only distributive approach to negotiation requires strong personal power

B.

No, because personal power can be very helpful in integrative approach

C.

No, because only organisational power will optimise the negotiation outcomes

D.

Yes, because one party will abuse coercive power to maximise the gain

Question 10

When implementing value analysis or value engineering, which of the following acronyms reminds both buyer and supplier of ideas on removal, substitution and design-out of cost elements?

Options:

A.

SMART

B.

STOPS WASTE

C.

OWN-IT

D.

SAMOA

Question 11

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?

Options:

A.

1 and 2 (Consolidate expenditure and understand supplier costs)

B.

2 and 3 (Understand supplier costs and take a distributive approach)

C.

3 and 4 (Take a distributive approach and limit communication)

D.

1 and 4 (Consolidate expenditure and limit communication)

Question 12

During a negotiation, the supplier requests for payment term shortened to 45 days from 60 days. Seeing that this proposal lies within the concession plan, the procurement manager asks for 5% discount in return. Is that right thing to do?

Options:

A.

Yes, the procurement manager should keep that 5% for himself because that amount is a fair compensation for his effort

B.

No, it is unethical to exploit the weakness of the other party

C.

No, procurement should insist the payment term remains 60 days

D.

Yes, since procurement manager has his own cost savings target to achieve and he should make use of supplier's financial status

Question 13

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.

Options:

A.

Forming purchasing consortia

B.

Volume consolidation across categories

C.

Volume separation

D.

Paying supplier on time

E.

Volume redistribution

F.

Simplify procurement process

Question 14

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?

Options:

A.

Purchasing consortia

B.

Volume consolidation across categories

C.

Volume pooling

D.

Volume redistribution

Question 15

AB Manufacturing seeks to buy a new materials resource planning (MRP) software system. At the ‘defining the business need’ stage of the procurement cycle, the procurement manager ensured that all the internal stakeholders involved had the power to contribute and sign off on requirements. For the MRP system, the procurement manager consulted the head of production planning of AB Manufacturing. The head of production contributed to demand levels, existing manufacturing planning, and existing staff levels. What type of power does the head of production demonstrate?

Options:

A.

Expert

B.

Legitimate

C.

Referent

D.

Reward

Question 16

Which of the following are most likely to be abilities of a person with high emotional intelligence? Select TWO that apply.

Options:

A.

Complex idea comprehension

B.

Controlling one's own emotions

C.

Perceiving how others feel

D.

Reasoning and problem solvingAbstract thinking

Question 17

Are tactical ploys only used in distributive approach?

Options:

A.

No, because tactical ploys strengthen the other party's position

B.

No, because tactical ploys will be more effective with integrative approach

C.

Yes, because tactical ploys will help to gain insights into the other party's interests

D.

Yes, because they will be irritants to long-term relationship

Question 18

Where can we find the data on macroeconomics?

1. From trade journal

2. From supplier's marketing catalogue

3. From stock exchange market

4. From government's statistics

Options:

A.

2 and 4 only

B.

3 and 4 only

C.

1 and 2 only

D.

1 and 3 only

Question 19

Maria is a professional services category buyer within the National Health Service. Due to the severe financial budget cutbacks the National Health Service is facing, the procurement team has been tasked with achieving cost savings so that funding available can be spent on patient care. Maria plans to achieve savings with one of her collaborative suppliers. Which negotiation approach should she undertake?

Options:

A.

Win-Lose

B.

Lose-Lose

C.

Win-Perceived Win

D.

Win-Win

Question 20

Which of the following is definition of elasticity of demand in microeconomics?

Options:

A.

The percentage change in the quantity demanded divided by the percentage change in income

B.

The percentage change in price of a good divided by the percentage change in the quantity demanded of that good.

C.

The percentage change in the quantity demanded of a good divided by the percentage change in the price of that good

D.

The percentage change in income divided by the percentage change in the quantity demanded

Question 21

According to Fiona Dent and Mike Brent, which of the following are characteristics of Push approach? Select TWO that apply.

Options:

A.

Inspirational

B.

Persuasion

C.

Collaborative

D.

Seeking commitment

E.

Directive

Question 22

Which of the following is the area where two or more negotiating parties may find common ground?

Options:

A.

Zone of potential agreement

B.

Zone of proximal development

C.

Walk away area

D.

Best alternative to a negotiated agreement

Question 23

When is an adversarial style of negotiation appropriate?

Options:

A.

When one party has high bargaining power

B.

When a buyer feels the relationship is important

C.

When both parties want a win/win outcome

D.

When a sustainable partnership is key

Question 24

Which of the following are types of non-verbal communication that could be used during a negotiation meeting? Select THREE that apply:

Options:

A.

Room layout

B.

Facial expressions

C.

Eye contact

D.

Reference materials

E.

Hand gestures

F.

Meeting location

Question 25

The bargaining power of buyers is likely to be high in relation to suppliers in which of the following situations?

Options:

A.

The buyer spend is a low proportion of the supplier's revenue

B.

The buyer does not have the option to make as an alternative to buy

C.

The buyer demand is urgent and cannot be postponed

D.

The buyer is large in size relative to the supplier

Question 26

What are the potential sources of conflict between the buyer and supplier? Select TWO that apply:

Options:

A.

Unequal sharing of gains, risks, and costs with the supplier

B.

Persistent late payment of the supplier’s invoices

C.

Requesting early supplier involvement

D.

Planning scheduled visits to the supplier site

E.

Scheduling agreed supplier delivery dates

Question 27

At the first stage of CIPS Procurement and Supply Cycle (Understand need), which of the following is the most important duty of procurement professional?

Options:

A.

Demand management

B.

Evaluating the interests from suppliers

C.

Undertaking 'reverse marketing'

D.

Deciding whether RFQ or ITT should be used

Question 28

Which of the following are rules of attentive listening? Select TWO that apply.

Options:

A.

Prepare for what to say next

B.

React to the person who is speaking

C.

Listen deliberately

D.

Only focus on verbal cues

E.

Do not interrupt when the other party is speaking

Question 29

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?

Options:

A.

Reward

B.

Referent

C.

Legitimate

D.

Coercive

Question 30

An oil refinery plant imports much of its crude oil from overseas. A procurement manager in the refinery suggests that fixing the crude oil contract price for 36 months would be beneficial for the company. Would this be a right thing to do?

Options:

A.

Yes, financial budgeting task would be a lot easier with fixed pricing arrangement

B.

No, fixed price should be only applied to contracts that last 60 months or longer

C.

No, the refinery would not be able to reap the benefits from falling commodity price and currency rates

D.

Yes, the supplier would bear the risk when the material price increased

Question 31

In general, which of the following is the consequence of a flatter demand curve?

Options:

A.

Quantity elastic

B.

Price elastic

C.

Price inelastic

D.

Unit price elastic

Question 32

Which of the following are most likely to be sources of conflict that can emerge from the process of commercial negotiations? Select TWO that apply.

Options:

A.

Differences in conflict management style

B.

Differences in culture

C.

Types of purchase

D.

Standard terms and conditions

E.

Line of the best fits

Question 33

Which of the following best describes Leverage quadrant in Kraljic matrix?

Options:

A.

Low risk, high importance

B.

High value, high complex

C.

Low risk, low importance

D.

High complex, low importance

Question 34

Which of the following is the process enabling the buyer to share with the supplier their purposes and needs to focus on some specific areas such as quality, cost, social and environmental standards, etc in the supplier's bids?

Options:

A.

Supplier selection

B.

Supply positioning

C.

Supplier appraisal

D.

Supplier conditioning

Question 35

Can a party gain huge advantages in negotiation from setting room layout?

Options:

A.

Yes, because the host can freely manipulate the other party's mind through setting room layout

B.

No, because the advantages gained from manipulating room layout are short-lived

C.

Yes, because the other party can capitulate to the host

D.

No, because room layout contributes nothing to the negotiation outcomes

Question 36

Active listening in negotiation includes which of the following activities?

1. Hearing

2. Interpreting

3. Rapport

4. Influence

Options:

A.

3 and 4 only

B.

1 and 3 only

C.

1 and 2 only

D.

2 and 3 only

Question 37

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?

Options:

A.

Yes, characteristics include risk management and strategic planning

B.

No, this can be classified as adversarial

C.

Yes, characteristics include arm’s length transactions and minimal communication

D.

No, collaboration does not require commitments from either side

Question 38

An adversarial style of negotiation is appropriate where the buyer has greater bargaining power over the supplier. In what other situations may the buyer adopt this style of negotiation?

Options:

A.

When the supplier is a monopolist and some advantages need to be gained from the agreement

B.

In a market that is full of alternative sources and substitute products

C.

Where there is a single sourcing strategy to eliminate the competing suppliers and retain only one

D.

In a market where the buyers are competing for fewer supply sources

Question 39

Which of the following will help to indicate personality preferences in four dimensions?

Options:

A.

Thomas-Kilmann Conflict Resolution model

B.

Intelligence quotient

C.

Mill's RESPECT mnemonic

D.

Myers-Briggs Type Indicator

Question 40

At which stage in a negotiation would questions be asked to obtain missing information?

Options:

A.

The bargaining stage

B.

The proposing stage

C.

The opening stage

D.

The testing stage

Question 41

An experienced procurement professional is developing strategies for forthcoming negotiations with her key supplier. To avoid negotiation deadlocks, she identifies the reasons why negotiations could fail. Which of the following are most likely to be reasons for negotiation failures? Select TWO that apply.

Options:

A.

Underlying interests of TOP are overlooked

B.

MIL objectives are well established

C.

Both parties focus on common interests

D.

Buyer helps to create a co-operative atmosphere

E.

Unachievable objectives were set up

Question 42

Which of the following stages of the CIPS Procurement Cycle are typically where commercial negotiations take place?

Contract management and improvement

Develop tender documentation

Market sector analysis

Contract award and implementation

Options:

A.

1 and 4

B.

1 and 3

C.

3 and 4

D.

2 and 3

Question 43

Which of the following is categorised as fixed cost?

Options:

A.

Additional pallet hires due to higher demand in year-end season

B.

Land rental paid in advance

C.

Governments taxes

D.

Raw materials for next year production

Question 44

Which of the following are most likely to be direct costs of a steel manufacturer? Select THREE that apply.

Options:

A.

Cleaning services

B.

Coal

C.

Senior management salary

D.

Insurance for production lines

E.

Scrap metal

F.

Hourly production wages

Question 45

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?

Note taker

Expert

Observer

Chair

Options:

A.

1 and 2

B.

1 and 3

C.

2 and 3

D.

3 and 4

Question 46

Which type of question should be used to receive affirmation on statement?

Options:

A.

Open

B.

Closed

C.

Leading

D.

Narrow

Question 47

The sourcing manager has decided to adopt an adversarial style of negotiation to take advantage of the buyer's greater bargaining power over the suppliers. In what other circumstances should an adversarial relationship be used?

Options:

A.

When the supplier is likely to respond with further concessions to maintain a long-term relationship

B.

In all forms of negotiation as each party is always trying to gain advantage over the other

C.

In a monopoly market as the supplier will respond by conceding quantity discounts

D.

When the issues concerned are non-negotiable, for example, health and safety commitments

Question 48

Which of the following may help the procurement professional increase expert power in commercial negotiation? Select TWO that apply.

Options:

A.

Personality

B.

Official positions

C.

Insights

D.

Ability to compensation

E.

Expertise knowledge

Question 49

Which of the following are signs indicating that TOP is using coercive power in commercial negotiation? Select TWO that apply.

Options:

A.

Demonstrating fairness and respect

B.

Withdrawal of benefits

C.

Use of guilt

D.

Technical expertise

E.

Positive references

Question 50

Which of the following two are recognized strategies to achieve a win-lose outcome?

Making the other party lower its resistance point

Making the other party think this settlement is the best it can achieve

Employ empathy to gain mutual understanding

Using compromise and creativity tactics

Options:

A.

1 and 2 only

B.

3 and 4 only

C.

1 and 3 only

D.

2 and 4 only

Question 51

A procurement manager has been asked to procure 1,000 pens. He suggests to his manager that to obtain the best value for money, they should undertake a competitive bidding process. Would this be the best course of action?

Options:

A.

Yes, as all procurement processes should go through competitive bidding to achieve the best value for money

B.

Yes, the process will be opened up to many suppliers and therefore will result in a cheaper price for the pens

C.

No, competitive bidding should only be used when the value justifies the time spent on the process

D.

No, competitive bidding should only be used in public sector organisations

Question 52

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

Options:

A.

1 and 2 only

B.

3 and 4 only

C.

1 and 3 only

D.

2 and 4 only

Question 53

Which type of power is considered the opposite of coercive power?

Options:

A.

Referent power

B.

Informational power

C.

Reward power

D.

Expert power

Question 54

A negotiation is coming to the end. Both parties haven't had any official commitments. Right before leaving the room, the buyer strongly disagrees with supplier's set up prices and requests a discount. The supplier doesn't reply but nods and smiles. Can the buyer consider these actions as an acceptance?

Options:

A.

Yes, because smiling shows supplier's readiness in signing the deal off

B.

No, because nodding and smiling are etiquette of polite rejection

C.

No, because nodding and smiling are not clear signs of neither acceptance nor rejection

D.

Yes, because negotiator should rely on non-verbal communications only

Question 55

Sumitomo Rubber Industries (SRI) is a Japan-based tyre manufacturer. In order to increase production, SRI is sourcing rubber from Southeast Asian firms. Which of the following micro factors are most likely to shift the balance of power to supplier? Select TWO that apply

Options:

A.

SRI's purchase amount makes significant proportion of supplier revenue

B.

Costs of changing suppliers are high

C.

Rubber from different suppliers is virtually similar

D.

SRI sets up its own rubber plantation

E.

There are no close substitutes for rubber

Question 56

IHL has been supplying to XYZ Ltd for months. XYZ Ltd procurement manager Diana realises that the IHL's input prices are dropping and this is a good time to re-negotiate the price of the contract. She invites IHL representative to XYZ headquarter to make a bargain on the current price. At the opening stage of the negotiation, Diana requests a 10% reduction in price with an increase in volume purchased.

Is Diana's action appropriate in the opening phase?

Options:

A.

Yes, because the negotiation should be done as quick as possible

B.

Yes, because Diana's proposal is a fair trade for both parties

C.

No, because Diana should state exactly the increasing quantity

D.

No, because Diana has put the markers down too soon

Question 57

Different types of relationships impact commercial negotiations. At a negotiation, which one of the following sources would help to support leverage for the buyer?

Options:

A.

Legitimate power

B.

Personality power

C.

Powerful colleagues

D.

Friends power

Question 58

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

Options:

A.

1 and 2 only

B.

1 and 4 only

C.

2 and 3 only

D.

3 and 4 only

Question 59

Absorption costing is when the total cost per each unit of output:

Options:

A.

Includes an allocation towards the activity cost of its creation

B.

Includes an allocation towards indirect costs used in its creation

C.

Includes an allocation for a proportion of total production costs

D.

Includes an allocation of producing an additional unit

Question 60

John Browne, a junior buyer for a corporation, is analyzing 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?

Options:

A.

No, as they only affect the bank's interest rates for loans

B.

Yes, only if the organization can handle foreign currencies in their accounts

C.

Yes, as they can affect profit and turnover

D.

No, exchange rates only apply to the national economy

Question 61

The buyer's bargaining power tends to be relatively higher than supplier's bargaining power in which of the following circumstances?

Options:

A.

The buyer does not have the option to move to an alternative supplier

B.

The buyer's spend takes up a small proportion of supplier revenue

C.

The buyer demand is so urgent that it can’t be postponed

D.

The buyer is large in size relative to its suppliers

Question 62

Where a negotiator uses numerical reasoning with facts as part of their negotiation approach, which of the following techniques will they be adopting?

Options:

A.

Threat

B.

Logic

C.

Emotion

D.

Power

Question 63

In what circumstances is the bargaining power of suppliers likely to be high, in relation to buyer power? Select the THREE that apply:

Options:

A.

The number of suppliers is limited

B.

The demand is not urgent

C.

The product the buyer requires is undifferentiated

D.

The volume required is low

E.

The supplier has highly specialized machinery

F.

The buying firm is large in comparison to the supplier

Question 64

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.

Options:

A.

Framework arrangement

B.

Payment terms

C.

Contract governing law

D.

Requisition

E.

Cultural differences

Question 65

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.

Options:

A.

Economic growth rates

B.

Disruptive technologies

C.

Purchasing spend volume

D.

Sustainability of natural resources

E.

Intensity of competition in a industry

F.

Number of substitute products or services

Question 66

In a negotiation for a new contract, the supplier suggests the buyer to shorten payment period from 45 days to 15 days because they are investing in new facilities to expand the supply capacity. The buyer replies that she can only sign off the deal if the payment period is 30 days or more since it often takes at least 30 days for her company to collect the payment from customers. A permission from senior management is required for this suggestion. In order to ensure that supplier understands the matter, she reiterates it throughout the meeting. Which tactics is she using?

1. Outrageous initial demand

2. Salami slicing

3. Lack of authority

4. Broken record

Options:

A.

1 and 3 only

B.

2 and 4 only

C.

3 and 4 only

D.

1 and 2 only

Question 67

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?

Options:

A.

Activity-based costing

B.

Cost plus costing

C.

Absorption costing

D.

Marginal costing

Question 68

What are the potential sources of conflict between the buyer and supplier? Select TWO that apply.

Options:

A.

Persistent late payment of the supplier’s invoices

B.

Unequal sharing of gains, risks, and costs with the supplier

C.

Requesting early supplier involvement

D.

Planning scheduled visits to the supplier site

E.

Scheduling agreed supplier delivery dates

Question 69

SBL provides contract bathroom furniture and fittings for a wide variety of domestic and commercial clients. To some suppliers, SBL spend claims a large portion of their revenue. But SBL is famous for imposing draconian obligations on these suppliers. Which of the following is most likely to be overarching objective of these suppliers to SBL?

Options:

A.

Charge a higher price to compensate for all the pain SBL has put

B.

Win and keep business with SBL at any costs, even without profits

C.

Drop the business with SBL immediately

D.

Hold on and keep SBL happy but make sure that the business is profitable

Question 70

Economic growth can be measured by...?

Options:

A.

The PPI

B.

GDP

C.

The CPI

D.

SBLI

Question 71

A buying organisation with a low spend but the reputation for paying on-time. In order to increase buyer's leverage in negotiation with suppliers, which of the following should be a priority of this buyer?

Options:

A.

Unclear tender award criteria

B.

Volume separation

C.

Spend concentration

D.

Unavailable technical support

Question 72

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

Options:

A.

1 and 4 only

B.

3 and 4 only

C.

2 and 3 only

D.

2 and 4 only

Question 73

Which of the following is active listening?

Options:

A.

Encouraging the other party to do all the talking

B.

Agreeing with what the other party has to say

C.

Summarising what has been said

D.

Ignoring what the other party has to say

Question 74

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?

Options:

A.

Coalition

B.

Pressure

C.

Consultation

D.

Persuasion

Question 75

The trust is built based on the other party's professional qualifications or proven or certified technical capability or experience is known as...?

Options:

A.

Goodwill trust

B.

Contractual trust

C.

Irrevocable Trust

D.

Competence trust

Question 76

Which of the following are signs indicating that the trust between buyer and supplier has improved? Select TWO that apply.

Options:

A.

Cost overruns

B.

Decreasing percentage of missed delivery overtime

C.

Transparent decision making process

D.

Less frequent communication on business requestsDuplication of effort

Question 77

Which of the following are hardball tactics in negotiations? Select TWO that apply.

Options:

A.

Expand the pie

B.

Snow job

C.

Good cop, bad cop

D.

Sweetening the deal

E.

Bridging

Question 78

In order to mitigate all risks involved in the negotiation process, the buyer only needs to undertake pre-negotiation research on the supply market and establish a BATNA. Is this a correct suggestion?

Options:

A.

No, the buyer should also keep the top management and all employees informed

B.

No, the buyer should make preparations in other areas such as determining the negotiation team

C.

Yes, establishing a fallback position is important because it signifies that the negotiations will reach an impasse

D.

Yes, because the market price should be the target price of the negotiations

Question 79

Which of the following are types of questions that are useful in opening and testing phases of a negotiation? Select the TWO that apply.

Options:

A.

Closed

B.

Narrow

C.

Probing

D.

Leading

E.

Open

Question 80

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?

Options:

A.

Yes, as they can affect profit and turnover

B.

No, exchange rates only apply to the national economy

C.

Yes, only if the organisation can handle foreign currencies in their accounts

D.

No, as they only affect the bank’s interest rates for loans

Question 81

For a commercial negotiation to be effective, the organisation has to identify resources required for negotiation. Which one of the following could help?

Options:

A.

Involve a larger team than the other party

B.

Involve an appropriate cross-functional team

C.

Involve a team of only senior managers

D.

Involve a location-based team only

Question 82

When is the best time in procurement process in which procurement should get involved so that the cost-saving opportunities are the greatest?

Options:

A.

Market consult stage

B.

Post-contract stage

C.

Specification stage

D.

Post-tender stage

Page: 1 / 28
Total 275 questions