Commercial Negotiation
Last Update Nov 30, 2025
Total Questions : 373
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Which of the following is most likely a consequence of falling interest rate?
Which of the following are hardball tactics in negotiations? Select TWO that apply.
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?
Which of the following are tools that help procurement visualise cost breakdowns of products and services purchased from supplier?
1. Spend candlesticks
2. Spend tree
3. Aggregate expenditure model
4. Spend waterfall
A breakeven analysis uses which of the following aspects as part of the analysis?
Commercial negotiations on price cover various aspects, including pricing arrangements. A buyer may negotiate a fixed-price agreement. Why is a fixed-price agreement advantageous to the buyer?
Which of the following are typical characteristics of activity-based costing (ABC) method? Select TWO that apply.
Which of the following are rules of attentive listening? Select TWO that apply.
Which of the following is most likely to be a reason why a supplier charges its customer higher price after it has reached the break-even point?
An organisation should develop different relationships appropriate to each supply situation. Which ONE of the following analysis methods could help identify these?
Power is used only in adversarial negotiation situations to secure a ‘win’ outcome against the other side. Is this statement correct?
Which of the following will help to indicate personality preferences in four dimensions?
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
In a detailed cost breakdown, a company has a salary cost of 9%, raw materials cost 51% and overheads cost 24%. Which of the following represents the mark-up of that company?
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?
Which type of question is most effective for checking facts in negotiation?
A purchasing organisation is discussing its approach to an upcoming negotiation with a key supplier over a contract for critical new services. They have decided they want to find a Win/Win (integrative) solution. Which TWO of the following would be appropriate in this scenario?
Which of the following will positively affect reputational strength of an organisation? Select TWO that apply.
John suggests that a post-negotiation review must involve a meeting with all stakeholders as the most effective method. Is this statement correct?
A procurement professional is preparing for a negotiation of purchasing non-critical commodity products. He knows that the product can be easily replaced by other substitutes in the market. The negotiation for these products is typified by which of the following?
A purchasing organisation wants a Win-Win (integrative) solution in negotiations with a key supplier. Which TWO approaches would be appropriate?
Which of the following should be done by the procurement team at the closing stage of a negotiation? Select TWO that apply.
An organisation is developing the specification for a capital purchase project. An important stakeholder has doubt on the draft specification. The buyer invites him to the product function meetings. In these meeting the attendees can raise their concerns, the specification development team takes in all the concerns and adjusts the specification accordingly. What kind of technique is the specification development team using?
The bargaining power of buyers is likely to be high in relation to suppliers in which of the following situations?
A procurement manager is considering accepting a fixed price agreement for 12 months with an IT supplier. What are the advantages of fixed price agreements? Select TWO that apply.
Active listening in negotiation includes which of the following activities?
1. Hearing
2. Interpreting
3. Rapport
4. Influence
The procurement manager of a private healthcare provider is running an IT project. Who are the stakeholders?
General public
Pharmaceutical suppliers
Senior Management
Software support developers
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?
Which of the following should be done when undertaking a reflection activity on negotiation? Select TWO that apply.
An adversarial style of negotiation is appropriate when the buyer has greater bargaining power. In what other situation may the buyer adopt this style?
Which of the following would be considered appropriate influencing techniques in contract negotiation? Select TWO that apply.
Stalemate is more likely to happen if both parties trade more variables in a commercial negotiation. Is this assumption true?
Sally is negotiating with an oversea supplier on the price and payment period. Her company and the supplying organisation are equal in bargaining power. The supplier says that they are investing in new facilities and machinery so the payment period should not be longer than 30 days. Sally knows that her company often pays the suppliers after 45 days from the delivery, but at the moment the company has positive cash flow and it is able to pay immediately. Which of the following should be Sally's concession plan?
A supplier’s mark-up on all products is 25%. Supplier's profit margin is...?
Which of the following are examples of variable costs?
Building and site rent
Annual insurance premium
Raw materials expenditure
Delivery costs for materials
A senior buyer analyses the supply market and he realises that his organisation is treated as Exploit according to supplier's perspective model. What does he need to do?
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 are most likely to turn buying organisation into an unattractive customer in supplier's perspective? Select TWO that apply.
Which of the following is definition of elasticity of demand in microeconomics?
In what circumstances is the bargaining power of suppliers likely to be high, in relation to buyer power? Select the THREE 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?
At which stage in a negotiation would questions be asked to obtain missing information?
Which type of question should be used to receive affirmation on statement?
Ranjit is sourcing security clothing and PPE from overseas suppliers. He wants to remove foreign-exchange fluctuation risk and has asked suppliers to quote in GBP. Will this remove the fluctuation risk for the hospital?
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?
A new manager has been appointed with responsibility for an organisation's category which has major impact on organisational cost base and there are little competitions in the supply market. They have an objective to improve supplier cost structures over time. Which of the following should they carry out first?
A procurement manager is considering negotiating variable pricing for a contract duration of 12 months. Would this be the right thing to do?
Finding the middle ground between buyer and supplier by moving towards each other's position is a satisfactory way to complete contract negotiations and maintain ongoing relations for future negotiations. Is this statement correct?
In what circumstances is the bargaining power of suppliers likely to be high, in relation to buyer power? Select THREE that apply.
A procurement manager considers using an integrative negotiation approach with shortlisted suppliers. Which factor favours such an approach?
Where a negotiator uses numerical reasoning with facts as part of their negotiation approach, which of the following techniques will they be adopting?
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?
Ranjit is a facilities category buyer for a hospital in the UK and is managing an overseas sourcing project for security guard clothing and personal protective equipment. Ranjit is aware that foreign exchange fluctuations can create risk for his organisation and would like to remove this risk. Ranjit has asked the international suppliers to quote in GBP sterling. Will Ranjit’s approach remove the fluctuation risk for the hospital?
The buyer's bargaining power tends to be relatively higher than supplier's bargaining power in which of the following circumstances?
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?
Which of the following types of questions are likely to be the most effective to check facts in negotiations?
The stages of commercial negotiation involve which of the following characteristics?
In which of the following scenarios could you adopt a distributive-based negotiation approach?
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
Which type of negotiation strategy should be adopted when the relationship is important and both parties want to help each other achieve their goals?
From the principled point of view about negotiation environment, which of the following is a true statement?
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 characteristics are likely to feature in a partnership relationship in purchasing?
Close collaboration between supplier and buyer
Focus is on price and delivery only
Sharing of information
One-off commercial transactions
At the first stage of CIPS Procurement and Supply Cycle (Understand need), which of the following is the most important duty of procurement professional?
A buyer continually states during negotiation that budget constraints limit their concessions. What tactic is being used?
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 may help the procurement professional increase expert power in commercial negotiation? Select TWO that apply.
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?
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 are most likely to be macro factors that may influence the balance of power in commercial negotiation? Select THREE that apply.
Understanding supplier's mark-up and margin can provide procurement professional a comprehensive insight into supplier's net profits. Is this statement true?
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?
Which of the following are stages within the negotiation process?
Planning and preparation
Arguing and persuasion
Accepting hospitality
Testing and proposing
A purchasing manager is having a negotiation with a supplier to extend the duration of the contract. In order to persuade the supplier to cut the cost by 10%, she promises to shorten the payment period from
45 days to 30 days for each delivery. The supplier's representative does not agree the offer and clearly states that his proposed price is already lower than the market price. The purchasing manager has
used which type of power?
Sunita’s supplier states: “Meeting your needs is meeting my needs because we are in this together.” What type of negotiation is being undertaken?
Different types of relationships impact on commercial negotiations. At a negotiation, which one of the following sources would help to support leverage for the buyer?
Which of the following are ways of developing rapport when undertaking a negotiation?
During a negotiation, a procurement manager suggests that the two companies should split the difference which would benefit both the supplier and buyer. Which persuasion method is she using?
Effective listening is important in integrative negotiations. Is this statement correct?
Procurement gets involved in negotiating purchase requisitions only when there is a value analysis to ensure that only value-adding aspects are included. Is this statement true?
Listening is a key activity in any negotiation. Which of the following are characteristics of effective listeners?
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...
Representatives from South African Department of Health is negotiating the price of hospital drugs with US pharmaceutical companies. Which of the following are most likely to be macro factors that influence the outcomes of the negotiation? Select TWO that apply.
Open questions can be a useful communication tool in negotiations. Is this statement correct?
In which of the following persuasion methods, the influencer uses logics and objective reasons to persuade the others to buy into influencer's ideas?
“Finding the middle ground between buyer and supplier is a satisfactory way to complete contract negotiations.” Is this statement correct?
Which of the following types of question are likely to be the most effective to check facts in negotiations?
Which of the following is the first step in the development of negotiation strategies?
Which of the following is an attribute of a distributive negotiation approach?
Lina Rawlins, a senior buyer for a medical equipment company, is in charge of the company's largest supplier account. Recently, the supplier's performance has declined, leading to more rejected items. Lina has asked the supplier for an urgent meeting. In the meeting, she asks: “Can you tell me exactly what you are doing to ensure quality?”
What type of question is Lina asking?
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?
Which of the following is a source of information on microeconomic factors?
The activity of listening in a negotiation includes which of the following processes?
Hearing
Interpreting
Rapport
Influencing
Which of the following is a challenge when calculating absorption costing?
Community Meal Partners (CMP) is a not-for-profit company that delivers cooked meals to older residents in their homes. CMP uses a fleet of bespoke vans with onboard ovens. In planning the future procurement of the fleet, CMP has conducted a review of the microeconomics of the van supply market and found that the vans are supplied by a monopoly supplier due to patented technology. Which of the following strategies could CMP utilise to optimise its bargaining position with the van supplier?
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 against 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:
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
During which stage in the negotiation process would negotiators use tactics and exchange concessions?
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 against 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 ...
Which of the following are examples of push techniques in commercial negotiations? Select TWO that apply.
TESTED 30 Nov 2025
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