Which of the following constitutes a key element to developing high-trust supplier relationships?

When considering a new supply source for a product, a procurement professional reviews supplier quotations before negotiation. Which of the following is a direct cost in the supplier’s quotation?

Which of the following types of relationship would possibly lead to a distributive negotiation?

A procurement professional is sourcing low value items. He conducts market analysis and realise that these items can be provided by many suppliers and switching cost between suppliers is relatively low. He also assume that the relationship between buyer and supplier will be transactional rather than long-term. According to Thomas-Kilmann conflict model instrument, which of the following is the most appropriate style that the procurement professional should adopt when negotiating with these suppliers?

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?

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?

Which of the following is a disadvantage of absorption costing method?

Which of the following are most likely to be the potential cultural differences that can make transactions with an international supplier more problematic that with local suppliers? Select TWO that apply.

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?

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?

Telephone is most likely to be used for which of the following negotiations?

One of the most important steps in preparing for negotiations is to appraise the relative power of the parties. The buying organisation must assess its bargaining power against that of the supplier it intends to negotiate with. This information is necessary in facilitating the preparation, the negotiation team and the negotiation strategy.

In what situation is the bargaining power of buyers likely to be high relative to suppliers?

Which of the following statements about oligopoly is incorrect?

Lina Rawlins, a senior buyer, asks a supplier: “Can you tell me exactly what you are doing to ensure quality?” What type of question is this?

Which of the following would cause a demand curve for a good to be price inelastic?

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

The stages of commercial negotiation involve which of the following characteristics?

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?

Maria has adopted an adversarial style relationship with her stationery supplier. This relationship style can be characterised by which of the following? Select the TWO that apply.

Which of the following can be prepared before negotiation to achieve an agreement that benefits both parties?

Zone of potential agreement (ZOPA)

Attendee list

Walk-away point

Venue for the talks

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?

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:

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

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 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?

Which of the following is the purpose of using stakeholder support level scale?

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 common forms of collaborating approach in Thomas-Kilmann conflict resolution model? Select THREE that apply.

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

Which of the following will shift the supply curve to the right?

A procurement manager considers using an integrative negotiation approach with shortlisted suppliers. Which factor favours such an approach?

Which type of negotiation strategy should be adopted when the relationship is important and both parties want to help each other achieve their goals?

Which of the following are examples of connected stakeholders in a private organisation? Select TWO that apply.

Stalemate is more likely to happen if both parties trade more variables in a commercial negotiation. Is this assumption true?

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?

During a negotiation, José Gómez (salesperson for a strategic supplier) says his sales director will not approve discounts on initial purchases. However, he offers a 5% discount on the aftercare package, which gives the same monetary saving. Sally Pampas needs both the product and the aftercare package and aims for a 5% discount off the purchase price. To achieve a win-win (integrative) outcome, Sally should:

Which of the following is the most appropriate pricing arrangement in contracts where major inputs are commodities?

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.

A competitive win-lose distributive approach to a negotiation is seeking to:

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?

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

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?

Tony is undertaking a negotiation with a strategic supplier and is frustrated by the lack of progress. He proposes using threats to get what he wants from the negotiations. Is this the correct course of action?

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

JCB is a large manufacturer of heavy machinery. The CPO is going to a negotiation with a Chinese supplier about procuring some major components. He is wondering about balance of power in the negotiation. Which of the following micro factors are most likely to shift the balance of power towards the buying organisation in this commercial negotiation? Select TWO that apply

Which of the following is the first step in the development of negotiation strategies?

Which of the following are typical characteristics of activity-based costing (ABC) method? Select TWO that apply.

A procurement professional is preparing for a negotiation with supplier. She is setting targets for price which her company is seeking to achieve. Which of the following acronyms can help her identify limits before engaging in the negotiation?

When planning an international negotiation, which divergent positions may create potential conflict? Select TWO.

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?

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?

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.

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

Listening is a key activity in negotiation. Which of the following are characteristics of effective listeners?

Showing empathy

Persuading

Paraphrasing

Offering immediate solutions

John is in a negotiation with a supplier. They have decided that their future

relationship will be long term, built on trust and respect, and that gains and risk

will be shared between the parties. The parties will also share ideas and

collaborate on those ideas. Which of the following is this type of relationship?

Maria fears her proposed pricing may be rejected by the supplier. To mitigate this risk, she is preparing a BATNA. Is this the correct approach?

Which of the following are indicative behaviours of a distributive approach to negotiating?

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

One difference between perfect competition and monopolistic competition is that...?

Which of the following are examples of variable costs?

Champion Toys (CT) is negotiating a large order of luxury toys with its supplier, Top Teds. 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?

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

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.

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?

Jayden works as a procurement manager for a large IT organisation. They are currently in their third round of negotiations with an increasingly frustrated software solutions provider. Ben is representing the supplier. Jayden has made eye contact in the latest meeting to confirm his understanding of each of Ben’s points. What communication technique is Jayden demonstrating?

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

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.

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?

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

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?

Rose is a senior buyer from a skiing equipment retailer. Rose is concerned about the current ski boot shortage and the number of invoicing problems from a key supplier. She has decided to have a video conference with Victor, CEO of the supplier. Initially, she intends to threaten Victor with contract termination unless he can improve the situation. However, she is a little wary of doing this as the switching costs are high. Eventually, she decides to seek solutions by encouraging the other party to offer their views and ideas. Rose also prepares some ideas to discuss with Victor. Which of the following is the persuasion method that Rose intends to use in the forthcoming conference?

Which of the following would help build trust in a relationship?

Mediation attendance

Regular meetings

Keep promises

Coercion

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 considered a weakness of a ‘dealer’ style negotiator?

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 ormore 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

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

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?

Which of the following is a description of mark-up?

Which of the following tactics would be appropriate in an integrative negotiation?

Which of the following are internal factors when a supplier is making its pricing decision?

Using emotion as a technique of persuasion is ethical. Is this a true statement?

An integrative negotiation style involves ...

Ma Bell was the sole provider of landline telephone service to most of the US in 1980s. This is an example of...?

Which of the following are examples of push techniques in commercial negotiations? Select TWO that apply.

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

A procurement professional is dissatisfied with how a recent negotiation was concluded. What could they do to improve their negotiation approach?

Seek feedback from the supplier on their recent performance

Prepare for all negotiations with a WIN/LOSE (distributive) approach

Involve lots of people in future negotiations

Undertake reflective practice after each negotiation

Commercial negotiation ends at the award of a contract. Is this statement true?

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

How contribution is calculated in break-even analysis?

Sunita’s supplier states: “Meeting your needs is meeting my needs because we are in this together.” What type of negotiation is being undertaken?

A procurement manager is about to lead an important negotiation with a new IT supplier and has insisted the first meeting takes place at the buying organisation’s office. Will this give one party an advantage?

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.

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 will positively affect reputational strength of an organisation? Select TWO that apply.

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

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

Which of the following is the true statement?

XYZ Ltd is importing goods from overseas. They prefer to pay their supplier in their own currency. Which of the following is a true statement?

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.

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

Where a market consists of a large producer of a product with high market power, it is known as:

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

Win-lose approach is most likely to be associated with which of the following type of relationship?

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

Which of the following is important during the proposing stage of a negotiation?

“A negotiation ends once the meeting finishes.” Is this statement true?

Effective listening is important in integrative negotiations. Is this statement correct?

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

Maria is a professional services category buyer within the National Health Service. Due to 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?

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?

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?

John suggests that a post-negotiation review must involve a meeting with all stakeholders as the most effective method. Is this statement correct?

Jasmine and the IHL sales team have a negotiation scheduled with one of AB’s lead buyers, Samuel, at AB’s premises. This is one of the biggest negotiations that Jasmine has been involved in and is eager not to make any mistakes. Jasmine has heard from a colleague that Samuel tends to adopt an integrative negotiation style. IHL senior management decides to send a team of three members to the negotiation. Jasmine is among the team and she is assigned to check body language, reactions, feeds insight to her leader and to record important comments and information from the meeting for minutes. Which of the following are roles of Jasmine in the forthcoming negotiation? Select TWO that apply.