What is a benefit to the buyer of having a BATNA (best alternative to a negotiated agreement) in a negotiation?
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
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 buyer is preparing for an upcoming negotiation with a large supplier on a contract renewal price. The buyer has undertaken some analysis and is concerned that changes in the organisation’s macro-environment over the last year will result in a price increase. The buyer’s analysis has identified changes in which of the following?
According to Dr. Mari Sako, which of the following is potentially the weakest trust to be built?
Which type of question should be used to receive affirmation on statement?
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?
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?
Where a negotiator uses numerical reasoning with facts as part of their negotiation approach, which of the following techniques will they be adopting?
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?
Which of the following would cause a demand curve for a good to be price inelastic?
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 recognised techniques in contract negotiation? Select THREE that apply.
Which of the following best describes Leverage quadrant in Kraljic matrix?
Listening is a key activity in any negotiation. Which of the following are characteristics of effective listeners?
Which of the following are hardball tactics in negotiations? Select TWO that apply.
End users are the only stakeholders that are involved in the preparation of a negotiation. Is this statement true?
How can having a best alternative to a negotiated agreement (BATNA) support the buyer in a negotiation? Select THREE options that apply.
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?
Active listening in negotiation includes which of the following activities?
1. Hearing
2. Interpreting
3. Rapport
4. Influence
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.
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?
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 most likely to be indirect costs of a garment manufacturer? Select THREE that apply.
Commercial negotiations on prices cover a range of aspects including pricing arrangements. A buyer may negotiate for a 'fixed price agreement'. Why is a fixed price agreement advantageous to the buyer?
The purpose of ongoing supplier relationship management following a negotiation and contract award is that it:
When is the best time for buyer to propose the negotiation agenda to potential supplier?
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
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?
Which of the following is a true statement regarding macroeconomic factors and their potential impact on negotiations?
Which of the following can help both parties to break the vicious cycle of blame when a relationship needs repairing? Select TWO that apply.
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:
What are the potential sources of conflict between the buyer and supplier? Select TWO that apply.
Which of the following is considered a weakness of a ‘dealer’ style negotiator?
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
Any commercial negotiation process has only three potential stakeholders: procurement, the budget holders, and the users. Is this TRUE?
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?
A negotiation process ends once the negotiating meeting has finished. Is this statement true?
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
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?
There are many factors which will influence supplier pricing decisions. Which of the following are external factors that may apply? Select THREE that apply:
Which of the following are most likely to help buyer become preferred customer in supplier's perspective? Select TWO that apply.
When prices of input materials increase, supply curve shifts to the left while demand remains stable. The shift of supply will tend to cause which of the following?
Which of the following is considered a strength of a ‘logical’ style negotiator?
In which of the following scenarios could you adopt a distributive-based negotiation approach?
A garden furniture supplier 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?
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
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.
According to Fiona Dent and Mike Brent, which of the following are characteristics of Push approach? Select TWO 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.
Which of the following are factors that might shift the demand curve for a consumer good to the right?
1. Prices of complementary goods decrease
2. Price of the consumer good decreases
3. Customers' expectation of higher prices in the future
4. Consumer tastes shift toward substitute products
Effective listening is important in integrative negotiations. Is this statement correct?
Which of the following are ways of developing rapport when undertaking a negotiation?
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?
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 types of questions that are useful in opening and testing phases of a negotiation? Select the TWO that apply.
Information generated through Purchase Price Cost Analysis can be useful to the purchaser, by helping to identify which of the following costs relating to the supplier? Select the THREE that apply.
When is the best time to adopt accommodating style according to Thomas-Kilmann conflict mode instrument?
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?
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?
What are the potential sources of conflict between the buyer and supplier? Select TWO that apply.
Macroeconomics can have an impact on commercial negotiations. Is this statement correct?
Which of the following are typical characteristics of activity-based costing (ABC) method? Select TWO that apply.
A procurement manager is preparing for a negotiation with an important supplier. He plans to withhold some crucial information so that his company gains the upper hand in the negotiation. Is this correct when considering using integrative approach to the negotiation?
Which of the following are types of non-verbal communication that could be used during a negotiation meeting? Select THREE that apply.
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?
In preparation for holding negotiation meetings with existing suppliers, category manager Stephen would like to appraise the bargaining strength of his organisation. Which of the following are examples of buyer power? Select TWO that apply:
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.
Which of the following are the most typical characteristics of integrative approach to negotiation? Select TWO that apply.
Which of the following are rules of attentive listening? Select TWO that apply.
Effective listening is important in integrative negotiations. Is this statement correct?
Which of the following tactics would be appropriate in an integrative negotiation?
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
Which of the following is a source of power in organisational relationships?
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?
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?
A supplier has offered international football tickets to the procurement manager while they are in the middle of a contract negotiation. What should the procurement manager do?
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
Which of the following are behaviours that builds trust between the buyer and the supplier in business relationship? Select TWO that apply.