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?
When planning a negotiation for sourcing internationally, which of the following divergent positions, and therefore potential conflict areas, should be prepared for? 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:
In a commercial negotiation, a procurement professional negotiates on his company's behalf. The power of buying organisation is the only factor that influences the behaviours of the other party. Is this assumption true?
A buying organisation with a low spend and the reputation for paying late might be viewed by a supplier as which of the following?
Professional buyer is planning for the next negotiation of a simple one-off contract. This negotiation is typified by which of the following? Select TWO that apply.
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 harm trust between buyer and supplier in a commercial relationship? Select TWO that apply.
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 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?
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?
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?
In addition to organisational power, personal power of each negotiator can influence the outcomes of a negotiation. A good negotiator can leverage different sources of power. Is this statement true?
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:
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?
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?
Any commercial negotiation process has only three potential stakeholders: procurement, the budget holders, and the users. Is this TRUE?
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.
Which of the following are most likely to be fixed costs of an airline? Select TWO that apply.
Which of the following are rules of attentive listening? Select TWO that apply.
In what circumstances is the bargaining power of suppliers likely to be high, in relation to buyer power? Select the THREE that apply:
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?
Which of the following should be done by the procurement team at the closing stage of a negotiation? Select TWO that apply.
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?
When might a buyer decide to use a distributive approach to a negotiation with a supplier?
Which of the following are most likely to be indirect costs of a garment manufacturer? Select THREE 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?
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 will positively affect reputational strength of an organisation? Select TWO that apply.
Which of the following constitutes a key element to developing high-trust supplier relationships?
From the principled point of view about negotiation environment, which of the following is a true statement?
Power is used only in adversarial negotiation situations to secure a ‘win’ outcome against the other side. Is this statement correct?
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
Which of the following are intangible values created by trust in business relationships? Select TWO that apply.
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.
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?
What are the potential sources of conflict between the buyer and supplier? Select TWO that apply:
Which of the following are macroeconomic factors that may have influence to the commercial negotiation? Select TWO that apply
If a negotiation results in an offer which does not meet the buyer’s minimum requirements, which of the following could the buyer pursue?
What is the most likely outcome when two organisations with adversarial relationship negotiate with each other?
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?
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?
Which of the following are recognised techniques in contract negotiation? Select THREE that apply.
Which of the following tactics would be appropriate in an integrative negotiation?
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?
An automotive company purchases high quality steel to produce components. The steel is an important raw material and the contract value is enormous. They sources the steel from oversea and contact some potential suppliers. One of the potential suppliers invites the procurement team to their premise for a new business opportunity. Should the procurement team accept the invitation?
According to Fiona Dent and Mike Brent, which of the following are characteristics of Push approach? 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.
When developing a negotiation approach, according to recognised theory (for example, Mendelow), how should stakeholders with high interest but low power be managed?
An organization should develop different relationships which are appropriate to each supplier situation. Which ONE of the following analysis methods could help to identify these?
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?
Cost and price analysis is very important for buyers when they are preparing for a negotiation with supplier. Which of the following is a benefit of knowing supplier's fixed costs?
According French and Raven's base model, which of the following are sources of personal power that can be used in commercial negotiation? Select THREE that apply.
A breakeven analysis uses which of the following aspects as part of the analysis?
Under EU public procurement directives, which of the following are procedures in which there is no commercial negotiation allowed?
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?
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?
Which of the following is the most appropriate approach to investors or shareholders who have high level of influence but low interest in the running of business?
A supplier can produce a product for $160. The supplier sells the product to their client for $240, making a profit before tax of $80 on the transaction. What is the mark-up profit percentage earned by the supplier on this transaction?
If the value of the British Pound in other currencies is strong, which of the following is most likely to occur?
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
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?
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?
Using emotion as a technique of persuasion is ethical. Is this a true statement?
Ma Bell was the sole provider of landline telephone service to most of the US in 1980s. This is an example of...?
In a commercial negotiation, a procurement professional believe that the larger the order quantity from buyer, the lower the supplier's average costs. Is this assumption true?
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
Katie is preparing a negotiation with a strategic supplier. Through deep market analysis, she realises that her company and the supplier have equal bargaining power. Via regular communication, Katie knows that both parties are arguing on amount of liquidated damages and neither party shall concede all of their requirements but some are negotiable. Katie and her counterpart from supplying company still desire a long-term relationship and hope that the meeting between them will be a solution for current situation. Which of the following is the most appropriate approach that Katie should adopt to achieve the above outcome?
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?
A procurement professional is negotiating with a supplier on cleaning service. She realises that there are huge cost-saving opportunities if the supplier agrees to reduce its mark-up and unnecessary employee benefits. Supplier's mark-up and employee benefits are examples of which of the following?
’What specific tests do you carry out to ensure quality is achieved?’ This is an example of which type of negotiation question?