Special Summer Sale Limited Time 65% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: pass65

L4M5 Commercial Negotiation Questions and Answers

Questions 4

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?

Options:

A.

Bargaining

B.

Closure

C.

Proposing

D.

Opening

Buy Now
Questions 5

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:

Options:

A.

Team size

B.

Team makeup

C.

Cultural differences

D.

Timing and location

E.

How the negotiation will be closed out

Buy Now
Questions 6

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:

Options:

A.

Likely to have

B.

Intend to have

C.

Must have

D.

Like to have

Buy Now
Questions 7

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?

Options:

A.

Yes, because the outcomes of negotiation are attributable to the buying organisation

B.

No, because personal power of negotiators also attributes to the outcomes

C.

No, because power of supplier is the only factor that influences the other party

D.

Yes, because buyer's brand, reputation and purchasing spend largely determine the outcomes

Buy Now
Questions 8

A buying organisation with a low spend and the reputation for paying late might be viewed by a supplier as which of the following?

Options:

A.

Develop

B.

Nuisance

C.

Core

D.

Exploit

Buy Now
Questions 9

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

Options:

A.

Profit expressed as a percentage of the selling price

B.

Profit expressed as a percentage of costs

C.

Profit expressed as a percentage of fixed costs

D.

Profit expressed as a percentage of variable costs

Buy Now
Questions 10

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.

Options:

A.

Continuous dialogue with supplier

B.

Total cost of ownership is the most important criterion

C.

Vendor ratings will be used

D.

Arm's-length approach

E.

Pricing is the most important criterion

Buy Now
Questions 11

Which of the following are examples of variable costs?

Building and site rent

Annual insurance premium

Raw materials expenditure

Delivery costs for materials

Options:

A.

1 and 3

B.

2 and 3

C.

1 and 4

D.

3 and 4

Buy Now
Questions 12

Which of the following are most likely to harm trust between buyer and supplier in a commercial relationship? Select TWO that apply.

Options:

A.

Avoidance of submitting important documentations

B.

Reduced response time during contract performance

C.

Resolving some conditions that would otherwise have them competing for resources

D.

Subjective assessment of performance

E.

Exploring a disagreement to learn from each other's insights

Buy Now
Questions 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

Buy Now
Questions 14

Economic growth can be measured by...?

Options:

A.

The PPI

B.

GDP

C.

The CPI

D.

SBLI

Buy Now
Questions 15

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

Buy Now
Questions 16

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?

Options:

A.

Probing

B.

Leading

C.

Reflective

D.

Hypothetical

Buy Now
Questions 17

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

Buy Now
Questions 18

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?

Options:

A.

Yes, because the good negotiator recognises his own power in a negotiation

B.

No, because each person has only one superior source of personal power

C.

Yes, because all sources of power have similar effectiveness in every situation

D.

No, because only organisational power can be leveraged during a negotiation

Buy Now
Questions 19

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:

Options:

A.

Travel expenses to attend the meeting

B.

Other suppliers that could have been used

C.

A detailed pricing structure

D.

A checklist of for future

E.

Evaluation of the negotiator’s performance

F.

A comparison of actual versus set objectives

Buy Now
Questions 20

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

Options:

A.

Analysts published in the mainstream and financial media

B.

Data published by the financial markets and commodity markets and exchanges

C.

The marketing and corporate communications of suppliers

D.

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

Buy Now
Questions 21

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

Buy Now
Questions 22

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?

Options:

A.

In the testing phase

B.

In the proposing phase

C.

At bargaining stage

D.

At opening stage

Buy Now
Questions 23

Any commercial negotiation process has only three potential stakeholders: procurement, the budget holders, and the users. Is this TRUE?

Options:

A.

Yes, and the budget holder is the most important one because of the finances involved

B.

Yes, the role of procurement is to ensure that the technical specifications are fit for purpose

C.

No, only procurement, the user, and suppliers have an interest in the products negotiated

D.

No, other stakeholders, such as directors, and IT might also be interested in the negotiation outcomes

Buy Now
Questions 24

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.

Options:

A.

Incoterms and logistics difficulties

B.

The use and interpretation of body language

C.

Currency exchange fluctuation

D.

The importance of timescales

E.

Payment mechanism

Buy Now
Questions 25

Which of the following are most likely to be fixed costs of an airline? Select TWO that apply.

Options:

A.

Purchase of aircraft

B.

Catering services

C.

Advertising and promotion

D.

Flight crew training

E.

Fuel

Buy Now
Questions 26

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

Buy Now
Questions 27

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

Buy Now
Questions 28

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

Buy Now
Questions 29

Which of the following should be done by the procurement team at the closing stage of a negotiation? Select TWO that apply.

Options:

A.

Gloat publicly about the deal

B.

Seek agreement in principle if TOP does not have the final authority

C.

Tell TOP that they could have got a better deal

D.

Accept ambiguity or uncertainty

E.

Leave the meeting as soon as possible

Buy Now
Questions 30

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?

Options:

A.

Legitimate power

B.

Personality power

C.

Powerful colleagues

D.

Friends power

Buy Now
Questions 31

When might a buyer decide to use a distributive approach to a negotiation with a supplier?

Options:

A.

When they are dependent on that supplier in the future

B.

When there are various suppliers in the market producing a similar product

C.

When procuring an item that is not strategic to the organisation

D.

When a working relationship is important in the future

Buy Now
Questions 32

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

Options:

A.

Packaging material

B.

Textile

C.

Zips pads

D.

Maintenance materials

E.

Utilities

F.

Depreciation of machinery

Buy Now
Questions 33

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?

Options:

A.

Value engineering

B.

Part substitution

C.

Budget linkages

D.

Compare total cost of ownership

E.

Volume pooling

Buy Now
Questions 34

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

Buy Now
Questions 35

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

Options:

A.

Adopting out-of-date technology

B.

Weak internal coordination

C.

Great gap between reputation and reality

D.

High ethical standards

E.

Strong customer focus

Buy Now
Questions 36

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

Options:

A.

Contract management

B.

Supplier audits

C.

Delivering on commitments

D.

Information gathering

Buy Now
Questions 37

From the principled point of view about negotiation environment, which of the following is a true statement?

Options:

A.

Advantage gained from uncomfortable negotiation environment is likely to last long after the negotiation

B.

The room layout can be seen as a source of tactical advantage

C.

Home advantage should not be exploited to win a temporary advantage

D.

There is no ideal negotiation environment in real life

Buy Now
Questions 38

Power is used only in adversarial negotiation situations to secure a ‘win’ outcome against the other side. Is this statement correct?

Options:

A.

Yes, it only in adversarial negotiation that the use of power is necessary, because of the win-lose outcome

B.

Yes, all negotiations entail a commercial contest which is always adversarial, as the powerful side gains

C.

No, the use of power can be necessary in integrative negotiations to help overcome time-wasting issues

D.

No, the use of power is not important in commercial negotiations as each side only looks for areas of agreement

Buy Now
Questions 39

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

Buy Now
Questions 40

Which of the following are intangible values created by trust in business relationships? Select TWO that apply.

Options:

A.

Higher revenues

B.

Positive feedbacks from customers

C.

More focus on core business

D.

Increasing response time to request

E.

Frequent conflict escalation

Buy Now
Questions 41

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.

Options:

A.

Minimal sharing of information

B.

Requirement to exceed expectations

C.

Degree of mutual commitment

D.

Use of power to seek the best possible deal

E.

Requirement to secure quality of supply

Buy Now
Questions 42

All of the following shift the supply of watches to the right except...?

Options:

A.

An advance in the technology used to manufacture watches

B.

A decrease in the wage of workers employed to manufacture watches

C.

An increase in the price of watches

D.

Manufacturers' expectation of higher watch prices in the future

Buy Now
Questions 43

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?

Options:

A.

Best Alternative to a Negotiated Agreement

B.

The Bargaining Mix

C.

Offer of Agreement

D.

Walk Away Point

Buy Now
Questions 44

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

Buy Now
Questions 45

Which of the following is NOT a barrier to entry in a monopolized market?

Options:

A.

The costs of production make a single producer more efficient than a large number of producers

B.

A single firm is very large

C.

The government gives a single firm the exclusive right to produce some good

D.

A key resource is owned by a single firm

Buy Now
Questions 46

Which of the following are macroeconomic factors that may have influence to the commercial negotiation? Select TWO that apply

Options:

A.

Equilibrium price

B.

Supply curve

C.

Unemployment rate

D.

Bargaining power of supplier

E.

Rising import tariffs

Buy Now
Questions 47

If a negotiation results in an offer which does not meet the buyer’s minimum requirements, which of the following could the buyer pursue?

Options:

A.

PESTLE

B.

BATNA

C.

ZOPA

D.

STEEPLE

Buy Now
Questions 48

What is the most likely outcome when two organisations with adversarial relationship negotiate with each other?

Options:

A.

Deadlocked

B.

Lose lose

C.

Win lose

D.

Win win

Buy Now
Questions 49

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?

Options:

A.

Avoiding

B.

Compromising

C.

Competing

D.

Collaborating

Buy Now
Questions 50

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?

Options:

A.

No, as the risk will sit with the buyer as the value of GBP sterling may increase

B.

No, as the value of the supplier’s currency may decrease

C.

Yes, as the risk will sit with the supplier

Buy Now
Questions 51

Which of the following are recognised techniques in contract negotiation? Select THREE that apply.

Options:

A.

Framing and reframing

B.

Ratification

C.

Pacing and leading

D.

Validation

E.

Role ethics

F.

Anchoring

Buy Now
Questions 52

Which of the following statements about oligopoly is incorrect?

Options:

A.

A few firms play an important role in the sale of a product

B.

Oligopolistic firms recognize their interdependence

C.

One firm's behaviour is a function of what its rivals do

D.

Prices in oligopoly are predicted to fluctuate widely and frequently

Buy Now
Questions 53

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

Options:

A.

Lowball/Highball

B.

Take it or leave it

C.

Expanding the Pie

D.

Mother Hubbard

Buy Now
Questions 54

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

Buy Now
Questions 55

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?

Options:

A.

No, this approach requires honest and open discussion

B.

Yes, the supplier must know what buyer wants and how to provide that even when the buyer is silent on these matters

C.

Yes, the buying organisation must maximise its gain, even at the detriment of the other party

D.

No, holding back information will prompt the supplier gain higher negotiation power

Buy Now
Questions 56

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?

Options:

A.

No, because negotiating over telephone is enough to collect information on supplier's capability

B.

Yes, because the visit would increase the buyer's bargaining power

C.

Yes, because this is an opportunity to assess the supplier's capacity

D.

No, because the travel would incur unnecessary costs

Buy Now
Questions 57

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

Buy Now
Questions 58

Which of the following are most likely to help buyer become preferred customer in supplier's perspective? Select TWO that apply.

Options:

A.

Onerous supplier terms and conditions

B.

Compliance with agreed repair lead time

C.

Shorter payment period

D.

Reduction in delivery errors

E.

Ensuring an increased number of repeat orders

Buy Now
Questions 59

When developing a negotiation approach, according to recognised theory (for example, Mendelow), how should stakeholders with high interest but low power be managed?

Options:

A.

Minimal effort

B.

Key player

C.

Keep informed

D.

Keep satisfied

Buy Now
Questions 60

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?

Options:

A.

Resources and cost spectrum

B.

The relationship spectrum

C.

The color spectrum

D.

A spectrum of non-critical items

Buy Now
Questions 61

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?

Options:

A.

Adopt opaque processes

B.

Increase the spend value

C.

Raise the transactional costs to do business

D.

Pay the suppliers on time

Buy Now
Questions 62

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?

Options:

A.

The buyer would be able to know the right volume to reach break-even point

B.

The buyer would be able to know the point at which the supplier would reject the offer

C.

With the sole understanding of supplier's fixed cost, the buyer would be able to know the volume at which supplier maximises their profit in short-run

D.

The buyer would be able to get a comprehensive picture of supplier's efficiency

Buy Now
Questions 63

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

Options:

A.

Referent power

B.

Informational power

C.

Reward power

D.

Expert power

Buy Now
Questions 64

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.

Options:

A.

Purchasing spend power

B.

Expert power

C.

Competitive power

D.

Trademark power

E.

Coercive power

F.

Legitimate power

Buy Now
Questions 65

A breakeven analysis uses which of the following aspects as part of the analysis?

Options:

A.

Fixed cost

B.

Buying cost minus variable cost per unit

C.

Variable cost

D.

Selling price minus variable cost per unit

Buy Now
Questions 66

Under EU public procurement directives, which of the following are procedures in which there is no commercial negotiation allowed?

Options:

A.

Innovation Partnerships

B.

Open Procedure

C.

Restricted Procedure

D.

Competitive Dialogue

E.

Competitive Procedure with Negotiation

Buy Now
Questions 67

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

Buy Now
Questions 68

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?

Options:

A.

Reward

B.

Expertise

C.

Coercive

D.

Informational

Buy Now
Questions 69

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?

Options:

A.

Engage and keep them satisfied

B.

Engage and consult with them regularly

C.

Keep these people inform through general communication media

D.

Manage them closely

Buy Now
Questions 70

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?

Options:

A.

33%

B.

50%

C.

67%

D.

159%

Buy Now
Questions 71

If the value of the British Pound in other currencies is strong, which of the following is most likely to occur?

Options:

A.

The price of UK products in the UK will rise

B.

The price of UK products in the UK will fall

C.

The price of UK products abroad in foreign currency will fall

D.

The price of UK products abroad in foreign currency will rise

Buy Now
Questions 72

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

Buy Now
Questions 73

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

B.

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

C.

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

D.

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

Buy Now
Questions 74

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?

Options:

A.

1 and 2 (Note taker and Expert)

B.

1 and 3 (Note taker and Observer)

C.

2 and 3 (Expert and Observer)

D.

3 and 4 (Observer and an unspecified fourth option - assumed error)

Buy Now
Questions 75

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

Options:

A.

Yes, because it may appeal to the supplier’s goodwill

B.

No, because emotions should not be involved in business agreements

C.

Yes, because use of emotion will always lead to agreement

D.

No, because it’s not the best route to enhance relationships

Buy Now
Questions 76

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

Options:

A.

Monopsony

B.

Monopoly

C.

Monopolistic competition

D.

Perfect competition

Buy Now
Questions 77

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?

Options:

A.

No, because supplier's average costs will rise as the buyer's demand increases

B.

No, because the supplier may need to invest in new facility to meet buyer's demand

C.

Yes, because larger order quantity will bring a considerable profit to supplier

D.

Yes, because larger order quantity will always enable the supplier to reach its economy of scale

Buy Now
Questions 78

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

Options:

A.

2 and 3 only

B.

2 and 4 only

C.

1 and 3 only

D.

1 and 4 only

Buy Now
Questions 79

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?

Options:

A.

Avoiding approach

B.

Competing approach

C.

Compromising approach

D.

Accommodating approach

Buy Now
Questions 80

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

Buy Now
Questions 81

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?

Options:

A.

Spend waterfall

B.

Spend cube

C.

Spend tree

D.

Addressable spend

Buy Now
Questions 82

’What specific tests do you carry out to ensure quality is achieved?’ This is an example of which type of negotiation question?

Options:

A.

Leading

B.

Probing

C.

Reflective

D.

Closed

Buy Now
Exam Code: L4M5
Exam Name: Commercial Negotiation
Last Update: Mar 29, 2025
Questions: 275

PDF + Testing Engine

$57.75  $164.99

Testing Engine

$43.75  $124.99
buy now L4M5 testing engine

PDF (Q&A)

$36.75  $104.99
buy now L4M5 pdf