REVISION QUESTION

1. Which of the following is the source of information on Micro-economic factors?

A. Analysis of published in the mainstream and financial media

B. The marketing communication of suppliers
C. Data published by financial markets and commodity markets and exchanges
D. Publish economic indices such as the retail price index
2. There are many factors which will influence supplier pricing decisions, Select the THREE external
factors that may apply

A. Customers perceptions of value

B. Cost of production
C. Price elasticity of demand
D. Environmental factors affecting the cost raw materials
E. Where the product is in its lifecycle
F. Objectives of the organization

3. Which of the following are stages within the negotiation process?

I. Planning and preparation

II. Arguing and persuasion
III. Accepting hospitality
IV. Testing and proposing

A. 1 and 3 only
B. 2 and 3 only
C. 1 and 4 only
D. 2 and 4 only

4. Different types of relationship impact on commercial negotiations. At a hlkklnegotiation which one of

the following sources would help to support leverage for the buyer?
A. Legitimate power
B. Personality power
C. Powerful colleagues
D. Friends power

5. Ranjit is facilities category buyer for a hospital and is managing and overseas sourcing project for
security guard in clothing and personal protective equipment Ranjit is aware that foreign exchange
fluctuation can create risk for his organization and would like to remove the risk . Ranjit has asked the
international supplier to quote GBP sterling. Will Ranjit approach remove the fluctuation tricks for the
hospital?
A. Yes as the value of GBP sterling may increase
 B. No as the risk will sit with the buyer
C. Yes as the risk will sit with the supplier
D. No ,as the value of the suppliers currency may decrees

6. Which of the following are elements of prices negotiations select two that apply
A. Price arrangement
B. sales tax payable
C. terms of payment
D. cash flow management
E. administration costs

7. What type of question can be used to ascertain a particular effect from a supplier in negotiation
A. closed
B. rhetorical
C. open
D. divergent

8. A procurement manager is considering negotiating variable pricing for a contract duration of 12

months would this be the right thing to do?

A. No this will not enhance the buyer supplier relationship

B. No because it will prove difficult to budget for the duration of the contract and provide
financial uncertainty
C. Yes because this method of pricing will always provide value for money
D. Yes because it will build relationship with the supplier and provide a stronger platform for the
next contract renewal

9. Which of the following are likely to be features of Strategic negotiation select two that apply

A. it's settled issue involving rescheduling daily deliveries

B. it is conducted at higher levels of management
C. it is distributive because each party tries to achieve greater again
D. it Focuses on the issue of affecting the organization's competitive advantage
E. it cover the operational issue arising in the cross-functional work groups

10. Procurement professionals should understand various costing methods that supplier may use when
preparing their prices and setting targets for their negotiations there are two main approaches used in
calculating the cost of products and services one of which is ‘ marginal costing ‘which of the following is
a feature of “marginal costing” approach to pricing?

A. Product costing that uses fixed cost only and provide a sufficient mark-up to cover variable cost
and profit
B. Product costing that uses variable cost only and provide a sufficient mark-up to cover fixed cost
and profit
C. Product costing that includes fixed cost as a fair proportion of variable cost and a mark-up
D. product costing that includes variable cost as a fair proportion of fixed cost and a mark-up

11. During negotiations which of the following would be manageable questions

 I. What do you think of our proposal?
II. Are you saying these are the only acceptable terms?
III. Here’s is how I see the situation don't you agree?
IV. Can you tell us how you come to that conclusion?

A. 1 and 2 only
B. 3 and 4 only
C. 1 and 4 only
D. 2 and 3 only

12. At the end of a negotiation the process of having the outcomes of negotiation approved and
endorsed is called?

A. Summation
B. Confirmation
C. Ratification
D. Aggregation

13. The bargaining power of suppliers is likely to be high in relation to a buyer in which of which one of
the following situation

A. the volume purchased by the buyer is important to the supplier

B. the switching cost for the buyer is low
C. the supplier has limited pre-negotiation information about the buyer
D. the supplier has rare specialist processes machinery or expertise

14. Any commercial negotiation process has only three potential stakeholders procurement the budget
holder and the users is this true?
A. Yes and the budget holder is the most important because of the finances involved
B. Yes the role of procurement is to ensure that the technical specification are fit for the purpose
C. No only procurement ,the uses and the supplier have interest in the products negotiated
D. No other stakeholders such as directors and IT might also be interested in the negotiation
outcomes

15. In preparation for negotiation with external organization which of the following resources are
required by an organization to ensure a positive outcome?

A. initiate a re-location plan

B. invest in appropriate lightning and comfortable seating
C. involve appropriate colleagues
D. involve as many colleagues as possible

16. Negotiating bet value should follow which stage of the sourcing process?
A. appraise suppliers
B. award the contract
C. analyse quotations
 D. develop the contract terms

17. Which of the following are Tactics of distributive bargaining?

1. Withholding information that may open common ground

2. coercing in the other party to accept your position
3. Finding common ground between the parties
4. being open about all your needs

A. 1 and 4 only
B. 2 and 3 only
C. 1 and 2 only
D. 3 and 4 only

18. There are two approaches that can be pursued when doing commercial negotiation integrative or
distributive which of the following features are associated with the distributive approach to negotiation?

A. The parties aim to share the gains from the agreement

B. there is a fair distribution of profits between the winner and the loser
C. an open book summary of its coast is provided by the supplier
D. the negotiation is conducted in an adversarial type

19. Absorption costing attempt to calculate the total cost of producing additional units traditionally this
is completed by determining the input of resources consumed in production period and the overhead
cost. which of the following is a challenge of absorption costing?

A. Attributing a fair amount of fixed cost to each unit of production

B. Attributing fair cost drivers and cost pools to each unit of production
C. understanding the profit element as a percentage of course
D. understanding the profit element as a percentage of selling price

20. Which of the following is an example of an indirect cost?

A. raw materials required to produce a widget

B. the staff wages of those producing a widget
C. maintaining of widget production line equipment
D. the packaging used on each widget production

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

A. lowball highball/ highball

B. take it or leave it
C. expanding the pie
D. Mother Hubbard

22. Fast & East limited as a global fast food retailer is in negotiation with the major meat supplier the
supplier is asked for a 25 price increase which fast & Easy are strongly resisting. The surprise justify this
increased by stating how the currency fluctuation an unstable economic climate and rising transport
costs have necessitated this increase which persuasion tactic is the supplier using?

A. Rational Persuasion
B. inspirational appeal
C. personal appeal
D. coalition

23. A supplier have offered international football tickets to the procurement manager whilst they are in
the middle of a contract negotiation what should the procurement manager do?

A. Accept the offer of the tickets as these will enhance the relationship between both parties
B. Accept the offer is this will not affect the relationship with the supplier
C. Reject the offer as this may be seen as conflict of interest during the negotiation
D. Reject the offer as the procurement manager will have to repay the kind offer

24. Information is a key source of power in establishing power and leverage select three reliable source
of information supply can gather on purchases

A. published accounts
B. personal emails
C. national press
D. investment reports
E. past negotiations
F. blogs

25. Which of the following would identify that a pull approach to influence is being adopted?

A. One party gains compliance from the other

B. one-party exerts authority over the other
C. one party is able to persuade the other
D. one-party threatened to sanction the other

26. coercive power is likely to be displayed in distributive negotiation approach this may originate from
one organization that has more bargaining power than the other or one individual wielding higher
positional power than the opponent . Why is coercive power discouraged in negotiation and supplier
relationship management?

A. Because it's a secure immediate compliance from the supplier

B. because it provides greater advantage to the buyer in the short term
C. because it provides unconventional leverage in the negotiation process
D. because it might drive away under-performing suppliers

27. When looking into push and pull techniques of influencing the push approach has which of the
following characteristics?

I. exerts power
II. Persuasion
 III. secured compliance
IV. secure commitment

A. 1 and 2 only
B. 1 and 3 only
C. 2 and 4 only
D. 3 and 4 only

28. One of the most important steps in preparing for negotiation is to appraise the relative power of the
parties. The buying organization 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
negotiation strategy. In what situation is the Bargaining power of the buyers likely to Be Higher relative
to suppliers?

A. the supplier product project is critical to buyers business

B. there are fewer by allergic to suppliers
C. the buyer in requirement is urgent and cannot be postponed
D. they are few supplier relative to the buyer

29. A procurement manager has been asked to produce 1000 pens. he suggest to his manager that to
obtain best value for money they should undertake competitive bidding process would with this be the
best course of action?

A. Yes all procurement process should go through competitive bidding in order to achieve best
value for money
B. Yes the process will be open up too many suppliers and therefore will result in a cheaper price
for the pens
C. No competitive bidding should only be used when the value justifies the time spent on the
process
D. No competitive bidding should only be used in public sector organization

30. Amelia need to negotiate prices with a potential client that she has not met before she was due to
attend their offices next week but the meeting has been cancelled. The potential client has offered a
telephone call as an alternative but Amelia has declined the offer as she feels negotiation cannot
succeed without a face-to-face meeting is this the right decision?

A. Yes because negotiation for the first time it is essential to meet face-to-face
B. Yes because you can only do negotiation face-to-face to observe nonverbal cues
C. No because it can be a useful introduction for conditioning expectation prior to a face-to-face
meet
D. No because telephone negotiation enable stronger arguments which lead to better influence

31. A procurement manager is about to secure a deal with an overseas supplier .He suggested to his line
manager that securing a fixed price during the contract period of 36 months would be beneficial for the
organization would this be the right thing to do?

A. Yes because fixing a price will always ensure the best deal possible
 B. Yes because exchange rate of fluctuate and fixing the price will help provide financial certainty

C. No because this may cause a disruption in supply as oversea exchange rates may change

D. No because fixing pricing with foreign suppliers for more than 24 months is an unethical

32. Sunita and her team are in a negotiation with the supplier. A member of the suppliers negotiation
team states that meeting your needs is meeting my needs because we are in this together what type of
negotiation are the supplier and buyer undertaking?

A. adversarial negotiation

B. distributive negotiation

C. lose lose negotiation

D. integrative negotiation

33. Listen is a key activity in any negotiation ,the activity of listening in negotiation includes which two
processes?

I. Hearing

II. Interpreting

III. Rapport

IV. Influencing

A. 1 and 2 only

B. 2 and 3 only

C. 1 and 3 only

D. 2 and 4 only

34. A wide range of Factor may be taken into account by supplier when sitting or negotiating prices
which of the following are external Factor in pricing decisions? Select two that apply.

A. competition in the market

B. cost of production

C. where the product is in the life cycle

 D. customer perception of failure

E. cost of sales

35. As a buyer you have been let down by one of your new supplier and you have lost some trust in the
ability to perform the contract you are keen to repair the relationship as you know that market is
narrow and not many supply can fulfill your needs ,What approach would be appropriate to start to
rebuild the relationship?

A. A reduction in the price for the remainder of the contract

B. Acknowledgement by the supplier of the need to improve

C. An offer of a hospitality package for yourself and the partner

D. Amend the key performance indicator so that the supplier can achieve them

36. A Batna is always required at the start of negotiation is this statement correct

A. Yes a buyer always needs an alternative plan to Leverage

B. Yes because it is mandatory as part of the negotiation strategy

C. No it may not be used and therefore not needed

D. No fall-back position can be produced as the negotiation progress

37. The influence of Culture has significant impact on international negotiation which one of the
following communication skill could support a successful outcome?

A. Understanding a language

B. Understanding position in an organization

C. Understanding the social position

D. Involving position

38. Which of the following would be considered appropriate influence technique within contract
negotiation ? select THREE that apply

A. Ratification
 B. Anchoring

C. Framing and re-framing

D. Pacing and leading

E. Rule ethics

F. Validation

39. In which of the following is the buyers bargaining power relatively high compared to the supplier?

I. Few substitute products in the market

II. Demand is not urgent

III. The buyer can produce in house

IV. There are limited supplier in the market

A. 1 and 4 only

B. 1 and 2 only

C. 2 and 3 only

D. 2 and 4 only

40. Which of the following is a Persuasion technique that may include a statement of negative
consequence?

A. Logic

B. Compromise

C. Threat

D. Bargaining

41. Rachel a junior buyer is about to leave her first negotiation with an international supplier. she is
concerned that the supplier may not respect her authority as they have previously only dealt with her
manager she has decided to hold a negotiation at her Office which of the following will be the biggest
benefit for Rachel of a home negotiation?

A. Familiarity with the environment

 B. The immediate presence of managerial support

C. Less traveling time required

D. The sense of obligation felt by the supplier

42. What are the potential source of conflict between the buyer and the supplier select two that apply

A. Persistent late payment of supplier invoices

B. Scheduling athletes a delivery dates

C. Unequal sharing of kings risk and cost with the supplier

D. Requesting early supplier involvement

E. Planning schedule site visit to the suppliers side

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

I. Price elasticity of demand

II. Environmental Factor

III. Risk management

IV. Stages in the product life cycle

A. 1 and 2 only

B. 1 and 4 only

C. 2 and 3 only

D. 3 and 4 only

44. Effective listening is important in integrative negotiation is the statement correct?

A. Yes as it allows issues to be shared and understood between parties

B. Yes it means that the supplier attempts at negotiation can be stopped quickly with the
reasoning
 C. No as what the other party has to say is not important

D. No in effective listening is important only in a distributive negotiation

45. Dave a procurement manager of XTC company has been tasked with running a high value, long term
procurement. Dave as part of his negotiation strategy is reviewing how the country economy may affect
his negotiation position. In which of the following would Dave find reliable macroeconomic information?

I. Company accounts

II. Stock exchange

III. Government forecast

IV. Trade fairs

A. 1 and 2 only

B. 3 and 4 only

C. 1 and 4 only

D. 2 and 3 only

46. Mike is a junior buyer who has been working for a manufacturing organization for two years
specialising in purchasing procedures over this time he has built good relationship within his team and
with other departments which of the following source of power is Mike likely to possess?

A. Position

B. Personality

C. Reward

D. Coercive

47. Which task should be carried out in a closure stage of commercial negotiation?

A. Defining limits

B. Building rapport

C. Research and understanding

D. Obtain ratification
48. A procurement manager is preparing for negotiation with a major supplier .He is holding back some
important information to ensure he has the stronger negotiation power .Is this approach appropriate
when considering using an integrative negotiation Style?

A. No because this was not discovered the supplier resistance point

B. No because this is not being open about the requirement

C. Yes because it will discover the supplier resistant point

D. Yes because it will maximize the outcome for the procurement manager

49. Following commercial negotiation the outcome can be assessed by which of the following ?

A. Reflecting on performance

B. Reflecting on risk

C. Reflecting on special condition

D. Reflecting on letter of acceptance

50. Which of the following can be considered as on the job training

I. Taught workshop

II. Feedback

III. Coaching

IV. Anchoring

A. 1 and 2 only

B. 2 and 3 only

C. 1 and 3 only

D. 3 and 4 only

51. Which of the following source of personal power in commercial negotiations?

I. Expect power

II. Informational power

III. Reward power

 IV. Charismatic power

A. 1 and 2 only

B. 2 and 3 only

C. 1 and 3 only

C. 2 and 4 only

52. Steph is in tough negotiation with an internal stakeholder who believe the product she has
developed is not suitable for use. Steph has decided to change her influencing tactic to bring the
stakeholder on board. She has suggested the stakeholder sits in the product development meeting and
voices their opinions to help develop the product which of the following influence techniques is Steph
using?

A. Consultation

B. Coalition

C. Ingratiation

D. Pressure

53. Break-even analysis can be used to determine when a business makes neither a profit nor loss. The
break-even point can be calculated by using which of the following formula?

A. Fixed cost/( selling price - variable cost)

B. Total cost /(planned sales level - variable cost)

C. Variable cost/( total cost - selling price)

D. Planned sale level /(variable cost - fixed cost)

54. Expect influencing over people by means other than using authority or power is often required in
contract negotiation. Using emotions as a technique is persuasion is ethical. Do you believe this is true
or a fair statement?

A. Yes because it will appeal to the suppliers Goodwill

B. No because emotion should not be involved in business agreements

C. Yes because failure to comply would encourage an agreement

D. No because it is not the best route to enhance credibility

55. Effective objective for a negotiation have which of the following characteristics? Select two that
apply?

A. Measurable

B. Tactical

C. Specific

D. Accountable

E. Reliable

56. Which of the following are the characteristics of push approach?

I. Exerting power

II. Aimed at securing compliance of often against resistance of influence

III. Influences may not be consciously aware of the process

IV. Persuasion or interpersonal influence

A. and 2 only

B. and 4 only

C. and 4 only

D. 1 and 3 only

57. Involving collegues is one appropriate resources required to support a supplier negotiation, which
other resources are required to support a supplier negotiation? Select two that apply

A. Goods received note

B. Personnel

C. Purchase order

D. Time order acknowledgement

58. A manufacturer makes to product A&B the total cost to make product A is $80 and it sells for $105,
product B costs $90 and sells for $120.What would the mark-up value be for product A and B
respectively?
 A. 25% and 30%

B. 34.3 % and 32.3 %

C. 23.8% and 25%

D. 31.3% and 33%

59. Which negotiation approach is focused on a win-lose outcome

A. Collaborative

B. Adversarial

C. Compromise

D. Integrative

60. A suppllier’s expenditure which can be attributed to a specific product is known as'

A. Fixed cost

B. Indirect cost

C. Direct cost

D. Sunk cost