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Commercial Negotiation

Last Update 2 days ago
Total Questions : 223

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Question # 1

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

Discussion 0
Question # 2

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.  

Flightcrew training

E.  

Fuel

Discussion 0
Question # 3

Which of the following is the process enabling the buyer to sharewith 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

Discussion 0
Question # 4

A buying organisation with a low spend but the reputation for paying on-time. In order to increase buyer's leverage in negotiation with suppliers, which of the following should be a priority of this buyer?

Options:

A.  

Unclear tender award criteria

B.  

Volume separation

C.  

Spend concentration

D.  

Unavailable technical support

Discussion 0
Question # 5

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.  

Budgetlinkages

D.  

Compare total cost of ownership

E.  

Volume pooling

Discussion 0
Question # 6

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

Discussion 0
Question # 7

Which of the following are hardball tactics in negotiations? Select TWO that apply.

Options:

A.  

Expand the pie

B.  

Snow job

C.  

Good cop, bad cop

D.  

Sweetening the deal

E.  

Bridging

Discussion 0
Question # 8

Neville is a senior procurement specialist in a automaker. He has good relationship with his team mates and other departments because of his amazing purchasing skills and kindness. Which of the following sources of power is Neville likely to possess?

Options:

A.  

Reward

B.  

Referent

C.  

Legitimate

D.  

Coercive

Discussion 0
Question # 9

Collaborative approach in negotiation not only can fully satisfies the concerns of both, but also ensure that neither party will seek to be opportunistic in later time during the life of the contract. Is this statement true?

Options:

A.  

Yes, because all parties must have exactly the same goals in integrative negotiation

B.  

No, because any party may leverage its own advantage during the contract

C.  

Yes, because both parties have well understood each other's goals when they engage in collaborative negotiation

D.  

No, because the parties will always find a compromise solution in integrative approach

Discussion 0
Question # 10

How contribution is calculated in break-even analysis?

Options:

A.  

Fixed costs divided by variable costs

B.  

Variable costs subtracted from price

C.  

Price minus fixed costs

D.  

Variable costs subtracted from fixed costs

Discussion 0
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