QUESTIONS MARKED IN RED CAME OUT INN THE EXAM

REVI
SIONQUESTI
ON
TODAY!!

1.Whi
choft
hef
oll
owi
ngi
sthesour
ceofi
nfor
mat
iononMi
cro-
economi
cfact
ors?
A.Anal
ysi
sofpubl
i
shedi
nthemai
nst
ream andf
inanci
almedi
a
B.Themar
ket
ingcommuni
cat
ionofsuppl
i
ers
C.Dat
apubl
i
shedbyf
inanci
almar
ket
sandcommodi
tymar
ket
sandexchanges
D.Publ
i
sheconomi
cindi
cessuchast
her
etai
lpr
icei
ndex
2.Therearemanyfact
orswhi
chwi
l
linf
luencesuppl
i
erpr
ici
ngdeci
sions,
Sel
ectt
heTHREE
ext
ernalfact
orst
hatmayappl
y

A.Customer spercept
ionsofv alue
B.Costofpr oducti
on
C.Pri
ceelastici
tyofdemand
D.Envir
onment alfact
orsaffecti
ngt hecostr
awmat
eri
als
E.Wher etheproductisini
tslifecycle
F.Objecti
vesoft heorgani
zation

3.Whi
choft
hef
oll
owi
ngar
est
ageswi
thi
nthenegot
iat
ionpr
ocess?

I
. Planningandprepar
ati
on
II
. Arguingandpersuasi
on
I
II
. Accept i
nghospi
tal
it
y
I
V. Testi
ngandpr oposi
ng

A.1and3onl
y
B.2and3onl
y
C.1and4onl
y
D.2and4onl
y

4.Dif
fer
enttypesofr el
ati
onshi
pimpactoncommerci
alnegoti
ati
ons.Atahl
kklnegot
iat
ion
whichoneoft hefol
lowingsour
ceswouldhel
ptosupportl
ever
ageforthebuyer?
A.Legi t
imatepower
B.Per sonal
itypower
C.Power fulcoll
eagues
D.Friendspower

5.Ranj i
tisfaci
li
ti
escat egorybuy erforahospi t
alandismanagingandov erseassourci
ng
projectforsecuri
tyguar dinclothingandper sonalpr
otect
iveequipmentRanjiti
sawar ethat
foreignexchangef l
uctuationcancr eateriskforhi
sorgani
zati
onandwoul dli
ketoremov ethe
ri
sk.Ranj i
thasaskedt hei nt
ernat i
onalsuppli
ertoquoteGBPst erl
i
ng.WillRanji
tapproach
remov ethef l
uct
uationt r
icksfort hehospital
?
 A.Yesastheval
ueofGBPst erl
i
ngmayi ncrease
B.Noastheri
skwill
sitwit
hthebuy er
C.Yesasther
iskwil
lsitwi
ththesuppli
er
D.No,ast
hevalueofthesuppli
erscurr
encymaydecr
ees

6.Whichofthefoll
owingareel
ement
sofpr
icesnegot
iat
ionssel
ectt
wot
hatappl
y
A.Pricearrangement
B.salestaxpay abl
e
C.termsofpay ment
D.cashf l
owmanagement
E.admi ni
strat
ioncost
s

7.Whattypeofquest
ioncanbeusedt
oascer
tai
napar
ti
cul
aref
fectf
rom asuppl
i
eri
n
negot
iat
ion
A.closed
B.rhetori
cal
C.open
D.divergent

8.Apr
ocurementmanageri
sconsi
deringnegot
iat
ingv
ari
abl
epr
ici
ngf
oracont
ractdur
ati
onof
12monthswouldt
hisbetheri
ghtt
hingtodo?

A.Nothiswil
lnotenhancethebuyersuppl
ierrel
ationship
B.Nobecauseitwil
lprovedif
fi
cultt
obudgetf orthedur at
ionofthecontr
actandpr
ovide
fi
nanci
aluncert
ainty
C.Yesbecausethi
smet hodofpri
cingwil
lalway sprovidevalueformoney
D.Yesbecauseitwil
lbuil
drel
ati
onshipwit
ht hesupplierandpr ovi
deastr
ongerpl
atf
orm
fort
henextcontr
actrenewal

9.Whi
choft
hef
oll
owi
ngar
eli
kel
ytobef
eat
uresofSt
rat
egi
cnegot
iat
ionsel
ectt
wot
hatappl
y

A.i
t'
ssettl
edissueinvolvi
ngrescheduli
ngdail
ydel i
veri
es
B.i
tisconductedathigherlevel
sofmanagement
C.i
tisdistr
ibuti
ve becauseeachpar t
ytri
estoachievegreateragai
n
D.i
tFocusesont heissueofaf f
ect
ingtheorganizati
on'
scompet i
tiv
eadvantage
E.i
tcovertheoperati
onalissueari
singinthecross-f
uncti
onalworkgroups

10.Procurementprof
essionalsshouldunder
standv ar
iouscostingmethodst hatsuppli
ermay
usewhenpr epar
ingtheirpri
cesandsettingt
argetsforthei
rnegotiat
ionstherearetwomai n
approachesusedincalculat
ingthecostofproductsandservicesoneofwhi chis‘ margi
nal
cost
ing‘whichofthefoll
owingisaf eat
ureof“marginalcost
ing”approachtopr i
cing?

A.Productcosti
ngthatusesfixedcostonlyandprovi
deasuf fi
cientmar k-
upt ocover
vari
ablecostandprofi
t
B.Productcosti
ngthatusesvar i
ablecostonl
yandprov i
deasuf fi
cientmark-uptocover
fi
xedcostandpr of
it
C.Productcosti
ngthati
ncludesf i
xedcostasafai
rpr oport
ionofv ari
ablecostandamar k-
up
D.productcosti
ngthati
ncludesv ar
iabl
ecostasaf ai
rproporti
onoff ixedcostandamar k-
up
11.Dur
ingnegot
iat
ionswhi
choft
hef
oll
owi
ngwoul
dbemanageabl
equest
ions

I
. Whatdoy outhi
nkofourpr oposal
?
II
. Areyousayingthesearet
heonl yacceptabl
eterms?
I
II
. Here’
sishowIseet hesit
uationdon'ty
ouagr ee?
I
V. Canyoutellushowy oucomet othatconclusi
on?

A.1and2onl
y
B.3and4onl
y
C.1and4onl
y
D.2and3onl
y

12.Att
heendofanegot
iat
iont
hepr
ocessofhav
ingt
heout
comesofnegot
iat
ionappr
ovedand
endor
sedi
scall
ed?

A.Summat i
on
B.Confi
rmation
C.Rati
fi
cati
on
D.Aggregat
ion

13.Thebar
gai
ningpowerofsuppl
i
ersi
sli
kel
ytobehi
ghi
nrel
ati
ont
oabuy
eri
nwhi
chofwhi
ch
oneofthef
oll
owingsi
tuat
ion

A.t
hevol
umepur chasedbythebuyerisimpor
tantt
othesuppli
er
B.t
heswit
chingcostforthebuyeri
slow
C.t
hesuppl
ierhasli
mitedpre-
negoti
ati
oninf
ormati
onaboutthebuyer
D.t
hesuppl
ierhasrarespeci
ali
stpr
ocessesmachiner
yorexpert
ise

14.Anycommer ci
al negot i
ati
onprocesshasonlyt
hreepotenti
alstakeholdersprocurementthe
budgetholderandt heuser sisthi
strue?
A.Yesandt hebudgethol deri
sthemostimportantbecauseoft hefinancesinvolv
ed
B.Yest her ol
eofpr ocurementistoensur
ethatthetechni
calspecifi
cationarefitfort
he
purpose
C.Noonl yprocurement, theusesandthesuppli
erhaveinter
estinthepr oductsnegotiat
ed
D.Noot herstakehol der
ssuchasdi r
ector
sandITmi ghtal
sobei nt
erestedinthe
negotiat
ionout comes

15.I
nprepar
ati
onf
ornegoti
ati
onwithexter
nal
organi
zationwhi
choft
hef
oll
owi
ngr
esour
ces
arer
equir
edbyanorgani
zat
iontoensur
eapositi
veoutcome?

A.i
nit
iat
ear e-
locati
onplan
B.i
nvestinappropri
ateli
ghtni
ngandcomfor
tabl
eseat
ing
C.i
nvolv
eappr opri
atecol
leagues
D.i
nvolv
easmanycol l
eaguesaspossibl
e

16.Negot
iat
ingbetv al
ueshoul
dfol
l
owwhi
chst
ageoft
hesour
cingpr
ocess?
A.appraisesuppli
ers
B.awardt hecontr
act
 C.analy
sequotat
ions
D.devel
opthecontractt
erms

17.Whi
choft
hef
oll
owi
ngar
eTact
icsofdi
str
ibut
ivebar
gai
ning?

1.Withhol
dinginf
ormationthatmayopencommongr ound
2.coerci
ngintheotherpar t
ytoacceptyourposi
ti
on
3.Fi
ndingcommongr oundbet weenthepart
ies
4.beingopenaboutal lyourneeds

A.1and4onl
y
B.2and3onl
y
C.1and2onl
y
D.3and4onl
y

18.Therearetwoapproachesthatcanbepur
suedwhendoingcommer ci
alnegot
iati
on
i
ntegrati
veordist
ri
buti
vewhichofthefol
lowi
ngfeat
uresar
eassoci
atedwiththedist
ri
but
ive
approachtonegoti
ati
on?

A.Theparti
esaimtoshar et
hegainsfrom theagreement
B.ther
eisafairdi
str
ibut
ionofprofi
tsbet
weent hewinnerandthel
oser
C.anopenbooksummar yofit
scoastisprovidedbyt hesuppl
i
er
D.thenegoti
ati
onisconductedinanadversari
al t
ype

19.Absorpti
oncosti
ngat
tempttocalcul
atethetotal
costofproduci
ngaddit
ional
unit
s
tr
adit
ional
lythi
siscompl
etedbydetermi
ningtheinputofr
esourcesconsumedinproduct
ion
peri
odandt heover
headcost
.whichofthefoll
owingisachall
engeofabsorpti
oncosti
ng?

A.Att
ri
buti
ngaf ai
ramountoff i
xedcosttoeachunitofpr
oducti
on
B.Att
ri
buti
ngfaircostdri
versandcostpool
stoeachunitofproduct
ion
C.under
standi
ngt heprof
itel
ementasapercentageofcourse
D.under
standi
ngt heprof
itel
ementasapercentageofsel
li
ngpr i
ce

20.Whi
choft
hef
oll
owi
ngi
sanexampl
eofani
ndi
rectcost
?

A.r
awmat eri
alsr
equir
edtopr oduceawi dget
B.t
hestaf
fwagesoft hoseproducingawi dget
C.mai
ntai
ningofwidgetproducti
onlineequipment
D.t
hepackagingusedoneachwi dgetproducti
on

21.Whi
choft
hef
oll
owi
ngt
act
icswoul
dbeappr
opr
iat
einani
ntegr
ati
venegot
iat
ion?

A.l
owbal lhi
ghbal
l/highbal
l
B.takeitorl
eaveit
C.expandingthepie
D.Mot herHubbar
d

22.Fast&Eastl
imit
edasaglobalf
astf
oodret
aileri
sinnegoti
ati
onwit
hthemaj ormeat
suppl
iert
hesuppli
eri
saskedfora25pri
cei
ncreasewhichfast&Easyarest
ronglyr
esist
ing.
Thesurpr
isej
usti
fythi
sincreasedbystat
inghowthecurr
encyfl
uct
uat
ionanunstabl
eeconomi
c
cli
mateandri
singtr
ansportcostshavenecessi
tat
edt
hisincr
easewhi
chpersuasi
ontact
ici
s
thesuppl
i
erusi
ng?

A.RationalPer
suasion
B.i
nspi r
ati
onalappeal
C.personalappeal
D.coalit
ion

23.Asuppl
i
erhaveof
fer
edinter
nati
onalfoot
bal
lti
cketstot
hepr ocur
ementmanagerwhi
l
stt
hey
arei
nthemiddl
eofacontr
actnegoti
ati
onwhatshouldtheprocurementmanagerdo?

A.Accepttheof
feroft
heti
cket
sasthesewil
lenhancet herel
ationshipbetweenbot
h
part
ies
B.Accepttheof
feri
sthi
swil
lnotaff
ectt
herelati
onshipwiththesupplier
C.Rej
ecttheoff
erasthi
smaybeseenasconf li
ctofint
erestduringthenegoti
ati
on
D.Rej
ecttheoff
erasthepr
ocurementmanagerwillhavetorepaytheki ndof
fer

24.I
nfor
mati
onisakeysourceofpowerinest
abli
shingpowerandl
ever
agesel
ectt
hreer
eli
abl
e
sour
ceofinf
ormat
ionsuppl
ycangatheronpurchases

A.publi
shedaccounts
B.personalemails
C.nati
onalpress
D.i
nvestmentr epor
ts
E.pastnegotiati
ons
F.bl
ogs

25.Whi
choft
hef
oll
owi
ngwoul
dident
if
ythatapul
lappr
oacht
oinf
luencei
sbei
ngadopt
ed?

A.Onepar
tygainscompli
ancef r
om theot her
B.one-
par
tyexert
sauthori
tyovertheother
C.onepar
tyi
sablet oper
suadetheot her
D.one-
par
tythr
eatenedtosancti
ontheot her

26.coerciv
epowerislikel
yt obedi spl
ayedindi
stri
buti
venegoti
ati
onapproacht hi
smay
ori
ginatefr
om oneorganizationt hathasmor ebargai
ningpowerthantheotheroronei ndi
vi
dual
wiel
dinghigherposi
ti
onal powert hantheopponent.Whyiscoercivepowerdiscouragedin
negotiat
ionandsuppli
errelationshipmanagement ?

A.Becausei
t'
sa secureimmediatecompl i
ancefrom thesuppl
ier
B.becausei
tprov
idesgreat
eradvantaget othebuy eri
ntheshortt
erm
C.becausei
tprov
idesunconventi
onallev
er agei
nt henegoti
ati
onprocess
D.becausei
tmightdri
veawayunder -
performingsupplier
s

27.Whenl
ooki
ngint
opushandpul
ltechni
quesofi
nfl
uenci
ngt
hepushappr
oachhaswhi
chof
thef
oll
owi
ngchar
acter
ist
ics?

I. exert
spower
I
I. Persuasi
on
I
II
. secur
edcompl
i
ance
I
V. secur
ecommit
ment

A.1and2onl
y
B.1and3onl
y
C.2and4onl
y
D.3and4onl
y

28.Oneofthemosti mportantst
epsi nprepari
ngfornegoti
ati
onistoapprai
setherel
ativ
e
poweroftheparti
es.Thebuy i
ngor gani
zati
onmustassessi t
sbargai
ningpoweragainstthatof
thesuppl
ieri
tint
endst onegoti
atewi t
h.Thisi
nfor
mat i
onisnecessaryi
nfaci
li
tati
ngthe
prepar
ati
onthenegotiati
onteam andnegot i
ati
onstrat
egy.I
nwhatsituati
onistheBargai
ning
powerofthebuyersli
kelytoBeHi gherrel
ati
vetosuppli
ers?

A.t
hesuppli
erproductproj
ectiscrit
icalt
obuyer
sbusiness
B.t
her
earefewerbyal l
ergi
ctosuppl ier
s
C.t
hebuyerinrequi
rementisur gentandcannotbepostponed
D.t
heyar
ef ewsuppl i
errel
ati
vet othebuyer

29.Apr ocurementmanagerhasbeenaskedt
oproduce1000pens.hesuggesttohismanager
thatt
oobt ai
nbestvaluef
ormoneytheyshoul
dundert
akecompeti
ti
vebiddi
ngprocesswould
witht
hisbet hebestcour
seofact
ion?

A.Yesallprocurementprocessshouldgothr
oughcompet i
ti
vebiddingi nordertoachi
eve
bestvalueformoney
B.Yesthepr ocesswil
lbeopenupt oomanysuppli
ersandtheref
or ewi l
lresul
tinacheaper
pri
ceforthepens
C.Nocompet i
ti
vebiddi
ngshouldonlybeusedwhenthev al
uejustif
iesthet i
mespenton
theprocess
D.Nocompet i
ti
vebiddi
ngshouldonlybeusedinpubl
icsectororganizati
on

30.Amelianeedtonegoti
atepriceswit
hapot enti
alcl
ientthatshehasnotmetbef or
eshewas
duetoattendthei
roff
icesnextweekbutthemeet inghasbeencancel l
ed.Thepotenti
alcli
ent
hasoffer
edat el
ephonecallasanalter
nati
vebutAmel iahasdeclinedt
heof f
erasshef eel
s
negot
iati
oncannotsucceedwi t
houtaface-t
o-facemeet i
ngisthisther
ightdeci
sion?

A.Yesbecausenegotiat
ionfort
hefir
stti
meitisessenti
alt
omeetf ace-t
o-f
ace
B.Yesbecauseyoucanonl ydonegoti
ati
onface-t
o-f
acetoobservenonverbalcues
C.Nobecauseitcanbeausef uli
ntr
oducti
onforcondit
ioni
ngexpectat
ionpriortoaface-
to-
facemeet
D.Nobecausetelephonenegoti
ati
onenablestr
ongerargument
swhi chleadtobetter
i
nfluence

31.Aprocurementmanagerisaboutt
osecureadealwithanover
seassuppl
i
er.
Hesuggest
ed
tohisl
inemanagerthatsecuri
ngafi
xedpri
ceduri
ngthecontr
actperi
odof36mont
hswouldbe
benefi
cial
fortheor
ganizat
ionwoul
dthisbether
ightt
hingtodo?

A.Yesbecausef
ixi
ngapr
icewi
l
lal
way
sensur
ethebestdeal
possi
ble

B.Yesbecauseexchanger
ateoff
luct
uat
eandf
ixi
ngt
hepr
icewi
l
lhel
ppr
ovi
def
inanci
al
 cer
tai
nty

C.Nobecauset
hismaycauseadi
srupt
ioni
nsuppl
yasov
erseaexchanger
atesmay
change

D.Nobecausef
ixi
ngpr
ici
ngwi
thf
orei
gnsuppl
i
ersf
ormor
ethan24mont
hsi
sanunet
hical

32.Sunit
aandherteam areinanegot
iat
ionwiththesuppli
er.A memberoft
hesuppl
i
ers
negoti
ati
onteam st
atesthatmeet
ingyourneedsismeetingmyneedsbecauseweareinthi
s
toget
herwhattypeofnegoti
ati
onaret
hesupplierandbuyerundert
aki
ng?

A.adv
ersar
ial
negot
iat
ion

B.di
str
ibut
ivenegot
iat
ion

C.l
osel
osenegot
iat
ion

D.i
ntegr
ati
venegot
iat
ion

33.Li
steni
sakeyact i
vit
yinanynegot
iat
ion,
theact
ivi
tyofl
i
steni
ngi
nnegot
iat
ioni
ncl
udes
whichtwoprocesses?

I
. Hear
ing

I
I. I
nter
pret
ing

I
II
. Rappor
t

I
V. I
nfl
uenci
ng

A.1and2onl
y

B.2and3onl
y

C.1and3onl
y

D.2and4onl
y

34.AwiderangeofFact
ormaybetakeni
ntoaccountbysuppl
i
erwhensitti
ngornegoti
ati
ng
pri
ceswhichofthef
oll
owingar
eexter
nal
Factori
nprici
ngdeci
sions?Sel
ecttwothatappl
y.

A.compet
it
ioni
nthemar
ket

B.costofpr
oduct
ion

C.wher
ethepr
oducti
sint
hel
i
fecy
cle
 D.cust
omerper
cept
ionoff
ail
ure

E.costofsal
es

35.Asabuy eryouhavebeenletdownbyoneofy ournewsuppli

erandy ouhavelostsometrust
i
ntheabi l
i
tytoperfor
mt hecontractyouarekeent orepai
rther
elat
ionshipasyouknowt hat
marketi
snar rowandnotmanysuppl ycanful
fi
ll
yourneeds, Whatapproachwouldbe
appropr
iatetostar
ttorebui
l
dt herelati
onshi
p?

A.Ar
educt
ioni
nthepr
icef
ort
her
emai
nderoft
hecont
ract

B.Acknowl
edgementbyt
hesuppl
i
eroft
heneedt
oimpr
ove

C.Anof
ferofahospi
tal
i
typackagef
ory
our
sel
fandt
hepar
tner

D.Amendt
hekeyper
for
mancei
ndi
cat
orsot
hatt
hesuppl
i
ercanachi
evet
hem

36.ABat
nai
sal
way
srequi
redatt
hest
artofnegot
iat
ioni
sthi
sst
atementcor
rect

A.Yesabuy
eral
way
sneedsanal
ter
nat
ivepl
ant
oLev
erage

B.Yesbecausei
tismandat
oryaspar
toft
henegot
iat
ionst
rat
egy

C.Noi
tmaynotbeusedandt
her
efor
enotneeded

D.Nof
all
-backposi
ti
oncanbepr
oducedast
henegot
iat
ionpr
ogr
ess

37.Theinf
luenceofCult
urehassigni
ficanti
mpactoni nter
nat
ional
negot
iat
ionwhi
choneoft
he
fol
lowi
ngcommuni cat
ionskil
lcouldsupportasuccessfulout
come?

A.Under
standi
ngal
anguage

B.Under
standi
ngposi
ti
oni
nanor
gani
zat
ion

C.Under
standi
ngt
hesoci
alposi
ti
on

D.I
nvol
vi
ngposi
ti
on

38.Whichoft
hefoll
owi
ngwoul
dbeconsi
der
edappr
opr
iat
einf
luencet
echni
quewi
thi
ncont
ract
negot
iati
on?sel
ectTHREEt
hatappl
y

A.Rat
if
icat
ion

B.Anchor
ing

C.Fr
ami
ngandr
e-f
rami
ng
 D.Paci
ngandl
eadi
ng

E.Rul
eet
hics

F.Val
i
dat
ion

39.I
nwhi choft
hef
oll
owi
ngi
sthebuy
ersbar
gai
ningpowerr
elat
ivel
yhi
ghcompar
edt
othe
suppl
ier
?

I
. Fewsubst
it
utepr
oduct
sint
hemar
ket

I
I. Demandi
snotur
gent

I
II
. Thebuy
ercanpr
oducei
nhouse

I
V. Ther
ear
eli
mit
edsuppl
i
eri
nthemar
ket

A.1and4onl
y

B.1and2onl
y

C.2and3onl
y

D.2and4onl
y

40.Whichofthef
oll
owi
ngi
saPer
suasi
ont
echni
quet
hatmayi
ncl
udeast
atementofnegat
ive
consequence?

A.Logi
c

B.Compr
omi
se

C.Thr
eat

D.Bar
gai
ning

41.Rachelajuniorbuyeri
sabouttoleaveherfi
rstnegoti
ati
onwit
haninternati
onalsuppl
ier
.she
i
sconcernedt hatthesuppl
iermaynotrespectherauthor
ityast
heyhavepr ev
iousl
yonlydealt
wit
hhermanagershehasdeci dedtoholdanegot i
ati
onatherOffi
cewhichoft hef
oll
owingwill
bethebiggestbenefitf
orRachelofahomenegot iat
ion?

A.Fami
l
iar
it
ywi
tht
heenv
ironment

B.Thei
mmedi
atepr
esenceofmanager
ial
suppor
t

C.Lesst
rav
eli
ngt
imer
equi
red
 D.Thesenseofobl
i
gat
ionf
eltbyt
hesuppl
i
er

42.Whatar
ethepot
ent
ial
sour
ceofconf
li
ctbet
weent
hebuy
erandt
hesuppl
i
ersel
ectt
wot
hat
appl
y

A.Per
sist
entl
atepay
mentofsuppl
i
eri
nvoi
ces

B.Schedul
i
ngat
hlet
esadel
i
ver
ydat
es

C.Unequal
shar
ingofki
ngsr
iskandcostwi
tht
hesuppl
i
er

D.Request
ingear
lysuppl
i
eri
nvol
vement

E.Pl
anni
ngschedul
esi
tev
isi
ttot
hesuppl
i
erssi
de

43.Whi
choft
hef
oll
owi
ngar
eint
ernal
fact
orswhenasuppl
i
eri
smaki
ngapr
ici
ngdeci
sion?

I
. Pr
iceel
ast
ici
tyofdemand

I
I. Env
ironment
alFact
or

I
II
. Ri
skmanagement

I
V. St
agesi
nthepr
oductl
i
fecy
cle

A.1and2onl
y

B.1and4onl
y

C.2and3onl
y

D.3and4onl
y

44.Ef
fect
ivel
i
steni
ngi
simpor
tanti
nint
egr
ati
venegot
iat
ioni
sthest
atementcor
rect
?

A.Yesasi
tal
l
owsi
ssuest
obeshar
edandunder
stoodbet
weenpar
ti
es

B.Yesi tmeanst
hatt
hesuppl
i
erat
tempt
satnegot
iat
ioncanbest
oppedqui
ckl
ywi
tht
he
reasoni
ng

C.Noaswhatt
heot
herpar
tyhast
osayi
snoti
mpor
tant

D.Noi
nef
fect
ivel
i
steni
ngi
simpor
tantonl
yinadi
str
ibut
ivenegot
iat
ion

45.Dav
eapr
ocur
ementmanagerofXTCcompanyhasbeent
askedwi
thr
unni
ngahi
ghv
alue,
l
ongt er
m procur
ement .Daveaspartofhi
snegoti
ati
onstr
ategyisr
eviewi
nghowthecountr
y
economymayaf fecthi
snegot i
ati
onposit
ion.I
nwhichoft
hef ol
l
owingwouldDav
efindrel
i
able
macroeconomicinfor
mat i
on?

I
. Companyaccount
s

I
I. St
ockexchange

I
II
. Gov
ernmentf
orecast

I
V. Tr
adef
air
s

A.1and2onl
y

B.3and4onl
y

C.1and4onl
y

D.2and3onl
y

46.Mikeisajuni
orbuyerwhohasbeenworkingforamanufactur
ingor
ganizat
ionfortwoyear
s
speci
alisi
ngi
npurchasi
ngprocedur
esovert
hist i
mehehasbuiltgoodr
elati
onshi
pwi t
hinhi
s
team andwit
hotherdepart
mentswhichoft
hef oll
owi
ngsourceofpowerisMikeli
kelyto
possess?

A.Posi
ti
on

B.Per
sonal
i
ty

C.Rewar
d

D.Coer
civ
e

47.Whi
cht
askshoul
dbecar
ri
edouti
nacl
osur
est
ageofcommer
cial
negot
iat
ion?

A.Def
ini
ngl
i
mit
s

B.Bui
l
dingr
appor
t

C.Resear
chandunder
standi
ng

D.Obt
ainr
ati
fi
cat
ion

48.Apr ocur
ementmanageri
spreparingf
ornegot
iati
onwi t
hamaj orsuppli
er.
Heisholdi
ng
backsomei mport
antinf
ormat
iontoensurehehasthestrongernegoti
ati
onpower.I
sthis
approachappropr
iat
ewhenconsider
ingusingani
ntegrat
ivenegoti
ati
onStyle?

A.Nobecauset
hiswasnotdi
scov
eredt
hesuppl
i
err
esi
stancepoi
nt
 B.Nobecauset
hisi
snotbei
ngopenaboutt
her
equi
rement

C.Yesbecausei
twi
l
ldi
scov
ert
hesuppl
i
err
esi
stantpoi
nt

D.Yesbecausei
twi
l
lmaxi
mizet
heout
comef
ort
hepr
ocur
ementmanager

49.Fol
l
owi
ngcommer
cial
negot
iat
iont
heout
comecanbeassessedbywhi
choft
hef
oll
owi
ng?

A.Ref
lect
ingonper
for
mance

B.Ref
lect
ingonr
isk

C.Ref
lect
ingonspeci
alcondi
ti
on

D.Ref
lect
ingonl
ett
erofaccept
ance

50.Whi
choft
hef
oll
owi
ngcanbeconsi
der
edasont
hej
obt
rai
ning

I
. Taughtwor
kshop

I
I. Feedback

I
II
. Coachi
ng

I
V. Anchor
ing

A.1and2onl
y

B.2and3onl
y

C.1and3onl
y

D.3and4onl
y

51.Whi
choft
hef
oll
owi
ngsour
ceofper
sonal
poweri
ncommer
cial
negot
iat
ions?

I
. Expectpower

I
I. I
nfor
mat
ional
power

I
II
. Rewar
dpower

I
V. Char
ismat
icpower

A.1and2onl
y

B.2and3onl
y

C.1and3onl
y
 C.2and4onl
y

52.Stephisintoughnegotiati
onwit
hanint
ernalst
akeholderwhobelievet heproductshehas
developedisnotsuit
abl
ef oruse.St
ephhasdeci
dedt ochangeherinfluencingtacti
ctobring
thestakeholderonboar
d.Shehassuggestedthestakeholdersi
tsint
hepr oductdevel
opment
meet i
ngandv oicest
heiropini
onstohel
pdevel
opthepr oductwhichoft hefoll
owinginf
luence
techniquesi
sSt ephusi
ng?

A.Consul
tat
ion

B.Coal
i
tion

C.I
ngr
ati
ati
on

D.Pr
essur
e

53.Br
eak-
ev enanal
ysi
scanbeusedtodet er
minewhenabusi
nessmakesnei
theraprof
itnor
l
oss.Thebreak-
evenpointcanbecal
cul
atedbyusi
ngwhichofthef
oll
owi
ngformula?

A.Fi
xedcost
/(sel
l
ingpr
ice-v
ari
abl
ecost
)

B.Tot
alcost/
(pl
annedsal
esl
evel
-var
iabl
ecost
)

C.Var
iabl
ecost
/(t
otal
cost-sel
l
ingpr
ice)

D.Pl
annedsal
elev
el/
(var
iabl
ecost-f
ixedcost
)

54.Expecti
nfl
uencingoverpeopl ebymeansothert
hanusingauthor
it
yorpoweri
soften
requi
redincont
ractnegotiat
ion.Usingemot
ionsasatechniquei
spersuasi
oni
sethi
cal.Doy
ou
beli
evethi
sistr
ueoraf airstatement?

A.Yesbecausei
twi
l
lappeal
tot
hesuppl
i
ersGoodwi
l
l

B.Nobecauseemot
ionshoul
dnotbei
nvol
vedi
nbusi
nessagr
eement
s

C.Yesbecausef
ail
uret
ocompl
ywoul
dencour
ageanagr
eement

D.Nobecausei
tisnott
hebestr
out
etoenhancecr
edi
bil
i
ty

55.Effect
iveobj
ect
ivef
oranegot
iat
ionhav
ewhi
choft
hef
oll
owi
ngchar
act
eri
sti
cs?Sel
ectt
wo
thatapply
?

A.Measur
abl
e

B.Tact
ical

C.Speci
fi
c
 D.Account
abl
e

E.Rel
i
abl
e

56.Whi
choft
hef
oll
owi
ngar
ethechar
act
eri
sti
csofpushappr
oach?

I
. Exer
ti
ngpower

I
I. Ai
medatsecur
ingcompl
i
anceofof
tenagai
nstr
esi
stanceofi
nfl
uence

I
II
. I
nfl
uencesmaynotbeconsci
ousl
yawar
eoft
hepr
ocess

I
V. Per
suasi
onori
nter
per
sonal
inf
luence

A.and2onl
y

B.and4onl
y

C.and4onl
y

D. 1and3onl
y

57.Invol
vingcoll
eguesi
soneappropr
iat
eresour
cesr
equi
redt
osuppor tasuppl
i
ernegoti
ati
on,
whichotherresour
cesar
erequi
redtosuppor
tasuppl
i
ernegot
iat
ion?Selectt
wothatappl
y

A.Goodsr
ecei
vednot
e

B.Per
sonnel

C.Pur
chaseor
der

D.Ti
meor
deracknowl
edgement

58.Amanuf act
urermakest
opr
oductA&Bthet
otalcostt
omakepr
oductAis$80andi
tsell
s
for$105,
productBcosts$90andsel
lsf
or$120.
Whatwouldt
hemark-
upval
uebeforproduct
AandBr especti
vel
y?

A.25%and30%

B.34.
3%and32.
3%

C.23.
8%and25%

D.31.
3%and33%

59.Whi
chnegot
iat
ionappr
oachi
sfocusedonawi
n-l
oseout
come
 A.Col
l
abor
ati
ve

B.Adv
ersar
ial

C.Compr
omi
se

D.I
ntegr
ati
ve

60.Asuppl
l
ier
’sexpendi
tur
ewhi
chcanbeat
tri
but
edt
oaspeci
fi
cpr
oducti
sknownas'

A.Fi
xedcost

B.I
ndi
rectcost

C.Di
rectcost

D.Sunkcost
 CIPS AT A SHOT
SAMPLE QUESTIONS AND ANSWER
COMMERCIAL NEGOTIATION
LEVEL 4 DIPLOMA-OBJECTIVE RESPONSES FOR NEW SYLLABUS

PEKENE T.N.
(1) In Negotiation there are two sources of divergent position:1) Those that arise from the
content or subject matter of the negotiation ( what is being negotiated 2) those that arise from the
process of negotiation (how it is being negotiated).
Sources of divergent positions/conflict that can arise from the content of negotiation include all
except?
(a) payment terms
(b) Risk scheme
(c) contract terms and conditions
(d) Agenda and governance

(2) Sources of divergent position/ conflict that can arise from the process of negotiations include
all except?
(a) Payment terms
(b) Cultural differences
(c) Team size and make-up
(d) Agenda and Governance

(3) Conflict of divergence in negotiation is inevitable in commercial life, how could a

procurement professional minimizes conflict?
(a) Setting their limitation
(b) By coming up with the BATNA
(c) By setting ‘grand rules’
(d) By researching in supplier before time.

(4) ------ is the scientific modeling of interactions between different parties each pursuing its
own interests. It depict how parties interact and chose the actions in view of what they think, the
other parties might think and do?
(a) Zero- sum game
(b) Game theory
(c) Negotiation modeling
(d) Negotiation analysis
(5) Competing means pushing your point of view, adopting a defense stance immediately with
no intension of making concessions, and starting off with the attitude that you want to beat the
other side, what else can this be called?

(a) A zero- sum game

(b) Game theory
(c) Negotiation modeling
(d) Negotiation stance

(6) The greatest yet most invisible procurement savings come from ----
(a) Buying so much to make huge profit
(b) Buying little of the goods will make profit
(c) Not buying at all if the goods/ services are not needed
(d) Keeping profit in a safe place for share holders

(7) Procurement activities in public sector and opportunity for negotiation are likely to be more
limited by regulations and legislation, especially during the pre-contract award stage. There is
likely to be more opportunity for negotiation during the -------
(a) Specification stage
(b) Pre-contract award stage
(c) Contract award stage
(d) Contract management stage

(8) What is the first stage where detailed commercial negotiation may start?
(a) Understanding need and develop a high- level specification
(b) Develop strategy/Plan
(c) Bid/tender evaluation
(d) Conflict performance review
(9) Which step in the CIPS procurement and supply involves mainly inter- negotiation with the
stakeholders

(a) Staged 1: understanding need and develop high-level specification

(b) Stage 2: Market commodity and options research (including make or buy assessment)
(c) Stage 3: Develop strategies and plans
(d) Stage 4: Pre-Procurement, market test and engagement.

(10) Which step within the CIPS procurement and supply cycle informs the negotiation process?

(a) Staged 1: understanding need and develop high-level specification

(b) Stage 2: Market commodity and options research (including make or buy assessment)
(c) Stage 3: Develop strategies and plans
(d) Stage 4: Pre-Procurement, market test and engagement.

(11) Which step in the procurement cycle is where the decision regarding whether and what to
negotiate is made?
(a) Staged 1: understanding need and develop high-level specification
(b) Stage 2: Market commodity and options research (including make or buy assessment)
(c) Stage 3: Develop strategies and plans
(d) Stage 4: Pre-Procurement, market test and engagement.

(12) ------ is the process influencing a supplier or suppliers to behave in a certain circumstances.
(a) supplier conditioning
(b) Supplier influencing
(c) Suppliers controlling
(d) Buyers bargaining strategy

(13) Early supplier conditioning, e.g. focusing on the importance of a specific factor such as
quality, cost or environmental standard publicly, can also put in suppliers minds the needs to
focus on the areas in their bids/during negotiations, This is called supplier condition. Which step
in the procurement cycle is where supplier conditioning takes place.

(a) Staged 1: understanding need and develop high-level specification

(b) Stage 2: Market commodity and options research (including make or buy assessment)
(c) Stage 3: Develop strategies and plans
(d) Stage 4: Pre-Procurement, market test and engagement.

(14) Identify from the list below the stages (steps) in the procurement cycle that there is typically
limited commercial negotiation activities, especially in the public sector.
(1) Stage 5: Develop (tender) documentation.
(2) Stage 6: supplier’s selection (to participate in tender and participation)
(3) Stage 7: issue 111/RFQ
(4) Stage 8: Bid/tender evaluation
(5) Stage 9: Contract award
(6) stage 10:Delivery of goods and services (awarding, logistics and receipt)

(a) 1,2 4 and 5

(b) 1, 3, 4 and 5
(c) 1, 2, 3 and 6
(d) 3, 4, 5 and 6

(15) Te first stage where detailed commercial negotiation can start is where in the procurement
and supply circle?
(a) Stage 1: Understanding need and develop high-level specification
(b) Stage 8: Bids /tender evaluation
(c) Stage 9: Contract award
(d) Stage 10: Delivery of goods /services (warehouse, logistics and receipt)

(16) Which five in the list below commercial negotiation activity can take place in the private
sector?
(1) Stage 8: Bid/tender evaluation
(2) Stage 9: Contract award
(3) Stage 10: Delivery of goods and services ( warehouse, logistics, concept)
(4) Stage 11: Contract performance revival
(5) Stage 12: SRM and development
(7) Stage 13 End of contract- exit transition to new supplier (assessment management and
lessons learned)
(a) 1,2,,3,5 and 6
(b) 1,2,4,5 and 6
(c) 1,2,3,4,5 and 6
(d) 2,3,4,5 and 6

(17) In Thomas- Killman conflict management instrument which has objective to yield?
(a) Competing
(b) Accommodating
(c) Compromise
(d) Collaborating

(18) Which conflict management style in the Thomas- Killman conflict management instrument
is ‘expanding the pie” instead of fighting over?
(a) Competing
(b) Accommodating
(c) Compromise
(d) Collaborating

Note: there are dimensions in Thomas Killmans’s conflict model. The vertical axis,
assertiveness: is concerned with list responses based on our attempt to get what we want. Te
horizontal axis, ‘co-cooperativeness: is concerned with conflict responses base on helping others
get what they want. There is also a central area that overlaps both diversions compromise.
(19) There are potentially how many possible computations of styles that can be brought to any
conflict
(a) 5
(b) 10
(c) 15
(d) 25

(20) Stake holders influence in organization will vary enormously depending on organization
ownership, structures and governance arrangements. CIPS distinguishes between the sets of
stakeholders which includes all except,
(a) Internal stakeholders
(b) Connected Stakeholders
(c) Influenced Stakeholders
(d) External Stakeholders

21. Stakeholder map categorize stakeholders according to their level of influence/interest, which
among the following is not one of the four quardrant?
a) Interact
b) Engage and involve
c) Build awareness
d) Inform
22. In the stakeholder map for stakeholder engagement, a stakeholder with high influence and
high interest should be __
a) Engaged
b) Inform
c) Aware
d) Involved
23. In the stakeholder map, a stakeholder with a high influence/ low interest should be __
a) Engaged
b) Inform
c) Aware
d) Involved
24. In the stakeholder map, a stakeholder with a low influence and low interest should be __
a) Engaged
b) Inform
c) Aware
d) Involved
25. In the stakeholder map, a stakeholder with a low influence and high interest should be __
a) Engaged
b) Inform
c) Aware
d) Involved
26. In order to estimate the gab and progress towards the desired level of support from
stakeholders, what can the procurement team use to ascertain that.
a) Stakeholder map
b) Stakeholder engagement matrix
c) Stakeholder support scale
d) Mendelow’s theory
27. Many experience procurement and supply professionals will attest that the most difficult
negotiation they have hard ware with __
a) Colleagues in other internal functions such as finance and operation
b) External stakeholder
c) Connected stakeholder
d) Supplier
28. From the list below, pick the five that makes up the stakeholder support level scale
1. Resistant/ unaware
2. Neutral
3. Aggressive
4. Opportunistic
5. Positive aware
6. Collaborative
7. Positive advocate

a) 1,2,3,4 and 5
b) 2,3,4,5 and 6
c) 1,2,5,6 and 7
d) 3,4,5,6 and 7
29. In stakeholder support level scale, what is the most desired support level would aim to get
from a stakeholder?
a) Resistant/unaware and neutral
b) Positive aware
c) Collaboration
d) Positive advocate
30. working as part of a team provide the following advantages except
 a) Junior or new staff can learn a lot from observing/acting in a note-taking positive
b) You can stage manage your team and use certain tactical ploys
c) You are less likely to be intimidated
d) You will know when the negotiation is becoming favorable
31. Negotiation team roles include all except __
a) Team leader, chief negotiator
b) Commercial lead, technical lead
c) Observer and scribe
d) Researcher and investigator
32. The role of the scribe in a negotiation team is to __
a) Take record
b) Responsible for outcome
c) Speak, lead the negotiation team
d) Is to provide specialist knowledge
33. The term win-win is collaborative and also __
a) Competitive
b) Integrative
c) Distributive
d) Compromising
34. In integrating bargaining, what do buyer and seller do?
a) They avoid each other
b) They both stay out of the negotiation
c) They both push the value curve outward
d) They both move along the arc, claiming value
35. In distributive bargaining, what do buyer and seller do
a) They avoid each other
b) They both stay out of the negotiation
c) They both push the value curve outward
d) They both move along the arc, claiming value
36. Where is the ‘Pareto efficient frontier’ in the creating versus claiming value model?
a) Value curve
b) Is at buyer axis
c) Is at the seller axis
d) Claiming value
37. In the list below choose the four integrating view a buyer will take in negotiation
1. Get as much of the pie as you can
 2. Position-keep interest confidential as many exposes weakness
3. One at a time, thank and bank
4. Conformance based; bring yes/no, you’re with us or against us
5. Expand the pie so both parties can get more
6. Interest-move away from position ASAP to create movement
7. Discussion of several issues at a time get all the issues on the table
8. Performance-base, creative solution that satisfies most of both side interest
a) 1,2,5 and 8
b) 3,4,5 and 8
c) 1,2,3 and 4
d) 5,6,7 and 8
38. In the list below choose the four distributive views a buyer will take in negotiation
1. Get as much of the pie as you can
2. Position-keep interest confidential as many exposes weakness
3. One at a time, thank and bank
4. Conformance based; bring yes/no, you’re with us or against us
5. Expand the pie so both parties can get more
6. Interest-move away from positive ASAP to create movement
7. Discussion of several issues at a time get all the issues on the table
8. Performance-base, creative solution that satisfies most of both side interest
a. 1,2,5 and 8
b. 3,4,5 and 8
c. 1,2,3 and 4
d. 5,6,7 and 8
39. Principled negotiation is an approach that focused on two of the four below, choose the two
that applies
1. Integrative
2. Competing
3. Distributive
4. Collaborative
a. 1 and 2
b. 2 and 3
c. 1 and 4
d. 3 and 4
40. The four fundamentals of principled negotiation are
1. People: Separate people from problems
2. People: Integrate people with the problem
3. Interest: Focus on interest not position
4. Interest: Focus on position not interest
5. Options: Generate options from mutual benefits
6. Options: Generate options that benefit your party
7. Criteria: Use objective criteria
8. Criteria: Use subjective criteria
a) 1,3,5 and 7
b) 2,4,6 and 8
c) 1,2,3 and 4
d) 5,6,7 and 8

S/NO. ANSWER PAGE

1. D 16-17
2. A ‘’
3. C 18
4. B 19
5. A 20
6. C 7
7. D 6
8. C 9
9. A 7-12
10. B “
11. C ‘’
12. A ‘’
13. D ‘’
14. C ‘’
15. B ‘’
16. B ‘’
17. B 20
18. D ‘’
19. D 22
20. C 23
21. A 25
22. D ‘’
23. A ‘’
24. C ‘’
25. B ‘’
26. C 26
27. A ‘’
28. C ‘’
29. D ‘’
30. D ‘’
31. D ‘’
32. A ‘’
33. B 29
34. C 30
35. D ‘’
36. A ‘’
37. D 33
38. C ‘’
 39. C 36
40. A ‘’

41. The price plateau diagram is based on __

a) Cost versus profit
b) Price versus value for money
c) Price versus profit
d) Cost versus price
42. The price plateau diagram illustrates the principle of separating the people from the issue
very well and it has four possible character combination of a negotiator.
1. Cold Tough
2. Cold Easy
3. Warm Tough
4. Warm Easy
‘Warm’ and ‘Cold’ refer to __
a) How you personally engage with TOP
b) Your focus on the problem or issue
c) People
d) Criteria
43. ‘Tough’ and ‘Easy’ in the price plateau diagram refers to __
a) How you personally engage with TOP
b) Your focus on the problem or issue
c) People
d) Criteria
44. ‘Tough’ in the price plateau diagram means
a) Focus, rigorous, analytical, logical and not distracted from achieving your interest
b) Opposite of tough
c) Showing courtesy, respect, listening and empathy
d) Opposite of warm
45. ‘Easy’ in the price plateau means __
a) Focus, rigorous, analytical, logical and not distracted form achieving your interest
b) Opposite of tough
c) Showing courtesy, respect, listening and empathy
d) Opposite of warm
46. ‘Warm’ in the price plateau means __
a) Focus, rigorous, analytical, logical and not distracted form achieving your interest
 b) Opposite of tough
c) Showing courtesy, respect, listening and empathy
d) Opposite of warm
47. ‘Cold’ in the price plateau means __
a) Focus, rigorous, analytical, logical and not distracted from achieving your interest
b) Opposite of tough
c) Showing courtesy, respect, listening and empathy
d) Opposite of warm
48. What is the best approach in the price plateau diagram?
a) Warm Tough (‘I want to help you’)
b) Cold Tough (‘Yes, but I will have to charge you for it’)
c) Warm Easy (‘Why bother’)
d) Cold Easy (‘Yes, but I will get my own back’)

NOTE: the principled approach suggest that separating the people from the issue and being
warm with the people but tough on the issue is the best way to achieve this objective: ‘I want to
help you (help me)’.

49. Negotiation is a form of communication, and Fisher and Ury point out three common
problems that can occur. Which among the following is not one?
a. Choosing the wrong supplier
b. Trying to impress one’s own team instead of clearly stating one’s position to the other
party and working towards an agreement
c. Not actively listening in order to understand in other party and find common ground, but
listening for contentious points to contradict
d. Misunderstanding what the other party says, and/or rephrasing or summarizing
inaccurately
50. What motivate a negotiator?
a. Position
b. Interest
c. Profit
d. Organization
51. __ are a negotiation variable such as price or contract length that can be traded with TOP in a
negotiation.
a. Exchanges
b. Compromises
c. Tradables
d. Deals
52. Clever negotiators are always looking for something that is __
a. Easy or cheap to trade, but is very valuable to TOP
b. Valuable to trade, but is very easy or cheat TOP
c. Valuable to trade for something not important
d. Not valuable to trade for something that is not important.
53. What is called the fallback or backstop position if the negotiation fails to result in an
agreement/ no deal is agreed?
a) ZOPA
b) BATNA
c) Buyer/Seller preference
d) Walk-away point
54. Before falling back to your best alternative to negotiated agreement, you must have gotten to
your__
a) ZOPA
b) BATNA
c) Buyer/Seller preference
d) Walk-away point
e)
Note: ZOPA: Zone of Potential Agreement
BATNA: Best Alternative to Negotiated Agreement

55. For each objective and variable/tradable you will bring to the negotiation, you need to
establish the following except
a) Must achieve
b) Intend to achieve
c) Like to achieve
d) Far/within achievable limit
56. The concept of the best alternative to a negotiation agreement (BATNA) describe the option
for a negotiator if agreement cannot be reach. It proposes that a negotiator who must reach a deal
is in a __
a) A stronger position than a negotiator who has an alternative option
b) Weaker position than a negotiator who has an alternative option
c) equal position with a negotiator who has an alternative option
d) direct position with a negotiator who has an alternative option
57. Having an alternative as a back up in case a negotiator fails to achieve your minimum
objective therefore for provides you with a ,,,,,.
 a) source of power itself
b) ZOPA
c) BATNA
d) Walk-away point

Note: if the other party knows you cannot walk away because you have no alternative, then you
will be in a weaker position.

58. Good negotiators realized that it is not the actual existence of a strong BATNA that gives you
leverage in a negotiation but TOPs perception or believe that you have a strong BATNA
a) Yes, the belief that you have one does that
b) No, the belief that you have one cannot do that
c) Yes, good negotiators consider BATNA as a strategy
d) No, good negotiators does not believe that.
59. BATNA is the standard you must judge the outcome of any negotiation against. Establishing
your BATNA involves three steps. Which among the flowing is not one?
a) List everything you could do if you do not reach agreement
b) Explore the best of your options and try to improve on them. The better you BATNA, the
stronger you will be in your negotiation
c) Establish your walk-a-way point and walk away
d) Finally, choose your best option. This is your BATNA

Note: when you are negotiating on behalf of your employer you bring the power of your
organization (its brand, reputation, and purchasing spend) as well you personal power (that
which; embedded within you) to the negotiation.

60. What power comes from the belief that a person has the formal right to make demands, and
to expect others to be compliant and obedient? This sometimes comes from rules, formal
authority, organizational rank, staff grade, or official position held.
a) Reward
b) Expert
c) Legitimate
d) Referent
61. What power comes from a person’s high skills and knowledge, formal training, qualifications
and experience in a particular procurement category.
a) Reward
b) Expert
 c) Legitimate
d) Referent
62. What power comes from a person’s ability to pay money or offer something kind of
attractive inducement? (Not always legal or ethical) to get them to change their behavior.
a) Reward
b) Expert
c) Legitimate
d) Referent
63. What power comes from a person’s perceive attractiveness, worthiness, honesty, fairness,
respect. Sometimes referred to as charisma in leaders, others referred to this person’s behavior
when judging them?
a) Reward
b) Expert
c) Legitimate
d) Referent
64. What power comes from the belief that a person can punish others for non-compliance?
a) Reward power
b) Expert power
c) Reference power
d) Coercive power
Answer question 65-69 from the case study below
Case Study:
Consider why most people stop at a red traffic sign when in a car. Everyone knows it is
the law, but if you analyze it further, there may be other sources of power at work here
influencing your behavior. The more forces, the stronger the effect.
65.‘It is the law’ is an examples of what type of power that influence this situation?
a) Reward power
b) Legitimate power
c) Informational Power
d) Coercive power

66. ‘If you do not stop you may fined/prosecuted police’ is an examples of what type of power
that influence this situation?
a) Reward power
b) Legitimate power
c) Informational
d) Coercive power
67.‘You know it is dangerous; you may put yourself or others in danger’ is an examples of what
type of power that influence this situation?
a) Reward power
b) Legitimate power
c) Informational Power
d) Coercive power

68.‘You feel better about yourself as you see yourself as a good citizen’ is an examples of what
type of power that influence this situation?
a) Reward power
b) Legitimate power
c) Informational Power
d) Coercive power
69.‘You are afraid of embarrassment if seen breaking the law by a friend or/Neighbours’ is an
examples of what type of power that influence this situation?
a) Reward power
b) Legitimate power
c) Informational Power
d) Referent power

(70) From the ‘buyers perspective’ lower-value items that are crucial to the well being of the
business.
(a) Security of supply is more important than price, a hard negotiation would not be appropriate.
(b) You can put the supplier at some distance
(c) Suppliers must be treated with care
(d) Spot buying and a negotiation are obvious tactics.

(71) From the ‘buyers perspective’ low value, low risk and exposure. Unimportant items which
are not essential to those business:
(a) Security of supply in more important than price, a hard negotiation would not be appropriate.
(b) You can put the supplier at some distance
(c) Suppliers must be treated with care
(d) Spot buying and a negotiation are obvious tactics.
(72) From ‘buyers prospective’ key items which are both high cost and essential to the business.
They are of the highest importance.
(a) Security of supply in more important than price, a hard negotiation would not be appropriate.
(b) You can put the supplier at some distance
(c) Suppliers must be treated with care
(d) Spot buying and a negotiation are obvious tactics.

(73) From the ‘buyers prospective’ items not of crucial importance to the business but a high
spend means that the buyer can play the market.
(a) Security of supply in more important than price, a hard negotiation would not be appropriate.
(b) You can put the supplier at some distance
(c) Suppliers must be treated with care
(d) Spot buying and a negotiation are obvious tactics.

(74) From the ‘seller’s perspective’ Customers who do not spend much but have enough
attraction to them worth pursuing.
(a) You would hope that your care and attention would prove reward.
(b) Why are you doing business with them?
(c) You would not wish one of this to escape
(d) You can negotiate hard and try to earn some money?

(75) From the ‘seller’s perspective’ customers who spend little and are not attractive.
(a) You would hope that your care and attention would prove reward.
(b) Why are you doing business with them?
(c) You would not wish one of this to escape
(d) You can negotiate hard and try to earn some money?

(76) From the seller’s perspective: customers of the highest quality w ho should be protected
under any circumstances.
(a) You would hope that your care and attention would prove reward.
(b) Why are you doing business with them?
(c) You would not wish one of this to escape
(d) You can negotiate hard and try to earn some money?

(77) From the seller’s perspective customers who are not particularly attractive but who spend so
much that a great deal of profit and turn over can be created
(a) You would hope that your care and attention would prove reward.
(b) Why are you doing business with them?
(c) You would not wish one of this to escape
(d) You can negotiate hard and try to earn some money?

(78) ------------- Is another source of information which means gathering data illegally through
hacking into confidential company data bases and files, or by bribing employees to provide
useful information, This is unethical and illegal but sadly it does happens.
(a) Industrial espionage
(b) Industrial hard doing
(c) Cyber crime
(d) Intellection property right violation

(79) Purchasers can improve leverage with suppliers through the following except
(a) Through spend and concentration
(b) Through spend analysis- spends analysis overview
(c) Through a standard specification
(d) Increase purchases leverage through other means.

(80) Increasing leverage through spend concentration, suppliers spend consolidation can take
many forms as outlined below. Choose the six the supplies
(1) Vender base reduction
(2) Volume pooling
(3) Volume redistribution
(4) Volume consolidation across categories
(5) Standardization and harmonization of specification
(6) Forming purchasing consortia
(7) Early supplier involvement
(8) Pull and push option
(a) 1, 2,3,4,7, and 8
(b) 1, 2,3,4,5, and 6
(c) 1, 2,3,4,5, and 6
(d) 1, 2,3,4,5, and 8

S/NO. ANSWER PAGE

41. B 37
42. A ‘’
43. B ‘’
44. A ‘’
45. B ‘’
46. C ‘’
47. D ‘’
48. A ‘’
49. A 38
50. B 40-41
51. C ‘’
52. A ‘’
53. B ‘’
54. D ‘’
55. D 44-45
56. B ‘’
57. A ‘’
58. A ‘’
59. C 46
60. C 48
61. B ‘’
62. A ‘’
63. D ‘’
64. D ‘’
65. B 50
66. D ‘’
67. C ‘’
68. A ‘’
69. D ‘’
70. A 56
71. B ‘’
 72. C ‘’
73. D ‘’
74. A 57
75. B ‘’
76. C ‘’
77. D ‘’
78. A 59
79. C ‘’
80. C ‘’

(81) Increasing leverage through analytics-spend analysis overview.

------------ Is a review and spend data presented as a three-dimensional cube usually reviewed.
(a) High spend
(b) Tail spend
(c) Spend cube
(d) 80%/20%

(82) In trying to increase leverage through analytics spend review, which of the following
questions is not part of three dimensional cube (spend cube)

(a) How much are you spending in which categories? ( sub categories and commodity groups
purchased across the negotiation.
(b) Who in your organization is spending the money –cost centre/ (stake holder or department
buying the category.)
(c) Who are you spending this money wit, with vendor and contractor? (Comparative spends
with different suppliers.
(d) Who are you going to buy from (vendor and supply?)

(83) Apart from the size of buyer’s spend. Other areas a buyer can project itself to be attractive
to suppliers (increasing purchase leverage) include seven of the following, chose the applicable
seven.

(1) Simple procurement process

(2) Simple contracting project
(3) Procurement and supply cycle
(4) Supply chain
(5) Clear and concise documentation
(6) Absence of onerous supplier terms and conditions.
(7) On-time payment
(8) Transparent process
(9) Ethical behavior

(a) 1, 2,3,4,5,6,and7
(b) 1,2,3,5,6,7 and 8
(c) 1,2,4,6,7,8,and 9
(d) 1,2,4,6,7,8 and 9

(83) How suppliers are segmented include the following except?

(a) Strategic
(b) Tactical
(c) Transaction
(d) Collaboration

(85) Which of the two makes up operational suppliers?

(a) Strategic and collaboration
(b) Tactical and transaction
(c) Strategic and transactional
(d) Tactical and collaborative

(86) From a procurement reputation strength in a supplier might be based on seven of the
following choose those that are applies.
(1) Quality of product or service
(2) Low cost/ high value for money
(3)High ethical standard
(4) Reliability
(5) Rivalry in the market
(6) Startup capital
(7) Cutting-edge technology
(8) Strong Customer focus
(9) Engineering excellence

(a) 1,2,3,4,5,6, and 7

(b) 1,2,3,4,7,8, and 9
(c) 3.4,5,6,7,8,and 9
(d) 1,4,5,6,7,8, and 9

(87) Dr Mari Sako identified taxonomy of the types of trust in commercial relationship, which is
very useful from the prospective of procurement. Which of the following is not one of the three?
(a) Reputational trust
(b) Contraction trust
(c) Competence trust
(d) Good will trust

(88) Which among the following is the greatest trust?

(a) Reputational trust
(b) Contractual trust
(c) Competence trust
(d) Good will trust

(89) Which of the following is the strongest type of trust?

(a) Reputational trust
(b) Contractual trust
(c) Competence trust
(d) Good will trust

(90) Which among the following trust takes the longest time to build?
(a) Reputational trust
(b) Contractual trust
(c) Competence trust
(d) Good will trust

(91) Trust/ partnership- building behavior include all except?

(a) Joint issue resolution
(b) Quick sharing of information
(c) Closed discussion and root cause of failure
(d) Strong sense for ownership for high quality service.

(92) Signs of trust of business relationship include all the following except?
(a) Clear criteria for decision making?
(b) High-performance team members that feel empowered to get the job done.
(c) Real time sharing of information on needs and priorities
(d) Constant shadowing and oversight focus and control.

(93) Which is an example of the vicious circle of blame?

(a) I can’t start acting like a partner until you treat me like one.
(b) Clear criteria for decision making
(c) Joint use resolution
(d) Strong sense for ownership for high-quality service.

(94) The main factor that distinguishes commercial negotiation from all other negotiation,
(a) Is the team involved?
(b) Is the fact that it’s being lead by personalities?
(c) Is the centrality of the price element?
(d) It is transparent

(95) Cost saving include two measures

(a) Traditional and non- traditional
(b) Traditional and unexploited
(c) Organizational and traditional
(d) Organizational and unexploited

(96) Traditional areas focuses in cost serving measures include all except?
(a) Downsizing
(b) Automation and process
(c) Reengineering
(d) Cost analysis

(97) Unexploited areas in cost savage measures include all except?

(a) Procurement
(b) Cost analysis
(c) Downsizing
(d) Suppliers involvement

(98) Which three among the following is a direct cost?

(1) Materials and services bought-in: Raw materials, parts and assemblies
(2) Labor or wages: Money paid to staff for the work involve in producing the product
(3) Expenses: Other changes incurred that can be attributed to particular product, batches or
services.
(4) Materials and services not used in production: office and factory consumables (Parts for
machinery, stationery, some spare)
(5) Labor: All staff costs not directly attributed to production; such as management, sales and
marketing
(6) Expenses: Rent, rate, insurance for plant and machinery allowance for bad debts
(a) 1, 2, and4
(b) 1, 2, and 3
(c) 3, 4, and 5
(d) 4,5, and 6

(99) Which three among following is an indirect cost?

1) Materials and services bought-in: Raw materials, parts and assemblies
(2) Labor or wages: Money paid to staff for the work involve in producing the product
(3) Expenses: Other changes incurred that can be attributed to particular product, batches or
services.
(4) Materials and services not used in production: office and factory consumables (Parts for
machinery, stationery, some spare)
(5) Labor: All staff costs not directly attributed to production; such as management, sales and
marketing
(6) Expenses: Rent, rate, insurance for plant and machinery allowance for bad debts
(a) 1, 2, and4
(b) 1, 2, and 3
(c) 3, 4, and 5
(d) 4,5, and 6

Note: Indirect cost as real as direct cost and need to be paid, so they must be appointed in some
way to the individuals goods and services which are produced, so that these cost can be
recovered in the price changed, common ways are by reference to the number of items produced,
the member of direct labor hours required to produce those items, or the amount of direct
materials used. This can be called ‘absorption.

(100) Semi-variable costs are costs that have a fixed cost and variable cost elements. Which of
the following is not an example of semi-variable cost?
(a) Gas
(b) Stationeries
(c) Electricity
(d) Water

(101) ---- Is a spend that is influencable through negotiations or application of other savings
effort or leverage with suppliers
(a) Addressability of spend
(b) Tail-spend
(c) High speed
(d) Semi-variable cost

(102) which spend should have the highest addressability if any is possible?
(a) Starting minimum wage
(b) Regulations speed
(c)Commodity materials inputs
(d) Suppliers mark up and employees benefit

(103) Understanding where and with whom your supplier spends the money or understanding the
‘cost break down or price build up’ of the goods and services you purchase from a supplier-----
(a) Will help you build up a value adding procurement strategy
(b) Will help you know where when and they can offer concessions
(c) Will help you understand the rivalry in the suppliers market
(d) Will help you identify substitute you can leverage the market
(104) Ray Carter coined the useful mnemonic ‘STOPS WASTE’ to reined buyers of ten cost
reduction ideas they can ask themselves and suppliers in any situation when considering a true
purchased input. Which ten among the following makes up STOP WASTE
(1) Standardization
(2) Transportation
(3) Over-engineering
(4) Packaging
(5) Substitute
(6) Weight
(7)Any unnecessary processing
(8) Suppliers input
(9) To make
(10)Eliminate
(11) Direct cost
(12) Indirect cost
(a) 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10
(b) 3, 4, 5, 6, 7, 8, 9, 10, and 11
(c) 2, 3, 4, 6, 7, 8, 9, 10, and12
(d) 1, 3, 4, 5, 6, 7, 8, 9, 10, and 12

(105) when a factory first opens there will be significant overheads or fixed cost to recoup, so
suppliers may seek to load as much of the overhead as possible onto the early buyers if they can.
As the factory wins more orders, the average cost drops until they reach a low plateau. What is
this low plateau called?
(a) Tail spend
(b) Sweet spot
(C) Low cost
(e) Minimum cost

(106) Buyers negotiating at where long-range average cost (LRAC) is at lowest –sweet spot will
be in a -----
(a)Less strong position to negotiate more favorable price than the early or late buyer
(b) Disadvantage position to negotiate more favorably price than the early or late buyer
(c) Stronger position to negotiate more favorably price than early or late buyer
(d) Will not be able to negotiate more favorably price as early or late buyer

(107) what is the formula for breakeven point

(a) Breakeven point= Fixed cost/(price-valuable cost)
(b) Breakeven point= Fixed cost (price+ valuable cost)
(c) Breakeven point = (Price –variable cost)/ fixed cost
(d) Breakeven point = (Price + variable cost)/ fixed cost

(108) what is the formula of contribution?

(a) Contribution = price + variable cost
(b) Contribution = price - variable cost
(c) Contribution = price/variable cost
(d) Contribution = price X variable cost.

(109) -------is an approach to allocating overheads in which indirect cost are loaded in to direct
costs related to specific jobs, process or outputs using an estimated bases of allocation
(a) Variable costing
(b) Activity based costing
(c) Marginal costing
(d) Absorption costing

(110) ------- Is the cost of producing an additional unit of output for example, supposing a
supplier produces a 100 unit of cost of $1000, and a cost of making 101 units is $1005
(a) Variable costing
(b) Activity based costing
(c) Marginal costing
(d) Absorption costing
(111) Absorption cost making may increase the goods, whereas, marginal, costing may reduce
the price. Is the above statement true?
(a) Yes, it is a true statement
(b) No, it is completely not true
(c) It is true with absorption costing but not with marginal costing
(d) It is true with marginal costing, but not with absorption cost

(112) A professional procurement officer, when negotiating with suppliers may seek to persuade
the supplier to set price that covers the marginal costs only, rather than adopt absorption costing (
true or false)

(113) Costing methods involve the following

Except?
(a) Absorbtion cost
(b) Marginal or variable costing
(c) Activity- based costing
(d) Fixed costing

(114) ------ is the practice of varying the price for a product or service to reflect conditions in
particular the charging of a higher price of a greater demand.
(a) Dynamic pricing
(b) Marginal costing
(c) Variable costing
(d) Absorption costing

(115) which of the following is not part of the traditional costing?

(a) Associate the cost of product with the actual effort spent?
(b) Looks at what is spent/cost are allocated based on volume
(c) Limited understanding of true costs incurred, provides review accounting-related information.
(d) Not a true reflection of actual cost of product or services.

(116) which of the following is not part of activity-based-costing?

(a) Looks at what is done in terms of activities
(b) Assignment costs to activity based on the resources they consumes
(c) Provides the information required to take action and realize improvements
(d) Looks at what is spent/cost an allocated on volume.
(117) Even in the case of items that are used up directly or indirectly in production, there are
factors that need to be considered when considering the total cost of supply. Choose the five that
are applicable
(1) Payment terms
(2) Delivery speed and lead time
(3) Service level and response time
(4) Key performance indicates KPI
(5) Service level agreement SLA
(6) Willingness and ability
(7) Provision of value-added service e.g. unpacking delivery to line, set-up etc

(a) 1, 2, 3, 4. And 5
(b) 2, 3, 4, 5, and 6
(c) 1, 2, 3, 6, and 7
(d) 3, 4, 5, 6, and 7

(118) what is the formula of mark-up (%)?

(a) = price - cost X 100%

Cost
(b) = price + cost X 100%
Cost
(c) = price – cost X 100%
Price
(d) = price + cost X 100%
Price

(119) How is margin calculated?

(a) = price - cost X 100%
Cost
(b) = price + cost X 100%
Cost
(c) = price – cost X 100%
Price
(d) = price + cost X 100%
Price
 S/NO. ANSWER PAGE
81. C 61
82. D ‘’
83. B 62
84. D 65
85. B ‘’
86. B 66
87. A 69
88. B ‘’
89. D ‘’
90. D ‘’
91. C 70
92. D ‘’
93. A ‘’
94. C ‘’
95. B 76
96. D ‘’
97. C ‘’
98. C 77-78
99. D ‘’
100. B 79-80
101. A ‘’
102. D ‘’
103. B 81
104. A 82
105. B ‘’
106. C ‘’
107. A 85
108. B ‘’
109. D 86
110. C ‘’
111. A ‘’
112. TRUE ‘’
113. D ‘’
114. A ‘’
115. A ‘’
116. D ‘’
117. C 88
118. A ‘’
119. C ‘’

(120) pricing strategies used by suppliers for items and/or services within category management
groups include five of the following choose those that applies:
(1) Cost-plus pricing
(2) Premium pricing
(3) Premium pricing
(4) Penetration pricing
(5) Total life costing
(6) Total cost of acquisition
(7) Market pricing

(a) 1, 2, 3, 4, and 5
(b) 2, 3, 4, 5, and 6
(c) 3, 4, 5, 6, and 7
(d) 1, 2, 3, 4, and 7

(121) ------ Is when supplier is determined to charge a very high price, not connected with cost
structures, usually based on the reputation that the product/service is of superior quality. This is
typically found in the early part of the product life cycle when demand exceeds supply.
(a) Procure to pay (P2P)
(b) Premium pricing
(c) Cost-plus pricing
(d) Marginal cost pricing

(122) ------ is the system that connects the stages of the procurement process from the raw
materials through that payment
(a) Procure to pay (P2P)
(b) Premium pricing
(c) Cost-plus pricing
(d) Marginal cost pricing

(123)------ involves identifying the suppliers for a specific product, an essential prices for the
same/similar products in this wider market place to deter mine where the supplier pricing fits
within this, and an essential cost breakdown of the suppliers product(or services) This allows this
suppliers profit and any provided cost to be identified.
(a) Purchase price cost analysis PPCA
(b) Cost break down
(c) Cost structure
(d) Material cost
(124) which among the following is not among the cost questions to ask when carrying out
purchase price analysis PPCA

(a) What drivers are acting on the suppliers cost

(b) What is the right price?
(c) Is the current price too much?
(d) What is the competition in the market?

(125) when not to use PPCA?

(a) On big spend items, relating to total purchasing spend
(b) On categories that ‘strategic’ or planned to move into strategic from leverage
(c) On bottleneck items planned to move into strategic
(d) On items that have a major impact in your cost.

(126) when does suppliers tend to be most receptive, that is most appropriate to obtain cost
breakdown?
(a) During the contract execution
(b) When they have finished the project that they can entertain question
(c) When they want you to increase the price
(d) On items that have a major input on your cost

(127) After carrying out your PPCA, ‘proving’ a supplier can supply more cheaply is not
necessary a good negotiation tactic.
(a) Especially if you have limited leverage
(b) Especially if you have strong leverage
(c) Being able to prove that will swing in negotiation to your favor.
(d) Yes, it is in all case

(128) ------- States that if one keeps on adding a variable factor of production ( such as labor) to
fixed factors ( such as land), you will get proportional less output from each additional units of
labor added until, eventually overall output will start to decrease each addition unit of factor
added
(a) The law of supply
(b) The law of demand
(c) The law of diminishing return
(d) The law of elasticity

(129) the only way producers can expand without facing diminishing returns and increased cost
will be -----
(a) to observe the law of supply and demand
(b) to make their decisions early.
(c) they invest in factors of production that is not fixed
(d) to invest in factors of production that is fixed
(130) which of the following is not one of three main criteria that distinguish the different market
structure?
(a) Number and size in the product life cycle
(b) The stage in the product life cycle
(c) Characteristics of the goods and services been traded
(d) To degree in which information can flow freely

(131) From a simplistic procurement perspective, a market with perfect competition is the -----
(a) Most unattractive to buy from
(b) Most attractive to buy from
(c) Is moderately attractive to buy from
(d) Worst to buy from

(132) Negotiation on price will be less important with which market structure?
(a) Monopoly
(b) Perfect competition
(c) Oligopoly
(d) Monopolistic

(133) To allow for market prices changes so both side share risk, when processing such contracts
(where there is a major commodity input) it is often intelligent to agree a ---------
(a) Contract with economy of scale
(b) Contract with fixed price mechanism
(c) Contract supply adjustment mechanism
(d) Contract price adjustment mechanism

(134) For most commercial negotiation with a monopoly type organization, ways of dealing with
monopoly suppliers includes the following except?
(a) Making yourself an attractive buyer
(b) Seeking out alternative/substitutes in a private or public manner
(c) Lobbying or campaigning for an increase in barrier to entry
(d) Designing out the requirement that forces you to the monopoly supplier or seek to make the
product or threaten to make it yourself

(135) Of all the market types, which is the one where procurement professionals can probably
add most value through market insight, careful negotiations, planning and executions.
(a) Perfect competition
(b) Monopolistic competition
(c) Monopoly
(d) Oligopoly
(136) In which market procurement professionals with category expertise will know the
difference between great quality and perceived quality created in customers minds on the back of
clever advertising of branding, distinguishing through market research what the real difference to
their business and focus negotiation on them?
(a) Perfect competition
(b) Monopolistic competition
(c) Monopoly
(d) Oligopoly

(137) Key macro economic factors to consider by the procurement professional in negotiation
include all except?
(a) Suppliers investment early involvement
(b) Changes and rate of changes
(c) General versus particular effects
(d) Expectations and consumers sentiment

(138) Buyers should be aware of relative growth rates in the economic they are from as it might
give an indication as--------
(a) Future strategy of the supplier
(b) Future of the buyer
(c) Historical information of the past business
(d) Expansion rate.

S/NO. ANSWER PAGE

120. D 90-91
121. B 90-91
122. A 92
123. A 95
124. D ‘’
125. C ‘’
126. D 96
127. A 98
128. C 100
129. C ‘’
130. B 106
131. B 107
132. B ‘’
133. D ‘’
134. C ‘’
135. D 109
136. B ‘’
137. A ‘’
138. A ‘’

139. Clever negotiators are always looking for something that is __

a)Easy or cheap to trade, but is very valuable to TOP
b)Valuable to trade, but is very easy or cheat TOP
c)Valuable to trade for something not important
d)Not valuable to trade for something that is not important.

140. From the seller’s perspective: customers of the highest quality w ho should be
protected under any circumstances.
(a) You would hope that your care and attention would prove reward.
(b) Why are you doing business with them?
(c) You would not wish one of this to escape
(d) You can negotiate hard and try to earn some money?

141. From the perspective of negotiation, stakeholders are persons or groups that have
interest in …………
a) the objectives of the organization b) the outcome of the negotiation you are leading
c) the process and procedure of the negotiation you lead d) the organization

142. In the cost benefit analysis of negotiation, more investment in the preparation of
negotiation is carried out for ………….
a) low risk, high cost procurement b) high risk, low risk procurement c) high risk,
high cost procurementd) low risk, low cost procurement

143. Commercial negotiation may be appropriate in one of the following situations

a) if two parties have unequal bargaining power b) no co-operation between two or
more parties c) if two parties have same bargaining power d) if one party has no
stake in the outcome of the negotiation

144. Negotiation becomes very important at which point of procurementa) contract

documentation stage b) preparation stage and before supplier is selected c) sourcing
 process and before buyer awards contract to the supplier d) termination stage/exit
stage

145. The greatest opportunity for cost reduction is at the …….. Stage

a) sourcing b) purchasing c) preparation d) design

146. Demand management means?

a) handling product/services procured for an organization b) constructively challenging
the requirement/ specification of the internal stakeholder needs c) forecasting the
need for future requirement d) challenging the demand of the customer's need

147. At the first stage of procurement cycle, negotiation takes place between the
following stakeholders except?
a) procurement/technical staffb) budget holder c) Supply d) end users

148. At the second stage of the procurement cycle, bargaining power between the
buyer and supplier is evaluated, this evaluation determines the ….. a) negotiation
outcome b) negotiation preparation c) negotiation steps d) negotiation process

149. What stage of procurement is the decision regarding whether and what to
negotiate is made a) develop documentation b) market/commodity & research
c) develop strategy/plan d) bid/tender evaluation

150. In practice, it would be naïve to expect that without proactive contract

management, the supplier will adhere to all Ts& Cs, thus ……… may be expected during
the contract life

a) periodic checking and some negotiation b) regular checking c) stakeholder

management and some negotiation d) negotiation skills

151. In many negotiation, divergence may arise over …..and ……..

 a) content/process b) contract/delivery c) competitors/suppliers d)
opportunity/flucats

152. Senior manager may take responsibility of evaluating their own performance and
claimed that they have performed well. To ensure fair & transparent & accountable
performance from senior managers, a robust challenge through …. Will be carried out.
a) conflict & challenge b) resolution via negotiation c) cooperate governance d)
internal and external auditors

153. circumstances whereby there are plenty suppliers with low switching cost and no
long term relationship with supplier, an approach to conflict management could be
a) avoiding b) accommodation c) completing d) compromising

154. situation where the buyer is relatively weak, product supplied by the specific
supplier is important to the buyer and price is within the budget, an approach of …..
Conflict management can be used

a) avoiding b) competing c) accommodating d) collaboration

155. what conflict management style proffers to find a win-win solution for both buyer
and supplier a) competing b) collaborating c) compromising d) avoiding

156. commercial negotiation should be driven by ……..

a) procurement b) supplier c) buyer d) business need

157. stakeholder influence in organization vary enormously depending on the

following except? a) organizational ownership b) organizational stakeholder c)
organizational structure d) governance arrangement

158. when negotiating for commodity-type products and services where there are
multiple competing suppliers, what approach of negotiation will the buyer adopt?
 a) distributive approach b) integrative approach c) win-win approach d)
collaborative approach

159. if the absolute highest price a buyer can pay is $1000 per unit and the lowest price
the supplier can offer is $1200, if other variables are constant and both parties stick to
their bottom lines. Then both parties establishing each other's?
a) zone of potential agreement b) best alternative to negotiated agreement c)
walk-away point d) agreement

160. the ZOPA model can be applied to any of these variable except

a) delivery frequency b) sustainability c) price d) contract length

161. what gives good negotiators leverage in a negotiation is usually

a) relative strength of the BATNA of the other partyb) existence of strong BATNA
c) perception that you have strong BATNA by the other party d) strongest
BATNA

162. a budget holder using an expression as this "I can make a decision right now to
sign you up with the largest customer in the region" during negotiation can be said to be
using ………….
a) expert power b) coercive and legitimate power c) reward and referent power
d) legitimate power

163. buyer seeking best price on commodity supplies may likely use the following
power
a) reward and coercive b) expert & reward c) legitimate/referent d) coercive,
information & reward

164. buyer seeking partnership with much larger strategic supplier can combine these
powers a) reward/referent power b) reward/expert power c)
coercive/informational d) legitimate/referent power
165. an individual buyer with limited personal power, representing a high-spending
growing international company with a strong brand identity has power of ……

a) referent b) informational c) organizational d) structural

166. if you represent a supermarket chain negotiating for avocados just after a major
international crop failure, your overall position will be weakened by which external force.
a) environmental b) economic c) socio-cultural d) political

167. if you are a car assembler and during negotiations with a supplier for lithium
battery-powered engines. The government passes a new law that will ban diesel engines
in the near future, it is likely that you will lose relative power in negotiation through
........... forces

a) political b) economic c) regulatory d) environmental

168. which STEEPLE element are most likely to influence the negotiation outcome of
this situation. A global food company negotiating the supply of cocoa from west African
producers

a) ethical/political b) economic/technological c) technological

d) environmental/political

169. a key objective of strategic procurement and category management is ……..

a) to ensure that buyers maximize its spend leverage b) to increase the buyer's referent
power c) to gather information about the buyer spend d) to position the buyer using
organizational power

170. in a buyer supplier relationship, existence of contractual trust is brought to lower

the?
a) administrative cost b) transaction cost c) quality cost d) rework

171. Repairing a relationship breakdown will involve the use of ……

 a) relationship management b) managerial skill c) principled negotiation d)
alternative dispute resolution

172. suppliers with high fixed cost vs variable cost ratio will not be able to offer
significant discount for bulk orders as most of their costs are …..
a) indirect cost b) variable cost c) direct costd) fixed cost

173. understanding your supplier cost base will help the buyer to know when they can
offer ………. a) price breakdown b) avoid cost c) cost reduction d) price
concessions

174. understanding cost elements allows the buyer to apply techniques such as? a)
continuous improvement b) reverse logistics c) reverse e-action/e-auction d)
value analysis/engineering

175. in price negotiations, it is always preferable and easier to target

a) supplier's profit b) supplier's product c) supplier's cost d) supplier's margin

176. itemizing allowable costs & they adding an agreed margin is known as
a) total cost of ownership b) whole life costing c) cost-plus contract d) margins

177. if something is bought for $50 and the selling price is $100, then the mark up is?
a) 50% b) 100% c) 60% d) 20%

178. if something is bought for $50 and the selling price is $100, then the gross margin
is?
a) 100% b) 50% c) 20% d) 40%

179. these are some examples of direct cost except?

a) transport b) finished products c) wages d) sales & marketing
 180. from a procurement point of view, reputational strength in a supplier might be
based on some or all of the following except
a) low/high value for money b) reliability c) strong customer d) reputational risk

S/N ANSWER
139. A
140. C
141. B
142. C
143. B
144. B
145. D
146. B
147. C
148. D
149. C
150. A
151. A
152. D
153. C
154. C
155. B
156. D
157. D
158. A
159. C
160. B
161. C
162. C
163. D
164. A
165. C
166. A
167. C
168. D
169. A
170. B
171. C
172. D
173. D
174. D
175. C
176. C
177. B
178. B
179. D
180. D
 ENRICHING PROCUREMENT MINDS

LEVEL 4 DIPLOMA REVISION QUESTION

L4M5 - COMMERCIAL NEGOTIATION

Q1. Which of the following are sources of conflict that are likely to arise in a negotiation
process? Select THREE that apply

a. Price
b. Communication
c. Payment terms
d. Clear processes
e. Risk share
f. Use of contract terms

Q2. An organisation has encountered a conflict with one of its critical suppliers. According to
the organisation’s procurement, the conflict is caused by poor quality materials that the
supplier has been providing. According to the information above, what is the most suitable
approach the procurement manager can use to resolve conflict?

a. Avoid the issue as the materials provided does not affect the organisation’s reputation
b. Take the matter to be resolved by the court straight away as the supplier will never
provide high quality materials
c. Take some discussions with the supplier to identify ways in which the issue can be
resolved
d. Switch to an alternative supplier who can provide better quality materials

Q3. In which of the following situations is a position-based negotiation suitable to be used by

the parties in a negotiation?

1. Critical product with high market complexity

2. Low-value product with an ease of switching
3. Supplier is ahead of others in terms of technical expertise
4. The supply contract is a one-off requirement of insignificant value
 a. 1 and 3 only
b. 2 and 4 only
c. 2 and 3 only
d. 1 and 4 only

Q4. Giving away something valuable in a negotiation refers to...

a. Accommodating
b. Compromising
c. Bargaining
d. Accepting

Q5. Stakeholder engagement is always necessary in every negotiation. Is this statement

correct?

a. Yes, stakeholders may be able to provide technical knowledge not available from the
procurement perspective
b. No, involving stakeholders may delay the negotiation as it may take long to make urgent
decisions
c. No, stakeholders do not have any negotiating expertise and they may make negotiation
impossible
d. Yes, stakeholder may be required as they may be able to persuade the supplier to
reduce its costs

Q6. In contract management, payments and use of incentive ensures which of the following?

1. Improved performance
2. Competitive benchmarking
3. Supplier motivation
4. Customer loyalty

a. 1 and 4 only
b. 2 and 3 only
 c. 3 and 4 only
d. 1 and 3 only

Q7. Actions taken by the buyer to improve supplier’s capacity, capability and performance is
known as:

a. Supplier relationship management

b. Supplier development
c. Supplier contract management
d. Contract variation

Q8. Providing training and preparation in the pre-negotiation phase is an important step to achieving a
positive negotiation outcome. Training and preparation should encompass which of the following
elements? Select THREE that apply.

a. Formulating an effective company strategy and stakeholder requirements

b. Understanding the role of team members as well as their expected contribution
c. Researching about the supplier’s negotiation tactics
d. Providing a brief to the team about the objective of the negotiation
e. Providing insight on the tactics to be used by the team
f. Checking the supplier’s negotiation history and track record

Q9. When undertaking high risk and high value negotiation, a high skilled and experienced negotiation
team is required for which of the following reasons. Select TWO that apply.

a. Good governance due to the availability of witnesses

b. Reduction of negotiating time and effort
c. The need to balance with the number of the supplier team
d. All areas of expertise will be covered and available when required
e. It helps put the supplier negotiation team under pressure

Q10. A buyer is seeking to use a conflict management style which takes into account its own concerns
and those of the supplying organisation. Is ‘accommodating’ the right conflict management style to use
in this situation?

a. Yes, accommodating recognise the mutual ground between the two parties in a negotiation
 b. No, accommodating will lead to the buyer ignoring its concerns at the expense of those of the
supplier
c. Yes, accommodating helps in keeping both satisfied and makes the relationship last longer
d. No, accommodating cannot be used as a means of resolving conflict between the parties

Q11. A buying organisation is about to enter into a negotiation meeting with one of its strategic
suppliers. They are seeking to reach an agreement for the supply of a raw material which is critical to the
buyer’s operation process. Both parties have agreed to use a negotiation approach which will allow
them to focus on areas of common ground and mutual benefits. Is distributive negotiation the right
approach to be used by the parties?

a. No, distributive approach use relative power to gain advantage at the expense of the other
b. Yes, distributive approach is all about expanding the pie and providing a wide range of possible
solutions
c. Yes, distributive approach focus more on the problem itself and how it can be solved
d. No, distributive can only be used where the buyer deals with the supplier of bottleneck items

Q12. A definition of a commercial negotiation is that it is aimed at achieving which ONE of the following?

a. Compromise
b. Concession
c. Savings
d. Agreement

Q13. Which ONE of the following conditions is typical of a collaborative negotiation?

a. Both parties must understand each other’s goals

b. All parties must have the same goals
c. The buyer must allow the supplier to achieve their goals
d. One party is prepared to accommodate the other

Q14. Which ONE of the following is the best example of a BATNA (best alternative to a negotiated
agreement)?

a. A concession is made by the buyer

b. An unachievable marker is replaced by the supplier
c. A walk-away point is reached b the buyer
d. An alternate supplier is available
Q15. Most negotiations require the buyer to be having an alternative for in case the negotiation doesn’t
go as planned, normally called best alternative to the negotiated agreement (BATNA). Which of the
following is not an advantage of having a best alternative to the negotiated agreement?

a. BATNA allows the supplier to use coercive tactics on the buyer to ensure the buyer end up
agreeing to any available
b. BATNA allows the buyer to stand up to its own interest and need throughout the negotiation
process
c. BATNA enables the buyer to make a switch where never the supplier proves in competent
before the deal is made
d. BATNA allows the buyer to identify other cost-efficient sources of supplier

Q16. Which of the following are the elements of a principled negotiation that both parties should take
into account to establish a long term working relationship?

1. Separate people from the problem

2. Use of bargaining power to extract the best value
3. Focusing more on positions rather than the interest of the parties
4. Devising many options for mutual gains before deciding what to do

a. 1 and 3
b. 2 and 3
c. 2 and 4
d. 1 and 4

Q17. Distributive negotiations are most typically associated with which ONE of the following?

a. Purchasing items where both parties gainshare the rewards equally

b. Purchasing a limited source of items through an auction against other buyers
c. Purchasing innovative items where both parties share the risk equally
d. Purchasing items from a strategic long-term supplier

Q18. A collaborative negotiation requires both parties to devise a range of options that will be useful in
identifying a mutually beneficial solution. Which of the following may be the obstacles to identifying the
options for problem solving? Select the TWO that apply.
 1. Researching more about the problems and the concerns of the other party
2. Taking the final decisions without considering other possible options
3. Asking effective question to gain clarity on what the other party’s position is
4. Using power to limit the options generated by the other party

a. 1 and 2 only
b. 2 and 3 only
c. 2 and 4 only
d. 1 and 3 only

Q19. In a collaborative negotiation the ideal outcome is...

a. Win-win
b. Win lose
c. Lose-lose
d. Perceived win-win

Q20. Which of the following is a benefit of team negotiating compared to negotiating individually?

1. Ability to influence the other party

2. Ease of choice of location between the parties
3. Involvement of wider range of experts
4. Enhanced decision making

a. 1 and 2 only
b. 2 and 4 only
c. 1 and 3 only
d. 3 and 4 only

Q21. Which of the following are the sources of personal power in a negotiation? Select the THREE that
apply.

a. Reward
b. Perception
c. Tactics
d. Legitimate
 e. Expert
f. Skill

Q22. Which of the following describes the power that arises from an individual’s high levels of skills and
knowledge?

a. Legitimate power
b. Reward power
c. Expert power
d. Resource power

Q23. A logistics company has a preferred supplier for the replacement of its vehicle fleet. The preferred
supplier knows it is the only organisation that can meet the logistics company’s needs, in terms of the
type of vehicle required the volume of vehicles required and in the timescales required. Which ONE of
the following would be a BATNA (best alternative to a negotiated agreement) for the logistics company
to use as leverage in the negotiation?

a. To specify smaller vehicles from another supplier and recruit more drivers
b. To buy one year old vehicles from a competitor which has just gone into liquidation
c. To threaten to reduce the number of vehicles it wants to buy from the supplier
d. To cancel the order altogether and carry out more regular maintenance on the ageing vehicle
fleet

Q24. Which of the following may enhance the buyer’s attractiveness to the supplier organisation? Select
the TWO that apply.

a. On time payments
b. Infrequent transactions
c. Ethical dealings
d. Use of power
e. Clear and concise documentation
f. Fraudulent behaviour

Q25. Which ONE of the following is a characteristic of an arm’s length relationship between two parties?

a. Transparency and openness

b. High level of interdependency
c. Infrequent and long distant dealings
 d. High levels of trust

Q26. A category manager is having an unsuccessful negotiation with a supplier, and it has decided to
adopt a different approach to the negotiation. The category manager reminds the supplier of its
contractual obligations and says ‘if we cannot reach agreement here today’ do not forget that i can
serve notice to terminate the contract. This is an example of which type of power?

a. Coercive
b. Expertise
c. Reciprocity
d. Reward

Q27. A procurement professional is able to influence the outcome of a negotiation due to their superior
knowledge and because they have threatened to cancel the contract if they are unhappy with the
outcome. Which of the following sources of personal power are being used?

1. Reward power
2. Referent power
3. Coercive power
4. Expert power

a. 1 and 2 only
b. 2 and 3 only
c. 3 and 4 only
d. 1 and 4 only

Q28. In which ONE of the following situations will a collaborative negotiation be most suitable to be
used by the parties?

a. Generic products which there are many suppliers

b. Products characterised with high market complexity and scarcity
c. Discussions undertaken with a supplier who seems to be lacking ethics
d. Low risk and low value products

Q29. Which of the following are examples of direct costs for a manufacturing organisation? Select the
TWO that apply.
 a. Raw materials
b. Maintenance repair and operating (MRO)
c. Stationery
d. Salaries of directors
e. Salaries of production staff

Q30. Costs that are affected by the change in level of output are known are known as...

a. Fixed costs
b. Step costs
c. Indirect costs
d. Variable costs

Q31. Which of the following are characteristics of fixed costs that are incurred by an organisation? Select
the TWO that apply.

a. Are not affected by the level of output

b. They never increase for the entire organisational life
c. Must be paid even if there in zero activity
d. Are affected by the activity of the organisations assets
e. Do not affect a company which engages in international sourcing

Q32. A supplier has provided a breakdown of its costs, which comprises of $250 000 fixed costs and $75
per unit variable costs. Its total cost for product X amount to $800 000. It determines its pricing based
on applying a fixed profit percentage of 25% of these costs, so the price is $1 million. The 25% profit is
known as...

a. Margin
b. Absorption
c. Mark-up
d. Costed

Q33. Costs that cannot be attributed to a specific unit of the organisation’s output are known as which
ONE of the following?

a. Fixed costs
b. Indirect costs
c. Variable costs
 d. Direct costs

Q34. ‘Materials not used in production process’ and ‘salaries of organisation’s directors’ are examples of
which ONE of the following?

a. Indirect costs
b. Labour costs
c. Budgeted cost
d. Step costs

Q35. The supplier’s break -even point is reached when its revenues exceed which of the following?

1. Opportunity costs
2. Total fixed costs
3. Variable production costs
4. Equity costs

a. 1 and 3 only
b. 2 and 3 only
c. 3 and 4 only
d. 1 and 2 only

Q36. Understanding the supplier’s profit margins in a negotiation is a useful piece of information as it
identifies the profitability of the contract in relation to the supplier’s costs. Is this statement TRUE?

a. Yes, a positive profit margin means the supplier is breaking even as a company
b. Yes, it expresses profit as a percentage of costs
c. No, the profit margin relates to the supplier’s general overheads
d. No, it relates to the amount of profit made in relation to the price

Q37. During a negotiation, unethical use of power to squeeze the supplier’s profit may, in the long-term,
affect which of the following?

1. Competitor pricing
2. Sustainability
3. Continuity of supply
4. Immediate lead times
 a. 2 and 3 only
b. 1 and 4 only
c. 3 and 4 only
d. 1 and 2 only

Q38. TBRF Manufacturers is a global leading vehicle manufacturing organisation based in Germany. It
prides itself on manufacturing of fancy cars which its supply to customers around the world. Due to a
high demand of their products, TBRF Manufacturers management sees it fit to charge very high prices
which are not connected with its cost structures. Their costs are based on the reputation of their
company and customer perception of product superiority. Which ONE of the following pricing strategy is
TBRF Manufacturers using?

a. Premium pricing
b. Skimming
c. Penetration
d. Promotional pricing

Q39. Which of the following are the factors that determine demand for a good or service provided by an
organisation? Select the TWO that apply.

a. Price
b. Weather activities
c. Necessity of the item
d. Government regulations
e. Competitor activity

Q40. A situation in the market where there are no shortages or surplus is known as...

a. Satisfaction level
b. Equilibrium point
c. Break-even point
d. Profitability point

Q41. Which of the following are features of a ‘perfect competition’ type of market?

1. Differentiated products supplied

 2. Homogenous product provided b many supplier
3. Restricted knowledge and information about the market
4. No barriers to entry for new suppliers

a. 2 and 4 only
b. 1 and 4 only
c. 2 and 3 only
d. 1 and 2 only

Q42. Which of the following ways can allow the buyer to deal with a monopoly supplier in a beneficial
manner?

a. Use market power to negotiate lower prices

b. Make yourself an attractive buyer
c. Coercing the supplier and threatening to walk away from the deal
d. Making late payments to the supplier to frustrate him

Q43. Which of the following are examples of macroeconomic factors that the buyer must take into
account when negotiating with a supplier?

1. Competitor prices
2. Inflation rates
3. Industrial activity
4. Unemployment rate

a. 1 and 2 only
b. 2 and 3 only
c. 3 and 4 only
d. 2 and 4 only

Q44. In distributive negotiations, the parties use their bargaining powers to get the best deal at the
expense of the other party. This type of negotiation is characterised by both parties being too structured
to achieve what they have outlined in their pre-negotiation planning and preparation. This approach is
more likely to results in deadlocked negotiation where the parties can no longer reach any further
agreement. Which of the following are the measures to be used by the parties in unlocking a deadlocked
negotiation?
 1. Avoid taking any break until the parties reach an agreement that favours all
2. Bring in a third party such as the user of the product to alter the dynamic of the meeting
3. Have a good understanding of the common ground and where they may have been a
misunderstanding
4. Terminate the negotiation and move on the best alternative to a negotiated agreement

a. 1 and 2 only
b. 1 and 3 only
c. 2 and 4 only
d. 2 and 3 only

Q45. After a successful negotiation, the lead negotiator and his superior agree on having a pre-
negotiation evaluation as the both believe this will be a perfect approach to measure their negotiation
performance and achievement of intended objectives. Will this be necessary?

a. Yes, because pre-negotiation evaluation will allow them to assess how far they have been
successful
b. No because the negotiation has already been done and dusted it can only be used for the next
negotiation
c. Yes because it allows them to know what went wrong in the negotiation for future lessons
d. No , because pre-negotiation can only be used before the negotiation to assess the
approaches and preparedness of the negotiating team

Q46. In negotiation procurement organisation will generally have more power with a supplier that is in a
monopolistic position in a market. Is this statement true?

a. No, because the supplier might not have enough capacity

b. Yes, the buyer will have several suppliers to choose from
c. No, the supplier is in a market dominant position
d. Yes, as long as buyer runs a competitive tender

Q47. Which of the following are the benefits for the buyer of having a clear negotiation strategy?

1. Expected negotiation outcome are clearly defined and understood

2. Delays decision making process
3. Reduces process flexibility where changes are required
4. Negotiation boundaries are clearly defined
 a. 1 and 4 only
b. 2 and 3 only
c. 1 and 3 only
d. 3 and 4 only

Q48. . Which of the following are the important points to consider when developing a negotiating
strategy?

1. Consulting with key stakeholders to understand what their long term plans are
2. Focusing more on short term gains rather than in the long term growth
3. The mission and vision of the organisation
4. The tactics normally adopted by the organisation in their negotiation processes

a. 1 and 2 only
b. 2 and 3 only
c. 1 and 3 only
d. 2 and 4 only

Q49. Before entering into a long term relationship with a particular buyer, the supplier determines the
attractiveness of the buyer which will influence a smooth flow of business between the two parties.
Which of the following factors influences a buyer’s attractiveness? Select THREE that apply.

a. The ability to provide sensitive information without worry

b. Willingness to pay invoices well in time
c. Willingness to provide larger business volumes to the supplier business
d. Doing business with many other suppliers
e. A buyer providing a strong brand that supplier is willing to be associated with
f. Having a reputation of contract braches from other contracts

Q50. CRANVET Limited is a supplying company mainly supplying many of its customers with raw
materials to use in their production operations. They are set to enter into a negotiation with DIAMOND
Investments to negotiate a new deal worth millions. CRANVET Limited negotiating team are assessing
the buyer organisation to find the suitable approach to use during the negotiation. In their conclusion,
they found out that DIAMOND Investment will be providing consistent larger volumes of business
throughout their agreement also with the possibility of negotiating other more valuable contact.
However, DIAMOND Investment has a bad history of failing to pay their suppliers on time. What is the
most suitable approach that CRANVET Limited is likely to use?

a. Try to minimise the volume of business that CRANVET Limited will offer to DIAMOND
Investments
b. Exploit the opportunity by charging higher price to get the best out of the deal
c. Develop the relationship with DIAMOND Investments
d. Enter into a partnership with DIAMOND Investment

Q51. Which of the following are examples of warm negotiation styles that can be used by the parties in a
negotiation? Select the TWO that apply.

1. Good listener
2. Desire to achieve gains at one another’s expense
3. Relating to people well
4. Strongly standing for one’s concerns

a. 2 and 4 only
b. 1 and 3 only
c. 3 and 4 only
d. 2 and 3 only

Q52. CRANVET Limited is a supplying company mainly supplying many of its customers with raw
materials to use in their production operations. They are set to enter into a negotiation with DIAMOND
Investments to negotiate a new deal worth millions. CRANVET Limited negotiating team are assessing
the buyer organisation to find the suitable approach to use during the negotiation. In their conclusion,
they found out that DIAMOND Investment will be providing consistent larger volumes of business
throughout their agreement also with the possibility of negotiating other more valuable contact.
However, DIAMOND Investment has a bad history of failing to pay their suppliers on time. What is the
most suitable approach that CRANVET Limited is likely to use?

a. Try to minimise the volume of business that CRANVET Limited will offer to DIAMOND
Investments
b. Exploit the opportunity by charging higher price to get the best out of the deal
c. Develop the relationship with DIAMOND Investments
d. Enter into a partnership with DIAMOND Investment
Q53. Conflict might arise between two negotiating parties due directly to which of the following? Select
TWO that apply.

a. Regular communication
b. Personality clash
c. Different perceptions
d. Partnership working
e. The need to summarise

Q54. Can closed questions be useful in a negotiation?

a. Yes, because they can encourage detailed responses

b. No, because closed questions only gather opinions
c. Yes, because they are good to check understanding
d. No, because open questions should always be asked

Q55. Which of the following are stages of the negotiation process? Select the THREE that apply.

a. Questioning
b. Preparation
c. Bargaining
d. Investigating
e. Rehearsing
f. Testing

Q56. Why is sharing of information a key part of achieving a win/win outcome from the negotiation?
Select TWO that apply.

a. It builds mutual trust as each party will return the trust shown in them by the other party
b. It gives the supplying party important information to negotiate a longer contract term
c. It allows both parties to offer solutions that will help solve the other parties’ issues
d. It allows the buyer to improve its specifications to get better offers from other suppliers
e. It gives the buying party important information that it can use to negotiate lower prices

Q57. Which of the following are recognised forms of non verbal communication? Select the THREE that
apply.

a. Hand gestures
 b. Informal communications
c. Body posture
d. Short presentations
e. Facial expressions
f. Complex messaging

Q58. . Which of the following are examples of ‘open’ questions?

1. How many of the deliveries per week will be made

2. How do you plan to meet our requirements for the new product
3. Will you be able to generate 10% savings we need within the timescales
4. What might be the impact of the weather on your delivery performance

a. 1 and 3 only
b. 2 and 3 only
c. 2 and 4 only
d. 1 and 4 only

Q59. Which of the following are types of questions that are useful to obtain comprehensive detailed
answers from the other party that will also include their own opinions and thoughts? Select the TWO
that apply.

a. Open
b. Probing
c. Leading
d. Narrow
e. Closed

Q60. Which approach to conflict resolution describes a situation where the buyer is cooperative but
attempts to stand up for its own interests?

a. Competing
b. Accommodating
c. Collaborating
d. Compromising