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1. An organization should develop different relationships which are appropriate to each supplier situation.

Which ONE of the following analysis methods could help to identify these?

2. Rose is a senior buyer from a skiing equipment retailer. Rose is concerned about the current ski boot shortage and the number of invoicing problems from a key supplier. She has decided to have a video conference with Victor, CEO of the supplier. Initially, she intends to threaten Victor with contract termination unless he can improve the situation. However, she is a little wary of doing this as the switching costs are high. Eventually, she decides to seek solutions by encouraging the other party to offer their views and ideas. Rose also prepares some ideas to discuss with Victor.

Which of the following is the persuasion method that Rose intends to use in the forthcoming conference?

3. Which of the following are features of a single-sourced type of relationship on the relationship spectrum?

1) Exclusivity granted in relation to a particular product

2) The supplier is an oligopoly market structure

3) The supplier is trusted and collaborative

4) Framework contracts are used to identify the supplier

4. Which of the following is definition of elasticity of demand in microeconomics?

5. Which of the following are microeconomic factors? Select THREE that apply.

6. Which of the following may help the procurement professional increase expert power in commercial negotiation? Select TWO that apply.

7. Which of the following is the definition of safety margin?

8. Which of the following can help both parties to break the vicious cycle of blame when a relationship needs repairing? Select TWO that apply.

9. If the price of a good is above the equilibrium price, which of the following will happen?

10. When is an adversarial style of negotiation appropriate?

11. A new manager has been appointed with responsibility for an organisation's category which has major impact on organisational cost base and there are little competitions in the supply market. They have an objective to improve supplier cost structures over time.

Which of the following should they carry out first?

12. Where there are high levels of commitment to relationships between both the buyer and supplier, this is seen as collaborative and beneficial to negotiations.

Is this statement correct?

13. Which of the following are tools that help procurement visualise cost breakdowns of products and services purchased from supplier?

1. Spend candlesticks

2. Spend tree

3. Aggregate expenditure model

4. Spend waterfall

14. The activity of listening in a negotiation includes which of the following processes?

1) Hearing

2) Interpreting

3) Rapport

4) Influencing

15. Which of the following should be done when undertaking a reflection activity on negotiation? Select TWO that apply.

16. When prices of input materials increase, supply curve shifts to the left while demand remains stable.

The shift of supply will tend to cause which of the following?

17. During a negotiation, Jose Gomez, the salesperson for a strategic supplier, states that his sales director will not approve discounts against initial purchases. However, Jose offers a 5% discount on the aftercare package, which will provide the same monetary saving. Sally Pampas requires both the product and the aftercare package and has an objective to achieve a 5% discount off the purchase price. To achieve a win-win (integrative) negotiation, Sally should...

18. Jasmine and the IHL sales team have a negotiation scheduled with one of AB’s lead buyers, Samuel, at AB’s premises. This is one of the biggest negotiations that Jasmine has been involved in and is eager not to make any mistakes. Jasmine has heard from a colleague that Samuel tends to adopt an integrative negotiation style. IHL senior management decides to send a team of three members to the negotiation. Jasmine is among the team and she is assigned to check body language, reactions, feeds insight to her leader and to record important comments and information from the meeting for minutes.

Which of the following are roles of Jasmine in the forthcoming negotiation? Select TWO that apply.

19. The bargaining power of buyers is likely to be high in relation to suppliers in which of the following situations?

20. When implementing value analysis or value engineering, which of the following acronyms reminds both buyer and supplier of ideas on removal, substitution and design-out of cost elements?

21. SBL provides contract bathroom furniture and fittings for a wide variety of domestic and commercial clients. To some suppliers, SBL spend claims a large portion of their revenue. But SBL is famous for imposing draconian obligations on these suppliers.

Which of the following is most likely to be overarching objective of these suppliers to SBL?

22. Which of the following are most likely to turn buying organisation into an unattractive customer in supplier's perspective? Select TWO that apply.

23. Maria is a professional services category buyer within the National Health Service. Due to the severe financial budget cutbacks the National Health Service is facing, the procurement team has been tasked with achieving cost savings so that funding available can be spent on patient care. Maria plans to achieve savings with one of her collaborative suppliers.

Which negotiation approach should she undertake?

24. Which of the following are behaviours that builds trust between the buyer and the supplier in business relationship? Select TWO that apply.

25. In a commercial negotiation, a procurement professional negotiates on his company's behalf. The power of buying organisation is the only factor that influences the behaviours of the other party.

Is this assumption true?

26. Premium pricing strategies used by suppliers are characterised by which of the following? Select TWO that apply.

27. An adversarial style of negotiation is appropriate where the buyer has greater bargaining power over the supplier.

In what other situations may the buyer adopt this style of negotiation?

28. In which of the following persuasion methods, the influencer uses logics and objective reasons to persuade the others to buy into influencer's ideas?

29. Hammad Alsuwaidi is a procurement professional leading a negotiation for a vehicle rental contract. Hammad has a clear goal to negotiate a two-year contract in exchange for a minimum of a 20% discount. During the negotiation, Hammad presents to the supplier the facts, figures, and justification for a 20% discount.

Which of the persuasion methods below has Hammad chosen?

30. A supplier can produce a product for $160. The supplier sells the product to their client for $240, making a profit before tax of $80 on the transaction.

What is the mark-up profit percentage earned by the supplier on this transaction?

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

32. A procurement professional is dissatisfied with how a recent negotiation was concluded.

What could they do to improve their negotiation approach?

1) Seek feedback from the supplier on their recent performance

2) Prepare for all negotiations with a WIN/LOSE (distributive) approach

3) Involve lots of people in future negotiations

4) Undertake reflective practice after each negotiation

33. A purchasing manager is having a negotiation with a supplier to extend the duration of the contract. In order to persuade the supplier to cut the cost by 10%, she promises to shorten the payment period from 45 days to 30 days for each delivery. The supplier's representative does not agree the offer and clearly states that his proposed price is already lower than the market price.

The purchasing manager has used which type of power?

34. During a negotiation, a procurement manager suggests that the two companies should split the difference which would benefit both the supplier and buyer.

Which persuasion method is she using?

35. How can having a best alternative to a negotiated agreement (BATNA) support the buyer in a negotiation? Select THREE options that apply.

36. Which of the following is the most appropriate pricing arrangement in contracts where major inputs are commodities?

37. In airline industry, suppliers prefer to adopt dynamic pricing in order to constantly monitor and change their fares in response to market conditions.

Dynamics pricing is based on which costing method?

38. Which type of question should be used to receive affirmation on statement?

39. The trust is built based on the other party's professional qualifications or proven or certified technical capability or experience is known as...?

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

1) Price elasticity of demand

2) Environmental legislation

3) Risk management

4) The stage in the product life cycle