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Quiz CIPS - Marvelous L4M5 - Commercial Negotiation Relevant Answers

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CIPS Commercial Negotiation Sample Questions (Q26-Q31):

NEW QUESTION # 26
Which of the following is the purpose of using stakeholder support level scale?

A. To estimate the gap and the progress towards desired levels of support
B. To identify key stakeholders
C. To identify stakeholder level of influence and interest and plot them on stakeholder map
D. To identify stakeholder's needs and expectations

Answer: A

Explanation:
In order to estimate the gap and the progress towards desired level of support, a stakeholder support scale can be used by the procurement internally. The support level scale measures stakeholder commitment. Current support level for the procurement/negotiation objectives should be gained from engagement with key stakeholders. The following is an example of stakeholder support level scale:
Graphical user interface, application Description automatically generated

LO 1, AC 1.1

NEW QUESTION # 27
Which of the following are internal factors when a supplier is making its pricing decision?

A. 1 and 4 only (Price elasticity of demand and The stage in the product life cycle)
B. 2 and 3 only (Environmental legislation and Risk management)
C. 3 and 4 only (Risk management and The stage in the product life cycle)
D. 1 and 2 only (Price elasticity of demand and Environmental legislation)

Answer: C

NEW QUESTION # 28
According to Professor Gavin Kennedy, in which of the following forms of dispute resolution, both parties will voluntarily exchange their ideas and beliefs?

A. Persuasion
B. Negotiation
C. Litigation
D. Gambling

Answer: B

Explanation:
Professor Gavin Kennedy highlights that we need to distinguish negotiation from other forms of decision-making by focusing on what is unique about it (the voluntary exchange) and not shared by other techniques such as persuasion, gambling (e.g., coin tossing), command decision, instruction, litigation and coercion.

NEW QUESTION # 29
Which of the following is most likely to be a reason why a supplier charges its customer higher price after it has reached the break-even point?

A. Supplier may want to encourage buyer's demand
B. Supplier may need to open new facilities to meet increasing customer's demand
C. The supplier may have reached economy of scale
D. Supplier may have high fixed cost - variable cost ratio

Answer: B

Explanation:
'Supplier may want to encourage buyer's demand': the buyer tends to prefer lower price, if supplier wants to encourage its customers to buy more, it needs to offer discount at bulk amount. So this option is not acceptable.
'Supplier may have high fixed cost - variable cost ratio': Supplier with high fixed cost needs high volumes to break even, but once achieved, it may be able to offer significant discounts for bulk orders
'The supplier may have reached economy of scale': when economy of scale is reached, cost per unit will be minimal which often leads to more favourable price.
'Supplier may need to open new facilities to meet increasing customer's demand': Increasing customer's demands may excess supplier's current capacity. Therefore, supplier may need to extend its capacity by investing more in facilities. To cover these fixed cost investment, supplier may charge higher price.
LO 2, AC 2.1

NEW QUESTION # 30
What is the most likely outcome when two organisations with adversarial relationship negotiate with each other?

A. Lose lose
B. Win win
C. Win lose
D. Deadlocked

Answer: C

Explanation:
:
An adversarial relationship in purchasing and supply arises when identical or equivalent good or services are available from competing suppliers and buyers/sellers are trying to gain an advantage over each other. Low levels of trust are characteristic of adversarial relationships. The outcome when two organisations with adversarial negotiate is most likely to be win-lose.

NEW QUESTION # 31
......

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