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Commercial Negotiation L4M5 Paper *2.
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1.
Which of the following are characteristics of fixed costs that are incurred by an organisation? Select the TWO that apply.
2.
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...
3.
Costs that cannot be attributed to a specific unit of the organisation’s output are known as which ONE of the following?
4.
Materials not used in production process’ and ‘salaries of organisation’s directors’ are examples of which ONE of the following?
5.
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
6.
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?
7.
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
8.
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?
9.
Which of the following are the factors that determine demand for a good or service provided by an organisation? Select the TWO that apply.
10.
A situation in the market where there are no shortages or surplus is known as...
11.
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
12.
Which of the following ways can allow the buyer to deal with a monopoly supplier in a beneficial manner?
13.
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
14.
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
15.
After a successful negotiation, the lead negotiator and his superior agree on having a prenegotiation 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?
16.
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?
17.
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
18.
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
19.
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.
20.
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?
21.
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
22.
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
23.
Conflict might arise between two negotiating parties due directly to which of the following? Select TWO that apply.
24.
Can closed questions be useful in a negotiation?
25.
Which of the following are stages of the negotiation process? Select the THREE that apply.
26.
Why is sharing of information a key part of achieving a win/win outcome from the negotiation? Select TWO that apply.
27.
Which of the following are recognised forms of non verbal communication? Select the THREE that apply.
28.
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
29.
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.
30.
Which approach to conflict resolution describes a situation where the buyer is cooperative but attempts to stand up for its own interests?
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