CIPS Commercial Negotiation – L4M5 paper *10 Leave a Comment / By Admin / September 3, 2024 Before you begin ✍️ You are about to practice the questions set for CIPS Commercial Negotiation – L4M5 paper *10. Please put away any distractions and focus all your efforts on passing. ⏱️Time limit: 1 hour 30 minutes At the end of your examination practice, you will 📝 View your grade ✅ View the correct answers NOTE: The answers provided haven't been verified by an official CIPS-affiliated entity, therefore consider discussing your concerns with the instructor or fellow students for clarification. To begin your exam practice, wait a few seconds for the start button to appear, then tap the START button. "We're rooting for you all the way!" All the best. 😃 1. Trust/ partnership- building behavior include all except? Quick sharing of information Strong sense for ownership for high quality service. Joint issue resolution Closed discussion and root cause of failure None 2. Signs of trust in a business relationship include all except: Constant shadowing and oversight for control Real time sharing of information on needs and priorities Clear criteria for decision making? High-performance team members feeling empowered None 3. Which is an example of the vicious circle of blame? Clear criteria for decision making Joint use resolution "I can’t act like a partner until you treat me as one." Strong sense for ownership for high-quality service. None 4. The main factor that distinguishes commercial negotiation from all other types of negotiation is: It is transparent The fact it’s driven by personalities The team involved The centrality of price None 5. Cost-saving measures include two types: Traditional and unexploited Traditional and non- traditional Organizational and traditional Organizational and unexploited None 6. Traditional cost-saving areas focus on all except: Downsizing Reengineering Automation and process Cost analysis None 7. Unexploited cost-saving areas focus on all except: Downsizing Supplier involvement Procurement Cost analysis None 8. Which three of the following are direct costs? (1) Raw materials, parts, and assemblies(2) Labor or wages for production work(3) Expenses tied to specific products, batches, or services(4) Office and factory consumables(5) Non-production staff costs (management, sales)(6) Rent, rates, insurance, and bad debt provisions 4,5, and 6 1, 2, and 3 3, 4, and 5 1, 2, and 4 None 9. Which three among following is an indirect cost? (1) Raw materials, parts, and assemblies(2) Labor or wages for production work(3) Expenses tied to specific products, batches, or services(4) Office and factory consumables(5) Non-production staff costs (management, sales)(6) Rent, rates, insurance, and bad debt provisions 1, 2, and 3 4,5, and 6 3, 4, and 5 1, 2, and 4 None 10. Semi-variable costs are costs with fixed and variable elements. Which of the following is not an example of a semi-variable cost? Water Stationery Gas Electricity None 11. ______ is a spend that can be influenced through negotiations or leverage with suppliers. Tail-spend High speed Semi-variable cost Addressability of spend None 12. Which spend should have the highest addressability, if possible? Regulations speed Suppliers mark ups and employees benefits Commodity materials inputs Starting minimum wage None 13. Understanding where and with whom your supplier spends money (or the cost breakdown) can help you: Understand the rivalry in the supplier’s market Build a value-adding procurement strategy Know when and where they can offer concessions Identify substitutes you can leverage None 14. Ray Carter coined ‘STOPS WASTE’ as a mnemonic for cost reduction. Which ten ideas are included in STOP WASTE? (1) Standardization(2) Transportation(3) Over-engineering(4) Packaging(5) Substitution(6) Weight(7) Unnecessary processing(8) Suppliers input(9) To make(10)Eliminate(11) Direct cost(12) Indirect cost 3, 4, 5, 6, 7, 8, 9, 10, and 11 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 1, 3, 4, 5, 6, 7, 8, 9, 10, and 12 , 3, 4, 6, 7, 8, 9, 10, and 12 None 15. When a factory first opens, suppliers may load overhead costs onto early buyers. As orders increase, average costs drop until they reach a low plateau. What is this low plateau called? Sweet spot Low cost Minimum cost Tail spend None 16. Buyers negotiating at the long-range average cost (LRAC) sweet spot will be in a: Disadvantaged position to negotiate a better price than early or late buyers Less strong position to negotiate a better price than early or late buyers Unable to negotiate a better price than early or late buyers Stronger position to negotiate a better price than early or late buyers None 17. What is the formula for breakeven point? Breakeven point = Fixed cost / (Price + Variable cost) Breakeven point = (Price – Variable cost) / Fixed cost Breakeven point = (Price + Variable cost) / Fixed cost Breakeven point = Fixed cost / (Price – Variable cost) None 18. What is the formula for contribution? Contribution = Price – Variable cost Contribution = Price / Variable cost Contribution = Price × Variable cost Contribution = Price + Variable cost None 19. ______ is an approach to allocating overheads where indirect costs are loaded into direct costs using an estimated allocation basis. Marginal costing Variable costing Absorption costing Activity-based costing None 20. ______ is the cost of producing an additional unit of output. For example, a supplier produces 100 units at a cost of 1005. Absorption costing Variable costing Marginal costing Activity-based costing None 21. Absorption costing may increase prices, whereas marginal costing may reduce prices. Is this statement true? It’s true with absorption costing but not marginal costing Yes, it's true It’s true with marginal costing but not absorption costing No, it’s not true None 22. A professional procurement officer may seek to persuade a supplier to price based on marginal costs rather than absorption costing. True or false? False True None 23. Costing methods include all except: Marginal or variable costing Fixed costing Activity- based costing Absorption costing None 24. ______ is the practice of varying the price for a product or service based on demand. Marginal costing Absorption costing Dynamic pricing Variable costing None 25. Which of the following is not part of traditional costing? Provides review accounting-related information Looks at costs allocated based on volume Associate the cost of product with the actual effort spent Not a true reflection of actual costs incurred None 26. Which of the following is not part of activity-based costing? Looks at activities to determine costs Looks at costs allocated based on volume Assigns costs based on resource consumption Provides actionable information for improvements None 27. When considering the total cost of supply, the following factors are important (choose five): (1) Payment terms(2) Delivery speed and lead time(3) Service level and response time(4) Key performance indicates KPI(KPIs)(5) Service level agreement(SLAs)(6) Willingness and ability(7) Provision of value-added service (e.g., unpacking, delivery to line, setup) 1, 2, 3, 4. And 5 3, 4, 5, 6, and 7 2, 3, 4, 5, and 6 1, 2, 3, 6, and 7 None 28. What is the formula for mark-up (%)? A = price-cost x 100% B =price+cost x 100% Cost price C = price-cost x 100% D= price+cost x 100% Price price A D C B None 29. How is margin calculated? A = price+cost x 100% B =price+cost x 100% Cost Cost C = price-cost x 100% D= price+cost x 100% Price price D C B A None 30. Pricing strategies used by suppliers within category management groups include: (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 3, 4, 5, 6, and 7 1, 2, 3, 4, and 7 1, 2, 3, 4, and 5 2, 3, 4, 5, and 6 None Please proceed to view your grade. Fingers crossed🤗 Time's upTime is Up!
