Free Commercial Negotiation Exam L4M5 Exam Practice Test

A buying organisation with a low spend but the reputation for paying on-time. In order to increase buyer's leverage in negotiation with suppliers, which of the following should be a priority of this buyer?

• Unclear tender award criteria
• Volume separation
• Spend concentration
• Unavailable technical support

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

• Goodwill trust
• Contractual trust
• Irrevocable Trust
• Competence trust

In a detailed cost breakdown, a company has a salary cost of 9%, raw materials cost 51% and overheads cost 24%. Which of the following represents the mark-up of that company?

• Approximately 84%
• Approximately 19%
• Approximately 116%
• Approximately 16%

Which of the following are ways of developing rapport when undertaking a negotiation?

• 1 and 3 only (Engaging in assertive communication and Engaging in active listening)
• 1 and 2 only (Engaging in assertive communication and Using probing questions)
• 3 and 4 only (Engaging in active listening and Actively showing empathy)
• 2 and 4 only (Using probing questions and Actively showing empathy)

Collaborative approach in negotiation not only can fully satisfies the concerns of both, but also ensure that neither party will seek to be opportunistic in later time during the life of the contract. Is this statement true?

• Yes, because all parties must have exactly the same goals in integrative negotiation
• No, because any party may leverage its own advantage during the contract
• Yes, because both parties have well understood each other's goals when they engage in collaborative negotiation
• No, because the parties will always find a compromise solution in integrative approach

'What specific tests do you carry out to ensure quality is achieved?' This is an example of which type of negotiation question?

• Leading
• Probing
• Reflective
• Closed

Which of the following is categorised as fixed cost?

• Additional pallet hires due to higher demand in year-end season
• Land rental paid in advance
• Governments taxes
• Raw materials for next year production

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 from45 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 hasused which type of power?

• Reward
• Expertise
• Coercive
• Informational

Which of the following are examples of push techniques in commercial negotiations? Select TWO that apply.

• Threat of punishment, costs and damage
• Listening to, involving and supporting others
• Argument based on information, logic and reason
• Working together to define the problem, the goals and the best solution
• Using language and imagery to 'paint a picture others can see'

Citywide Developments Ltd (CDL) is a construction programme management company that delivers the design and build of high-value property development schemes. CDL uses third-party consultant design services, using named consultants in the contract. CDL has recently observed increases in the consultancy day rate for these consultants. Which of the following tradeable concessions could CDL offer when negotiating with the suppliers of design services, in order to achieve lower rates of pay, but without lowering the quality of service?

• Accept unqualified trainee consultants
• Offer a shorter consultant working day
• Reduce the volume-based rate discounts
• Remove the requirement for the named personnel