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CIPS Commercial Negotiation Sample Questions (Q221-Q226):

NEW QUESTION # 221
Ranjit is a facilities category buyer for a hospital in the UK and is managing an overseas sourcing project for security guard clothing and personal protective equipment. Ranjit is aware that foreign exchange fluctuations can create risk for his organisation and would like to remove this risk. Ranjit has asked the international suppliers to quote in GBP sterling. Will Ranjit's approach remove the fluctuation risk for the hospital?

A. No, as the value of the supplier's currency may decrease
B. Yes, as the risk will sit with the supplier
C. No, as the risk will sit with the buyer as the value of GBP sterling may increase

Answer: B

NEW QUESTION # 222
Which of the following occur within the planning and preparation stage in a negotiation process? Select THREE that apply.

A. Narrowing the range of solutions
B. Defining the constituents
C. Making as few concessions as possible
D. Understanding the other party
E. Using questions to elicit information
F. Analyse the bargaining power

Answer: B,D,F

Explanation:
In the planning and preparation stage of negotiation, it is essential to build a strong foundation by understanding various factors that influence the negotiation outcome. According to CIPS resources, critical aspects of preparation include:
Understanding the other party (A): This helps in anticipating their needs, objectives, and potential negotiation styles, leading to more strategic discussions.
Defining the constituents (B): This involves identifying all stakeholders or parties impacted by the negotiation, ensuring their interests are considered when planning the negotiation strategy.
Analyzing the bargaining power (F): Understanding the relative power each party brings to the negotiation helps in setting realistic goals and predicting possible negotiation dynamics.
These elements are foundational in ensuring a well-rounded approach and enabling both parties to enter negotiations with clarity and strategy, enhancing the potential for a positive outcome.

NEW QUESTION # 223
In general, which of the following is the consequence of a flatter demand curve?

A. Unit price elastic
B. Price inelastic
C. Price elastic
D. Quantity elastic

Answer: C

Explanation:
Elasticity refers to the responsiveness of quantity demanded or quantity supplied to a change in price or another factor.
In microeconomic graphs, elasticity and inelasticity can be shown by the slope of the demand curve. If a demand curve is almost horizontal, then the product pricing can be described as very elastic. If a demand curve is almost vertical, then the product pricing can be described as very inelastic.
The formulae of elasticity:
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NEW QUESTION # 224
Which of the following should be adopted to minimise the conflict between parties in commercial negotiation?

A. Ground beam
B. The rule of law
C. Ground rules
D. Ground zero

Answer: C

Explanation:
:
Ground rules are the basic rules for doing something (Cambridge Dictionary). A negotiation goes more smoothly if ground rules are adopted. Then if something goes awry at a later time, you can point out the ground rule that has been violated. Procurement professional should seek to minimise conflict over process through agreeing 'ground rules' and approach as far as possible with the other party in advance of any negotiation meetings.
There should be two sets of ground rules: 1) ground rules for the negotiations between the two parties and 2) ground rules for the negotiating team itself. This article is about the negotiating team ground rules.
The rule of law is the condition in which all members of society, including its political leaders, accept the authority of the law.
Ground zero describes the point on the Earth's surface closest to a nuclear detonation. In the case of an explosion above the ground, ground zero refers to the point on the ground directly below the nuclear detonation.
The Ground Beam is the beam which is provided usually at the foundation level to support building walls, joists, etc.

NEW QUESTION # 225
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 against 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:

A. Decline the offer and walk away from the negotiation
B. Ask Jose to apply a discount against the price
C. Accept the offer of a discount against the aftercare package
D. Ask Jose to apply the 5% discount against the purchase price

Answer: C

NEW QUESTION # 226
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