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L4M5 Exam Dumps : Commercial Negotiation

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Commercial Negotiation Questions and Answers

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Question 1

The only procurement risk inherent in a distributive negotiation approach is the potential loss in the outcome. Is this statement TRUE?

Options:

A.

Yes, because in any commercial negotiation there is always a winner and a loser

B.

Yes, and that is why procurement must seek to engage with suppliers that have less bargaining power

C.

No, both negotiating parties are always committed to ensuring that gains are distributed equally between them

D.

No, there is a chance of reaching an impasse among other outcomes to such negotiations

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Question 2

Freefields Housing Authority (FHA) is a housing provider that has outsourced a range of management services using fixed-price long-term contracts. FHA’s regular supplier credit reviews have identified that some key outsourced service suppliers are at risk of insolvency due to high inflation rates observed in the macroeconomic climate. Which of the following actions would enable FHA to reduce this risk for the lifetime of the affected contracts?

Options:

A.

Allow affected suppliers to review and resubmit their fixed costs

B.

Introduce indexation of contracts linked to the Consumer Prices Index

C.

End the contracts and procure the services

D.

Offer advance payment terms to the affected suppliers

Question 3

Which of the following is definition of elasticity of demand in microeconomics?

Options:

A.

The percentage change in the quantity demanded divided by the percentage change in income

B.

The percentage change in price of a good divided by the percentage change in the quantity demanded of that good.

C.

The percentage change in the quantity demanded of a good divided by the percentage change in the price of that good

D.

The percentage change in income divided by the percentage change in the quantity demanded

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