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CIPS Commercial Negotiation Sample Questions (Q248-Q253):

NEW QUESTION # 248
Which of the following are most likely to harm trust between buyer and supplier in a commercial relationship? Select TWO that apply.

A. Subjective assessment of performance
B. Avoidance of submitting important documentations
C. Reduced response time during contract performance
D. Resolving some conditions that would otherwise have them competing for resources
E. Exploring a disagreement to learn from each other's insights

Answer: A,B

Explanation:
Trust-destroying behaviours:
- Rumours of partnership or relationship breaking down
- Emotion-based assessment of performance
- Avoiding accountability, passing the blame to others
- General mood - resentment, distrust, frustration, etc
LO 1, AC 1.4

NEW QUESTION # 249
Which of the following are typical characteristics of activity-based costing (ABC) method? Select TWO that apply.

A. Limited understanding of true costs incurred
B. Costs are allocated based on volume
C. ABC has tended to over cost products on long runs and under cost those on short runs
D. ABC provides the information required to take action and realise improvements
E. Variable and all related overhead expenses are specifically assigned to a business activity

Answer: D,E

Explanation:
:
Activity-based costing is an alternative approach to traditional absorption costing. The characteristics of these two methods are illustrated in the graph below:
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NEW QUESTION # 250
A skilled negotiator will use a range of questioning techniques in a negotiation. If they wished to explore options with the other party without making any formal commitment, which type of question style would they use?

A. Reflective
B. Hypothetical
C. Leading
D. Multiple

Answer: B

Explanation:
Reference: CIPS L4M5 Study Guide, Section 3.2 - The Negotiation Process

NEW QUESTION # 251
In a commercial negotiation, a procurement professional believe that the larger the order quantity from buyer, the lower the supplier's average costs. Is this assumption true?

A. No, because supplier's average costs will rise as the buyer's demand increases
B. No, because the supplier may need to invest in new facility to meet buyer's demand
C. Yes, because larger order quantity will always enable the supplier to reach its economy of scale
D. Yes, because larger order quantity will bring a considerable profit to supplier

Answer: B

Explanation:
In some markets, suppliers experience peaks and troughs in demand and so buyers can increase their leverage through developing an understanding of how busy their vendor are at particular time during the year or business cycle and targetting at quieter period. Similarly, if a buyer can develop an understanding of supplier capacity and to what extent have they covered their fixed cost, they may be able to target suppliers when their average costs are likely to be lowest. Vendor's average costs will be higher at low and high capacity utilisation.
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NEW QUESTION # 252
Where can we find the data on macroeconomics?
1. From trade journal
2. From supplier's marketing catalogue
3. From stock exchange market
4. From government's statistics

A. 1 and 3 only
B. 2 and 4 only
C. 3 and 4 only
D. 1 and 2 only

Answer: C

Explanation:
Macroeconomic indicators are statistics or data readings that reflect the economic circumstances of a particular country, region or sector. They are used by analysts and governments to assess the current and future health of the economy and financial markets.
Macroeconomic indicators will vary in their meaning and the impact that they have on the economy, but broadly speaking there are two main types of indicator.
- Leading indicators, which forecast where an economy might be heading. They are often used by governments to implement policies because they represent the first phase of a new economic cycle. These include the yield curve, interest rates and share prices.
- Lagging indicators, which reflect an economy's historical performance and only change after a trend has been established. They are used to confirm a trend is underway. These include gross domestic product (GDP), inflation and employment figures.
There is also the category of coincident indicators, but these are generally grouped in with lagging indicators as they either happen at the same time or after an economic shift.
The best macroeconomic indicator to watch will heavily depend on your personal preferences, what positions you are taking and which country your portfolio is focused on. However, there are some very common indicators that most traders and investors will keep an eye on.
For simplicity's sake, we have split these out into leading and lagging indicators.
Top leading indicators:
1. The stock market
2. House prices
3. Bond yields
4. Production and manufacturing statistics
5. Retail sales
6. Interest rates
Top lagging indicators:
1. GDP growth rates
2. The Consumer Price Index (CPI) and inflation
3. Currency strength and stability
4. Labour market statistics
5. Commodity prices
A procurement professional may find stock market data from the security exchange, while most lagging indicators (such as GDP, CPI, unemployment rate, currency and inflation rate, etc) can be found from government statistics data.
Reference:
- CIPS study guide page 117-118
- What Are the Key Macroeconomic Indicators?| IG EN
LO 2, AC 2.2

NEW QUESTION # 253
......

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