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L4M5 & 6 MCQ > College MCQ - L4M5 > Flashcards

College MCQ - L4M5 Flashcards

(72 cards)

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1
Q

What are the 4 fundamentals of principled negotiations?

A
  1. People
  2. Interests
  3. Options
  4. Criteria
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2
Q

Name the 11 step formula proposed in the art of the deal?

A
  1. Think big
  2. Protect the downside and the upside will take care of itself
  3. Maximise your options
  4. Know your market
  5. Use your leverage
  6. Enhance your location
  7. Get the word out
  8. Fight back
  9. Deliver the goods
  10. Contain the cost
  11. Have fun
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3
Q

What is Integrative approach?

A

Approach to negotiation used when the interested parties are attempting to create more of something of value to share, also known as collaborative approach or ‘win-win’.

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4
Q

What is the Distributive approach?

A

Approach to negotiation used when the interested parties are attempting to divide something up or distribute something of value, also known as zero-sum approach or ‘win-lose’

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5
Q

What are the sources of personal power?

A
  1. Reward
  2. Referent
  3. Expert
  4. Coercive
  5. Informational
  6. Legitimate
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6
Q

What does BATNA mean and stand for?

A

Best alternative to a negotiated agreement - Often called plan B, a negotiation should always have a back up position in case no deal can be agreed.

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7
Q

There are 3 levels to consider when considering the relative power of buyers and suppliers. What are the 3 levels?

A
  1. Level 1 - Macro Environment - STEEPLED analysis. - Understand the wider forces that influence the balance of power.
  2. Level 2 - Micro Environment (industry structure) - Porter’s Five Forces analysis.
  3. Level 3 - One-tone buyer/suppliers dynamics.
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8
Q

When setting trading limits, you should set MIL criteria.What does MIL stand for?

A

Must. Intend. like to achieve.

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9
Q

What is not a source of source of personal power?

Referent
Monetary
Informational

A

Monetary

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10
Q

What does ZOPA stand for?

A

Zone of possible agreement

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11
Q

Which if these is NOT a conflict management style?

Autocratic
Compromising
Adopting

A

Autocratic

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12
Q

How do you calculate Gross Profit?

A

Sales revenue - Cost of sales

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13
Q

Penetration pricing is…

A

Characterised by price reductions to increase volume, followed by steady price increases. It can be seen when attempting to enter a new market or gain market share. It can often be loss leading to begin with.

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14
Q

In Microeconomics, supply can be describes as:

A

The quantity of goods and services offered to the market by producers

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15
Q

The price of a product can be describes as elastic if…

A

A big change in demand leads to big price increases

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16
Q

The bargaining mix involves?

A

Identifying tradeable and setting your limits

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17
Q

What are the 4 main phases of a negotiation?

A

Open, Test, Move, Agree and Close

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18
Q

What does the open phase of the negotiation meeting do?

A

Sets the tone for the meeting

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19
Q

Which phase of the negotiation allows parties to establish a ZOPA?

A

Test phase

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20
Q

Persuasion in a negotiation means?

A

Pushing on TOP so that they accept their change of attitude or behaviour as a result of your actions.

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21
Q

The move phase in negotiations can be split into 2 stages, these are?

A

Proposing and bargaining

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22
Q

According to Prof. Fiona Dent, what style is regarded as push methods

A

Directive

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23
Q

According to Prof. Fiona Dent, what style is regarded as pull method?

A

Collaborative

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24
Q

What tactics would be regarded as ‘Good cop/bad cop ploy?

A

TOP warms to, and is more likely to confess to someone sympathetic, in the absence of the less sympathetic person.

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25
When considering The Mehrabian Formula, what % is focused on your body language and facial expression (non-verbal communication)?
55%
26
What is an example of a BATNA? Best alternative to a negotiated agreement?
A contingency supplier
27
Distributive negotiations are most typically associated with which type of items?
Routine
28
Mark up vs Margin
Mark up - Is the percentage increase on a product’s cost price to determine the selling price Margin - (or gross profit margin) - is what’s left over after sales are deducted from the cost of goods sold, representing the profit.
29
The supplier’s break-even point is reached when its revenues exceed which of the following? 1. Opportunity costs 2. Total fixed costs 3. Equity costs 4. Variable production costs
B - 2 and 4
30
Are insurance premiums fixed costs?
YES
31
What are features of a perfect competition?
1. There are many buyers and sellers of the same product or service 2. The market information is symmetrical
32
What is a consequence of a flatter demand curve?
Price elastic
33
What is the consequence of a demand curve being almost vertical?
The product pricing can be described as very inelastic.
34
Under EU public procurement directives, all public sector bodies must abide by certain rules when they procure gooods and services over a threshold value. These rules are codified under 5 procurement procedures:
1. Open Procedure 2. Restricted Procedure 3. Competitive Dialogue 4. Competitive Procedure with Negotiation 5. Innovation Partnerships
35
What are some trust destroying behaviours?
1. Rumours of partnership or relationship breaking down 2. Emotion-based assessment of performance 3. Avoiding accountability, passing the blame to others 4. General mood - resentment, distrust, frustration, etc
36
If the value of the British Pound in other currencies is strong, what is most likely to occur?
The price of UK Products abroad in foreign currency will rise
37
What are some macro factors that may influence the balance of power in commercial negotiations?
1. Economic growth rates 2. Disruptive technologies 3. Sustainability of natural resources
38
Information generated through Purchase Price Cost Analysis can be useful to the purchaser, by helping to identify which of the following costs relating to the supplier? Budgeted costs Profit External Costs Market costs Material costs Depreciation on equipment
Distribution costs Overhead costs Profit Material costs Depreciation on equipment Process and labour costs
39
What do you know about Oligopoly?
Prices in oligopoly are predicted to fluctuate widely and frequently
40
The difference between Mark up and Margin?????
Margin is the percentage of sales that is profit, while mark up is the percentage of cost that is added to get the selling price.
41
Spend concentration may take many forms as following:
Vendor base reduction Volume pooling Volume redistribution Volume consolidation across categories Standardisation and harmonisation of specifications Forming purchasing consortia
42
Problems may occur on the International scale with such things as:
The importance of extending courtesy between cultures The importance of timescales The use of negotiating ploys The scene of ‘fair play’ The use and interpretation of body language The role of woman in negotiations The importance of status The role of conflict Standards of dress and deportment and the readiness to ignore or uphold contract terms and conditions
43
Are the following Macro or Micro factors: 1. Regulations on health and safety 2. Digitalisation of medicine
Macro Factors - STEEPLE
44
Supplier’s mark-up and employee benefits are examples of?
Addressable spend
45
What is BATNA?
Best alternative to a negotiated agreement (BATNA) - Is the plan B or back-up plan in the event of a ‘walk away’. In case of no deal, buyer (or supplier) may switch to this option.
46
What is STEEPLE?
Offers an overview of various external fields. It is an acronym for Social, Technological, Economic, Environmental, Political, Legal and Ethical.
47
What is ZOPA?
Zone of potential agreement (ZOPA) - is considered an area where two or more negotiating parties may find common ground. It is this area where parties will often compromise and strike a deal. In order for negotiating parties to find a settlement or reach an agreement, they must work towards a common goal and seek an area that incorporates at least some of each party’s ideas.
48
What is PESTLE?
Political, Economic, Social, Technological, Legal, Environmental. It gives a bird’s eye view of the whole environment from many different angles that one wants to check and keep a track of while contemplating on a certain idea/plan.
49
What would cause a demand curve for a good to be price inelastic?
The necessary goods
50
Marginal costing?
Marginal costing is a type of costing method that involves calculating the cost of producing one additional unit of output.
51
A senior buyer analyses the supply market and he realises that his organisation is treated as exploit according to supplier’s perspective model. What does he need to do?
Pay the suppliers on time
52
What are 2 sources of personal power in the commercial negotiation?
1. Informational Power 2. Expert Power
53
What is the purpose of using stakeholder support level scale?
To estimate the gap and the progress towards desired levels of support
54
Why is emotional intelligence important in a negotiation?
Buyer can relate to the supplier’s issues
55
What should be used in negotiation if both parties want to communicate verbally and non-verbally without having to meet face-to-face?
Web conferencing
56
What are 2 factors that might shift the demand curve for a consumer goods to the right?
Prices of complementary goods decrease Customer’s expectations of higher prices in the future
57
One difference between perfect competition and monopolistic competition is that?
Firms in monopolistic competition face a downward-sloping demand curve
58
What is the formula for allocating fixed manufacturing overhead costs to each unit of a product under absorption costing method?
Fixed manufacturing overhead per unit = Total fixed manufacturing overhead/Number of units produced.
59
What are 2 sources of conflict that can emerge from the content of commercial negotiations?
Contract governing law Payment terms
60
What is dynamic pricing?
Dynamic is a pricing strategy that involves changing and adjusting the price of goods and services in response to market factors. Some of these factors include demand, supply, competition, seasonality, customer preferences, etc.
61
What is a skimming strategy?
This strategy typically involves setting high prices initially when a new, innovative product is introduced to the market. Overtime, as this item becomes more popular and there is more competition, this price will decrease.
62
Why would a supplier charge its customer higher prices after it has reached the break-even point?
Supplier may need to open new facilities to meet increasing customer’s demand.
63
What is considered a weakness of a ‘dealer’ style negotiator?
May shift position quickly
64
What shifts the demand curve to the right? - Factors that increase supply
Favourable natural conditions for production A fall in input prices Improved technology Lower product taxes/less costly regulations
65
What factors shift the supply curve to the left? - Factors that decrease supply.
Poor natural conditions for production A rise in input prices Improved A decline in technology (not common) Higher product taxes/more costly regulations
66
Intangible values created by trust in business relationships?
Increasing response time to request More focus on core business Positive feedbacks from customers
67
From the principled point of view about negotiation environment, is this a true statement? Home advantage should not be exploited to win a temporary advantage
Yes
68
Katie is considering negotiating variable pricing for the cleaning contract for the duration of 12 months. Would this be right to do?
No, its hard to budget for a year because of financial uncertainty
69
What does active listening in negotiation look like?
Hearing and interpreting
70
Why is it important for a buyer to understand the macroeconomic conditions of the supplier’s country before negotiating with them?
It can help the buyer assess the supplier’s costs, risks and opportunities
71
Name as many macro factors as you can that may have influence to the commercial negotiation?
Economy growth rate Inflation rates Interest rates Currency exchange rates Unemployment rate Protectionism
72
Understanding supplier’s mark-up and margin can provide procurement professional a comprehensive insight into supplier’s net profits. Is this statement true?
No, because mark-up and margin inform little about supplier’s net profits

L4M5 & 6 MCQ (5 decks)

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