[May 07, 2022] Get to the Top with L4M5 Practice Exam Questions [Q16-Q38]

NEW QUESTION 16
According French and Raven’s base model, which of the following are sources of personal power that can be used in commercial negotiation? Select THREE that apply.

Purchasing spend power

Expert power

Competitive power

Trademark power

Coercive power

Legitimate power

NEW QUESTION 17
A procurement professional is negotiating with a supplier on cleaning service. She realises that there are huge cost-saving opportunities if the supplier agrees to reduce its mark-up and unnecessary employee benefits.
Supplier’s mark-up and employee benefits are examples of which of the following?

Spend waterfall

Spend cube

Spend tree

Addressable spend

NEW QUESTION 18
Stalemate is morelikely to happen if both parties trade more variables in a commercial negotiation. Is this assumption true?

No, because the party who offers more variables will have lower bargaining power

Yes, because the negotiation will last endlessly if there aretoo many variables

No, because more variables will facilitate more possible negotiated outcomes

Yes, because more variables will cause more conflicts of interest

NEW QUESTION 19
Which of the following are examples ofnon-verbal negotiation? Select THREE that apply.

Asking the supplier to repeat their proposal

Getting messages across with facial expressions

/ Speaking softly with long pauses

Communicating with the other party by using gestures

Explaining to the supplier about the scope of the project

Using the body language

NEW QUESTION 20
Which of the following is NOT a barrier to entry in amonopolized market?

The costs of production make a single producer more efficient than a large number of producers

A single firm is very large

The government gives a single firm the exclusive right to produce some good

A key resource is owned by a single firm

Monopolies exist in many markets in real life for very different reasons:
Ownership of a Key Resource: When one company exerts sole control over a resource that is necessary for the production of a specific product,the market may become a monopoly. For example, the only medication deemed acceptable to treat a disease comes from a particular ingredient X, and knowledge of this ingredient X is owned by a single family owned company. The company can, therefore, be saidto have a monopoly over ingredient X that is needed to cure the disease because it is the only company that can produce a product deemed acceptable.
Government Franchise: In certain instances, a monopoly may be explicitly created by the government if it grants a single company, whether private or government-owned, the right to conduct business in a particular market. For example, when a national railways transportation service is created by the government, in most cases they are granted a monopoly on the operation of passenger trains in the country. As a result, other firms are only able to offer passenger train services with the cooperation and/or permission of the government-owned provider.
Intellectual Property Protection: Extending intellectual propertyprotection to a company in the form of patents and copyrights is yet another way in which monopolies are created. When a government does this, it is in fact giving a single company an exclusive right to provide a particular product / service to the market. Patents and copyrights work in providing owners of intellectual property with the right to act as an exclusive provider of a new product for a specific length of time. This creates a temporary monopoly in the market with regards to new products and services.
Natural Monopoly: A market may also become a monopoly simply because it may be more cost-effective for one company to serve the whole market than to have several smaller firms in competition with one another. A company with virtually unlimited economies of scale is referred to as a natural monopoly. Such firms become monopolies due to their position and size, which makes it impossible for new entrants in the market to compete price-wise. Natural monopolies are common in industries with high fixed costsand low marginal costs of operation such as providers of television, telephone, and internet services.
In this question, ‘A single firm is very large’ is not enough to tell whether this market is monopolistic.

NEW QUESTION 21
Which of the following will help to indicate personality preferences in four dimensions?

Thomas-Kilmann Conflict Resolution model

Intelligence quotient

Mill’s RESPECT mnemonic

Myers-Briggs Type Indicator

NEW QUESTION 22
Which of the following is the true statement?

External stakeholders such as suppliers can largely influence an organisation’s procurement negotiations

Internal stakeholder support will be important for both negotiation and contract performance

All connected stakeholders have a low level of impact on procurement negotiations

Commercial negotiation objectives should be driven by just the instincts of procurement

NEW QUESTION 23
Which of the following are rules of attentive listening? Select TWO that apply.

Prepare for whatto say next

React to the person who is speaking

Listen deliberately

Only focus on verbal cues

Do not interrupt when the other party is speaking

NEW QUESTION 24
Which ofthe following is a true statement regarding macroeconomic factors and their potential impact on negotiations?

Macroeconomic factors always directly influence the negotiations

Expectations on macroeconomic prospect are always correct

Changes in macroeconomic factors may affect businesses and individuals differently

Macroeconomic factors cannot be influenced by anyone’s expectation or sentiment

NEW QUESTION 25
The buyer’s bargaining power tends to berelatively higher than supplier’s bargaining power in which of the following circumstances?

The buyer does not have the option to move to an alternative supplier

The buyer’s spend takes up a small proportion of supplier revenue

The buyer demand isso urgent that it can’t be postponed

The buyer is large in size relative to its suppliers

NEW QUESTION 26
Should a buyer use closed questions in a negotiation?

Yes, because closed questions help to reconfirm certain facts

Yes, because they urge the supplier to provide more detailedExplanation::

No, the buyer should maximise the use of open questions

No, supplier will consider closed questions as provocation

NEW QUESTION 27
Which of the following should be done by the procurement team at the closing stage of a negotiation? Select TWO that apply.

Gloat publicly about the deal

Seek agreement in principle if TOP does not have the final authority

Tell TOP that they could have got a better deal

Accept ambiguity or uncertainty

Leave the meeting as soon as possible

NEW QUESTION 28
Which type of power is considered the opposite of coercive power?

Referent power

Informational power

Reward power

Expert power

NEW QUESTION 29
A good negotiator invests time in understanding the needs of the individuals in a negotiation. Is this statement true?

Yes, because individuals’ needs always unify with their own organisation’s needs and wants

No, becausenegotiator should attempt to satisfy the needs of the other organisation only

No, because satisfying individual needs will lead to conflict of interest and unethical practices

Yes, because individual needs largely influence the outcomes of the negotiation

NEW QUESTION 30
IHL has beensupplying to XYZ Ltd for months. XYZ Ltd procurement manager Diana realises that the IHL’s input prices are dropping and this is a good time to re-negotiate the price of the contract. She invites IHL representative to XYZ headquarter to make a bargain on the current price. At the opening stage of the negotiation, Diana requests a 10% reduction in price with an increase in volume purchased.
Is Diana’s action appropriate in the opening phase?

Yes, because the negotiation should be done as quick as possible

Yes, because Diana’s proposal is a fair trade for both parties

No, because Diana should state exactly the increasing quantity

No, because Diana has put the markers down too soon

NEW QUESTION 31
Which of the following can help both parties to break the vicious cycle of blame when a relationship needs repairing? Select TWO that apply.

Both parties understand each other’s goals

Focusing onpositions

Conflict management skills

Constant shadowing and oversights

Emotional-based assessment

NEW QUESTION 32
A public agency opens a tendering process for a road building project that lasts approximately 1 year. They post theirrequirements on public journal and receive some interests. After conducting due diligence process and selecting the lowest bidder, the project commences. However, the supplier complains that price of material increases because of a shortage of supply, thenthey demands an 5% uptick in contract value. The agency investigates the increment and sees that there is indeed a fluctuation in prices of supplier’s input. They are likely to accept the proposal, but they are also concerned that supplier may demand more. To avoid making another concession with the supplier, which of the following should be a priority action of the agency?

Disapprove supplier’s demands until they finish the project

Seek approval from higher authority

Document a contract variationthat only allows another concession if some specific conditions arise

Postpone the decision making until the budget is ready

NEW QUESTION 33
Which of the following isthe definition of safety margin?

The difference between current or forecasted sales and sales at the break-even point

The amount of revenue that remains after subtracting costs directly associated with production

The production level at which total revenues for a product equal total expenses

The incremental money generated for each product/unit sold after deducting the variable costs

NEW QUESTION 34
Which of the following will shift the supply curve to the right?

Changes in customer taste

New disruptive technology

Decreased market price of substitute products

Increasedcustomers’ disposable income

NEW QUESTION 35
During a negotiation, the supplier requests for payment term shortened to 45days from 60 days. Seeing that this proposal lies within the concession plan, the procurement manager asks for 5% discount in return. Is that right thing to do?

Yes, the procurement manager should keep that 5% for himself because that amount is a fair compensation for his effort

No, it is unethical to exploit the weakness of the other party

No, procurement should insist the payment term remains 60 days

Yes, since procurement manager has his own cost savings target to achieve and he should make use of supplier’s financial status

NEW QUESTION 36
Which of the following statements about oligopoly isincorrect?

A few firms play an important role in the sale of a product

Oligopolistic firms recognize their interdependence

One firm’s behaviour is a function of what its rivals do

Prices in oligopoly are predicted to fluctuate widely and frequently

NEW QUESTION 37
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

NEW QUESTION 38
End users are the only stakeholders that are involved in the preparation of a negotiation. Is this statement true?

Yes, because end-users have greaterexpert power

Yes, because only end-users understand their demand

No, because end-users are external stakeholders

No, because budget holders also play an important role

[May 07, 2022] Get to the Top with L4M5 Practice Exam Questions [Q16-Q38]

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