A procurement professional is preparing for a negotiation with supplier. She is setting targets for price which her company is seeking to achieve. Which of the following acronyms can help her identify limits before engaging in the negotiation?
Answer(s): A
MIL criteria indicate 3 limits that negotiator should establish:M - Must achieve: minimum target/maximum you can concede on this point; the mandatory requirement or fall back positionI - Intend to achieve: realistic target you are aiming for on this point L Like to achieve: stretch target to achieve on this point.PPCA is purchase cost analysisTIMWOOD indicates 7 types of waste in Lean principlesThe RAQSCI model is a mnemonic summary of a business model used to define and structure business requirements
Which of the following should be done when undertaking a reflection activity on negotiation? Select TWO that apply.
Answer(s): A,E
Giving positive group and individual feedback is easy, as is self-congratulation and, in many cases, it is hoped, this will be an accurate reflection on actual performance. When it comes to developmental or difficult feedback, it is only natural to want to move on and not reflect on the negative or developmental points, or why a negotiation did not achieve its objectives. But this is a mistake. The best learning opportunities come from reflection on what could be done better, and this can be achieved without blame, threat or condemnation. Everyone and every team will make mistakes and/or have areas where they could have improved. Clearly, if every reflection session concludes that an individual or team keeps making the same mistake, then there is a case to change roles or consider alternative approaches.About Dos and Don'ts of reflection, you can refer here: https://offices.depaul.edu/human- resources/employee-relations/Documents/Self%20Assesement.pdf
Which of the following is the definition of safety margin?
As a financial metric, the margin of safety (safety margin) is equal to the difference between current or forecasted sales and sales at the break-even point. The margin of safety is sometimes reported as a ratio, in which the aforementioned formula is divided by current or forecasted sales to yield a percentage value. The figure is used in both break-even analysis and forecasting to inform a firm's management of the existing cushion in actual sales or budgeted sales before the firm would incur a loss.This is a question that a student met in her actual exam. The margin of safety is not even mentioned in the CIPS study guide.
Which of the following can help both parties to break the vicious cycle of blame when a relationship needs repairing? Select TWO that apply.
Answer(s): A,C
In order to break vicious cycle of blame, procurement will need to use their negotiation and conflict management skills, adopting a collaborative and integrative approach. Your first action should be to establish the facts that led to the situation where the relationship broke down. Most day-to-day relationship between buying organisations and suppliers do not of course involve procurement staff, so you will need to consult with your business partners internally to establish their point of view of where the issue and sources of conflict are. You should also contact the supplier and get their side of the story - this is particularly to when you have previously identified the supplier as critical or otherwise important to your operations. Ideally you will be able to apply principled negotiation here, separating the people from the issue, focusing on interests and not positions, and then looking for options of mutual benefits.
An experienced procurement professional is developing strategies for forthcoming negotiations with her key supplier. To avoid negotiation deadlocks, she identifies the reasons why negotiations could fail. Which of the following are most likely to be reasons for negotiation failures? Select TWO that apply.
It has been said that most negotiations are won (or lost) at the preparation stage. Success in a negotiation cannot be claimed unless you can refer back to your objectives and show how you have achieve them. In broad terms, negotiation plans/strategies involve 4 key activities:1. Developing and prioritising your objectives and limits2. Seeking to understand TOP's objectives3. Developing concession plans4. Planning the resources and logistics required and agreeing team roles. Questions to gain an understanding of why a negotiation failed Did we collect and make effective use of all information available when preparing for the negotiation?Did we set objectives for the negotiation that were stretching and achievable and established MILobjectives?Did we determine a strategy for the negotiation?Did the other party understand our needs correctly?Were we aware of the underlying interests of the other party? Were our proposals convincing enough for acceptance by the other party? Did we explore different variables in the negotiation? Did we fully understand all proposals?Did we give any unplanned concessions and did we check the importance of these? Did we focus on common interests?Did we ask a range of questions?Did we get answers to all our questions?Could we answer all the questions addressed to us in a proper and positive way?Did we summarise effectively?Did we use different methods of persuasion in the negotiations? Which tactics did we use and what effect did they have? Did our negotiating team work well as a team?Did we help to create a co-operative atmosphere
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