Which of the following may help the procurement professional increase expert power in commercial negotiation? Select TWO that apply.
Answer(s): C,E
Expert power is based on a person's high levels of skill and knowledge, formal training, qualifications and experience in a particular procurement category would give someone expert status and mean that in negotiation their voice is listened to as a more objective, informed knowledge leader. Expert power is based on facts, knowledge, research, insight and study. Legitimate power comes from rules, formal authority, organisation rank, staff rate or official position held.Reward power comes from one person's ability to compensate or reward another for compliance. Referent power stems from their personality, way of engaging with others and habit of acting in a way that is in line with a strong set of values and principles.
In which of the following persuasion methods, the influencer uses logics and objective reasons to persuade the others to buy into influencer's ideas?
Answer(s): A
There are two major persuasion methods: 'push' and 'pull'. Persuasion can be defined as encouraging someone to do something that you want them to do for you. Persuasion is reasoning with someone so that they will believe or do something they might not otherwise do. Persuasion can be considered as 'pushing' on TOP so that they can accept the change in attitude or behaviour as a result of your actions.Influence is the ability to affect the manner of thinking of another. Influence can be considered as pulling on TOP so that you achieve the same result, but TOP feels they have changed their attitude or behaviour as a result of their reflection and thinking, and not your direct actions. There are multiple variables to consider when choosing between 'push' and 'pull'. Professor Fiona Dent of Ashridge Business School proposes situations when each style might be most appropriate, breaking down push into 'directive' and 'reasoning' and 'pull' into 'collaborative' and 'visionary':Table Description automatically generatedText Description automatically generatedUsing logical and objective reasons is one of the typical characteristics of persuasion reasoning method.
At the first stage of CIPS Procurement and Supply Cycle (Understand need), which of the following is the most important duty of procurement professional?
At the first stage of CIPS Procurement and Supply Cycle (Understand need and develop a high-level specification), procurement professional mainly negotiate with internal stakeholders. They have a duty to proportionately and constructively challenge specification if there's genuine doubt over the need or how the need is expressed. This is called demand management. Their first duty is to the organisation's treasury, not to functional managers.Demand management including: negotiation/challenge between procurement and internal stakeholders over the need/requirement/specification. Remember that in any process or product, the greatest opportunity for cost reduction is at the design stage.
If the price of a good is above the equilibrium price, which of the following will happen?
Answer(s): D
In microeconomics, equilibrium price is determined when the quantity demanded is equal to the quantity supplied at equilibrium price in a market, there will be no shortages and no surpluses. If we combine our supply and demand curves on one graph, the point at which they converge determines the equilibrium price. If the price is set above this price and you read across the graph you will see the supply excess demand and there will be a surplus. In order to reduce this surplus, the price will need to fall. The scenario is illustrated in the graph below:Chart, line chart Description automatically generated
How contribution is calculated in break-even analysis?
Answer(s): B
Contribution = Price - Variable costBreak-even point (volume) = Fixed cost/Contribution
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