CIPS Updated L4M5 Exam Questions and Answers by cordelia

In a negotiation for a new contract, the supplier suggests the buyer to shorten payment period from 45 days to 15 days because they are investing in new facilities to expand the supply capacity. The buyer replies that she can only sign off the deal if the payment period is 30 days or more since it often takes at least 30 days for her company to collect the payment from customers. A permission from senior management is required for this suggestion. In order to ensure that supplier understands the matter, she reiterates it throughout the meeting. Which tactics is she using?

1. Outrageous initial demand

2. Salami slicing

3. Lack of authority

4. Broken record

Freefields Housing Authority (FHA) is a housing provider that has outsourced a range of management services using fixed-price long-term contracts. FHA’s regular supplier credit reviews have identified that some key outsourced service suppliers are at risk of insolvency due to high inflation rates observed in the macroeconomic climate. Which of the following actions would enable FHA to reduce this risk for the lifetime of the affected contracts?

Which of the following is the best description of direct cost?

A garden furniture supplier who is currently in negotiations for a high-value contract has offered the procurement manager a visit to their site. The supplier suggests that during this visit, they can undertake the contract negotiation. What would be an appropriate response from the procurement manager?