Deck 16: Negotiation

Question 1

When the products of a specific supplier are desired to the exclusion of others,the buying company should engage in negotiation instead of bidding.

Answer 1

True

Question 2

In a negotiation,an objective position is the best estimate of what the seller's actual costs plus a fair profit should be.

Answer 2

True

Question 3

Determinates of the seller's bargaining strength include: how badly the seller wants the contract,how certain he or she feels of getting it,and how much time is available to reach agreement on suitable terms.

Answer 3

True

Question 4

The need for world-class negotiation skills and techniques is increasing in parallel with the evolution to SM.

Question 5

A typical collaborative and alliance negotiating technique is to focus on interests,not positions.

Question 6

In a negotiation,a minimum position is developed on the premise that every required seller action will turn out satisfactorily and with minimum cost.

Question 7

A typical collaborative and alliance negotiating technique is to separate the people (negotiators)from the problem (quality,price).

Question 8

Traditional cost objectives in a negotiation include quantity of labor,wage rates,and quantity of materials.

Question 9

A murder board is a powerful preparation activity for an upcoming negotiation.

Question 10

When a long period is required to produce the items purchased a company should engage in negotiation instead of bidding.

Question 11

"Narrowing the Differences" is a stage of face-to-face discussions.

Question 12

Traditional non-cost objectives in a negotiation include all technical aspects of the purchase,buyer-furnished material and equipment and the mode of transportation.

Question 13

"Keeping the Initiative" is a transactional technique of negotiation.

Question 14

Two of the reasons to engage in negotiation instead of bidding are when many variable factors bear not only on price but also on quality and service and when the business risks and costs cannot be predetermined.

Question 15

Among the major steps in the typical negotiation process are the following: preparation,establishment of objectives and face to face discussions

Question 16

"Using Diversions" is a universally applicable technique of negotiation.

Question 17

Negotiation should be used when it is impossible to estimate costs with a high degree of certainty.

Question 18

In a negotiation,a maximum position is developed on the premise a large number of required seller actions will turn out unsatisfactorily and with maximum cost.

Question 19

"Getting to Know You" is a universally applicable technique of negotiation.

Question 20

The objectives of a negotiation with a supplier include considerations such as: quality,a fair and reasonable price and on-time performance.

Question 21

Negotiation should be used instead of bidding when it is possible to estimate costs with a high degree of certainty.

Question 22

"Beating the Clock" is a transactional technique of negotiation.

Question 23

"Using Debate Techniques" is a universally applicable technique of negotiation.

Question 24

Traditional cost objectives in a negotiation include all technical aspects of the purchase,buyer-furnished material and equipment and the mode of transportation.

Question 25

The primary determinate of the seller's bargaining strength is the size of the selling firm.

Question 26

In a negotiation,a maximum position is developed on the premise that every required seller action will turn out satisfactorily.

Question 27

A assassination board is a powerful preparation activity for an upcoming negotiation.

Question 28

When a long period is required to produce the items purchased,a company should engage in bidding instead of negotiation.

Question 29

In a negotiation,a subjective position is the best estimate of what the seller's actual costs plus a fair profit should be.

Question 30

A typical collaborative and alliance negotiating technique is to focus on positions.

Question 31

Two of the reasons to engage in bidding instead of negotiation are when many variable factors bear not only on price but also on quality and service and when the business risks and costs cannot be predetermined.

Question 32

"Narrowing the Price" is a stage of face-to-face discussions.

Question 33

Among the major steps in the typical bidding process are the following: preparation,establishment of objectives and face-to-face discussions

Question 34

When the products of a specific supplier are desired to the exclusion of others,the buying company should engage in bidding instead of negotiation.

Question 35

The need for negotiation skills is decreasing due to the increasing use of intelligent agents.

Question 36

A typical collaborative and alliance negotiating technique is to focus on the people (negotiators)and not the problem (quality,price)in order to create a "warm and fuzzy" atmosphere where the supplier will give concessions away.

Question 37

Among the advantages of online negotiations are: it can help focus on the issues separately from personalities,online communication can free the buyer and supplier from location dependency,and the time for conducting the negotiation is relatively flexible as long as it is not being done live.

Question 38

"Throwing in the Towel" is a universally applicable technique of negotiation that lets the opponent believe that you are giving a concession when in fact the concession is of very little financial consequence.

Question 39

In a negotiation,a minimum position is developed on the premise a large number of required seller actions will turn out unsatisfactorily and therefore force concessions on the part of the seller to reduce prices.

Question 40

Traditional non-cost objectives in a negotiation include quantity of labor,wage rates,and quantity of materials.

Question 41

Which of the following is not one of the major steps in the typical negotiation process?

A) Preparation
B) Establishment of objectives
C) Litigation prevention
D) Face to face discussions

Question 42

Which of the following is usually not one of the objectives of a negotiation with a supplier?

A) Quality
B) Fair and Reasonable Price
C) Cultural values
D) On-time Performance
E) Cooperation

Question 43

Which of the following is not an advantage of online negotiation?

A) Can help focus on the issues separately from personalities
B) Psychological separation makes the termination of the relationship much easier
C) Brainstorming may be more productive
D) Online communication can free the buyer and supplier from location dependency
E) If the negotiation is not being done "live" on the Internet, the time for conducting the negotiations is relatively flexible

Question 44

Which of the following is not one of the universally applicable techniques of negotiation?

A) Getting to Know You
B) Use Diversions
C) Use Negative Statements
D) Be a Good Listener
E) Be Considerate of Sellers

Question 45

Which of the following is a traditional non-cost objective in a negotiation?

A) Liability for claims and damage
B) Quantity of labor
C) Wage rates
D) Quantity of materials
E) Prices of materials

Question 46

Which of the following is a reason to engage in bidding instead of negotiation?

A) When tooling and setup costs represent a small percentage of the supplier's total costs
B) When a long period of time is required to produce the items purchased
C) When production is interrupted frequently because of numerous change orders
D) When a thorough analysis is required to solve a difficult make-or-buy decision
E) When the products of a specific supplier are desired to the exclusion of others

Question 47

Among the disadvantages of online negotiations are: it forces a focus on the issues,it eliminates fun vacations tied into trips to conduct the negotiation,and it does not lock the negotiators into a specific time for conducting the negotiation.

Question 48

Which of the following is not a common stage of face-to-face discussions?

A) Fact Finding
B) Recess
C) Narrowing the Differences
D) Hard Bargaining
E) Mediation

Question 49

Which of the following is not a typical collaborative and alliance negotiating technique?

A) Use diversions
B) Separate the people (negotiators) from the problem (quality, price)
C) Focus on interests, not positions
D) Invent options for mutual gain
E) Insist on using objective criteria

Question 50

Which of the following is not a powerful preparation activity or tool for negotiation presented in the textbook?

A) The Agenda
B) Murder Boards
C) Mock Negotiations
D) Historical Price Data Sheets
E) Draft Agreements

Question 51

Which of the following is not one of the transactional techniques of negotiation?

A) Keep the Initiative
B) Never Give Anything Away
C) Frame the question
D) Use positive statements
E) The Dynamics of a Transactional Negotiation

Question 52

Which of the following is not a condition that demands negotiation?

A) Impossible to estimate costs with a high degree of certainty
B) Price is not the only important variable
C) Purchasing firm anticipates a need to make changes in the specification
D) The market consists of an adequate number of sellers
E) Special tooling of setup costs are major factors

Question 53

Which of the following is not a general guideline for the debriefing that should occur after a negotiation has been completed?

A) The debriefing should be done by managers other than the negotiation team
B) Debriefing must be done in a timely manner, with accurate and timely feedback
C) The debriefing should identify what was done well
D) The debriefing should identify what could be improved upon
E) The debriefing should document lessons learned

Question 54

Which of the following is a traditional non-cost objective in a negotiation?

A) Factory overhead
B) Engineering expense
C) Tooling expense
D) Administrative expense
E) Warranty terms and conditions

Question 55

Which of the following is a reason to engage in bidding instead of negotiation?

A) When any of the five prerequisite criteria for competitive bidding are absent
B) When many variable factors bear not only on price but also on quality and service
C) When the supplier is not involved in the design process
D) When the business risks and costs cannot be predetermined
E) When a customer firm is contracting for a portion of the seller's production capacity

Question 56

Which of the following is a traditional cost objective in a negotiation?

A) All technical aspects of the purchase
B) Wage rates
C) Types of materials and substitutes
D) Buyer-furnished material and equipment
E) The mode of transportation

Question 57

Which of the following is not a determinate of the seller's bargaining strength?

A) How many employees the company has as full time employees
B) How badly the seller wants the contract
C) How certain he or she feels of getting it
D) How much time is available to reach agreement on suitable terms

Question 58

In preparation for a negotiation,the negotiator must research a variety of issues.Which is not one of the issues presented in the textbook?

A) Possess a technical understanding of the item or service
B) Analyze the relative bargaining positions of both parties
C) Have conducted a price or cost analysis
D) Have alternatives ready to threaten the supplier
E) Be aware of cultural nuances

Question 59

Which of the following is not a general guideline when creating and organizing negotiation teams for sourcing supplies from suppliers?

A) The team should be composed of cross-functional members
B) The design engineer should serve as leader of the team
C) An overall strategy is required
D) Roles should be defined
E) Mock negotiations are needed to prepare for the negotiation

Question 60

Which of the following is a traditional cost objective in a negotiation?

A) Payment terms (including discount provisions)
B) F.O.B. point
C) General terms and conditions
D) Tooling expense
E) Details on how a service is to be performed

Question 61

Which of the following cannot be interpreted as a drawback to online negotiation?

A) It is far easier to say 'no' in writing
B) Psychological separation makes the termination of the relationship much easier
C) Online negotiators are likely to feel a need to be more persuasive - more convincing
D) A lack of nonverbal cues forces careful consideration of the impact of each word
E) Can help focus on the issues separately from personalities

Question 62

Which of the following generalizations is usually true when negotiating on price alone?

A) Price analysis negotiation time is longer
B) Support of technical specialists is usually needed
C) Price comparison data are difficult to obtain
D) The supplier will usually not offer to inform you of hidden costs beyond price
E) Trend comparison data are difficult to obtain

Question 63

Which of the following is generally not a characteristic of a successful negotiator?

A) Successful negotiators engage in reciprocity as much as possible
B) Successful negotiators realize that specialized training and practice are required to become an effective negotiator
C) Successful negotiators enter into negotiations with more demanding negotiating objectives than their counterparts
D) Successful negotiators are pragmatic and flexible in their capability to deal with different negotiation techniques from "hardball" to "collaborative"
E) All are included, or are destined to become included, among an organization's most highly valued professionals

Question 64

Which of the following generalizations about face-to-face negotiations are for the most part true?

A) The more important the issue, the more likely it is that it will be negotiated face-to-face
B) The less politically sensitive the issue, the more likely it is that it will be negotiated face-to-face
C) If the topic involves issues of firm sensitivity, such as trade secrets or core competencies, the negotiation is more likely to take place face-to-face
D) Buyer-supplier relationships will be perceived as more distant, the more online communication and negotiation are used
E) Less formal planning will occur prior to online negotiations than for those conducted face-to-face