Question 1

Which of the following isthe definition of safety margin?

Options :

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

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

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

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

Answer: A

Question 2

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

Options :

A : Gloat publicly about the deal

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

C : Tell TOP that they could have got a better deal

D : Accept ambiguity or uncertainty

E : Leave the meeting as soon as possible

Answer: B,E

Question 3

When implementing value analysis or value engineering, which of the following acronyms reminds both buyer and supplier of ideas on removal, substitution and design-out of cost elements?

Options :

A : SMART

B : STOPS WASTE

C : OWN-IT

D : SAMOA

Answer: B

Question 4

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

Options :

A : Yes, because individuals' needs always unify with their own organisation-s needs and wants

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

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

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

Answer: D

Question 5

Which of the following is most likely to be a reason why a supplier charges its customer higher price after it has reached the break-even point?

Options :

A : Supplier may need to open new facilities to meet increasing customer-s demand

B : Supplier may have high fixed cost - variable cost ratio

C : Supplier may want to encourage buyer-s demand

D : The supplier may have reached economy of scale

Answer: A

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