APP Negotiation & Supplier Management 3

Question 1

A supplier consistently delivers on time but has rising quality defect rates. What is the FIRST step a procurement team should take?

Accepted Answer

Issue a formal corrective action request (CAR)

Answer

A corrective action request formally documents the problem and requires the supplier to identify root cause and implement fixes.

Question 2

The 'Zone of Possible Agreement' (ZOPA) in negotiation refers to:

Accepted Answer

The range between each party's reservation price where a deal can occur

Answer

ZOPA is the overlap between the buyer's maximum willingness to pay and the seller's minimum acceptable price.

Question 3

Which document formally defines the expectations, metrics, and remedies governing a supplier's ongoing performance?

Accepted Answer

Service Level Agreement (SLA)

Answer

An SLA specifies measurable performance standards and outlines consequences or remedies for non-compliance.

Question 4

A buyer uses the 'nibble' tactic at the end of a negotiation. What does this involve?

Accepted Answer

Requesting a small additional concession after the main deal is agreed

Answer

The nibble involves asking for one last small add-on (free shipping, extended warranty) after both parties believe terms are settled.

Question 5

Early Supplier Involvement (ESI) in new product development primarily benefits purchasing by:

Accepted Answer

Allowing suppliers to provide design input that reduces cost and improves manufacturability

Answer

ESI brings supplier expertise into the design phase, where changes are cheapest and can prevent costly redesigns later.

(APP) Accredited Purchasing Practitioner Certification Practice Test