CCNP Pricing Analysis 4

Question 1

A 'price spike' analysis is most useful when a buyer wants to:

Accepted Answer

Identify sudden, unexplained increases in a supplier's price history

Answer

Price spike analysis flags anomalous price jumps in historical data that may indicate unjustified increases or data errors.

Question 2

Which cost type is defined as a cost that can be identified specifically with a final cost objective?

Accepted Answer

Direct cost

Answer

A direct cost is attributable to a specific contract, project, or final cost objective without allocation through an intermediate pool.

Question 3

In competitive pricing strategy, 'penetration pricing' means:

Accepted Answer

Setting price low initially to gain market share, then raising it

Answer

Penetration pricing sacrifices near-term margin to build volume and lock in customers before competitors respond.

Question 4

What is 'contract price redetermination' and when is it most appropriate?

Accepted Answer

Retroactively adjusting contract price after delivery based on actual costs; used when costs are highly uncertain at award

Answer

Price redetermination allows the contract price to be reset at a specified point using actual cost data, reducing risk when pre-award cost uncertainty is high.

Question 5

A supplier's general and administrative (G&A) expense pool is typically allocated using which base?

Accepted Answer

Total cost input (TCI) or value-added base

Answer

G&A is most commonly allocated on a total cost input base, distributing overhead across all contract costs proportionally.

(CCNP) Certified Contract Negotiation Professional Practice Test

(CCNP) Certified Contract Negotiation Professional Practice Test

CCNP Pricing Analysis 4