Discuss CIPS L4M5 Exam Topic 1 Question 106

During a negotiation, the supplier requests for payment term shortened to 45 days from 60 days. Seeing that this proposal lies within the concession plan, the procurement manager asks for 5% discount in return. Is that right thing to do?

AYes, the procurement manager should keep that 5% for himself because that amount is a fair compensation for his effort

BNo, it is unethical to exploit the weakness of the other party

CNo, procurement should insist the payment term remains 60 days

DYes, since procurement manager has his own cost savings target to achieve and he should make use of supplier's financial status

Suggested Answer: D

When preparing for a negotiation, negotiator should establish a list of tradeables and a concession plan. Good negotiators never give anything away that has not already been planned as part of the bargaining mix in the concession planning stage.

In the above scenario, the procurement manager has planned his own concession, so he can trade with supplier. The answer should be 'Yes, since procurement manager has his own cost savings target to achieve and he should make use of supplier's financial status'

LO 2, AC 2.3

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4 comments · newest first

Ettie 20 hours ago

I think it’s okay to ask for a discount if it’s within the concession plan. The supplier initiated the change, so it seems fair to negotiate something in return.

Isaac 6 days ago

I feel like the procurement manager should stick to the original terms. Changing them could damage the relationship with the supplier, but I’m not sure if that’s the best strategy.

Alona 11 days ago

This reminds me of a practice question where we had to balance fairness and targets. I think option B might be the right approach, but I'm not completely confident.

Micah 16 days ago

I remember discussing how negotiation tactics can sometimes blur ethical lines. I'm not sure if asking for a discount is exploiting the supplier's situation.

CIPS L4M5 Exam - Topic 1 Question 106 Discussion