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Negotiation Question

Posted: Wed Sep 17, 2014 11:30 pm
by umeshbww
You are authorized to approve expenditures above $15,000. For the last several weeks you have been negotiating the terms and pricing of a contract with a vendor, and you want to keep costs as low as possible. This has been a very difficult negotiation process. A colleague suggests you tell the vendor you can only approve expenses below $10,000 as a way to keep the price low. What do you do?

A. Ask for binding arbitration.
B. Tell the vendor you are only authorized to approve expenses under $10,000.
C. Do not follow the colleague's advice.
D. Put a deadline on the negotiation completion.

Re: Negotiation Question

Posted: Thu Sep 18, 2014 7:44 am
by Parul
Since it states been negotiating for several weeks first thing would be to put an End date to Negotiation so that a project has the correct and final cost and can plan accordingly.

What tactic you use to negotiate can be as per the PM's choice and co policy. And for asking binding arbitration Negotiation should be completed and then in Agreement we can have such clause.

Hence I wud go wth D .

Re: Negotiation Question

Posted: Thu Sep 18, 2014 1:53 pm
by umeshbww
Thanks Parul - This question is from Scordo. I selected same option D but answer was option C. Do not follow the colleague's advice.

I selected option D thinking - not only we ignoring friend's advice but also applying negotiation skill to solve current problem at hand.