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  1. Home
  2. CIPS Certification
  3. L3M3 Exam
  4. CIPS.L3M3.v2024-05-04.q32 Dumps
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Question 16

Contribution is equivalent to:

Correct Answer: D
Selling price minus variable costs = contribution., or more accurately 'contribution towards fixed costs and making a profit'. I find this longer term for 'fixed costs' to be quite helpful in clarifying exactly what we are talking about here.
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Question 17

A sum of money credited to a buyer by a seller in recognition of a large volume of purchases bought throughout the previous year might be called a:

Correct Answer: A
It's a retrospective rebate, and can be a highly significant way of (often hidden) discounting for many businesses - sometimes a 'life-saver'. Something to think about in an open book costing situa-tion - are there rebates to suppliers which are 'forgotten' in discussions?
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Question 18

Which of the following is least likely to lend itself to whole life cost calculations?

Correct Answer: D
Not only are the flowers a relatively short-term acquisition of low value, there are unlikely to be many whole life cost elements / possibilities.
The other suggestions however, contain a minefield of long-term cost possibilities.
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Question 19

Win-win negotiation is not commonly described as a (choose the most appropriate):

Correct Answer: D
Win-win negotiation is not a 'zero-sum game': the sum of the value achieved is greater than zero - fresh value is created. It is a 'positive sum game'.
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Question 20

Where the buying organisation's contract manager feels that a contractor has under-performed, which one of the following actions is normally not recommended?

Correct Answer: D
Rewarding poor performance is not to be encouraged.
The other three options shown are often capable of motivating suppliers.
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