This is the start of the second round of the topics of the CPSM exam. See the first post on this section from February 2008. While negotiation is huge in supply management remember that the Internet has become big in the last fifteen years. So although my version of the study guide does not talk a whole lot of the role of the Internet in contracting and negotiation, I would encourage you to think about the role of the Internet in contracting and negotiation. Do you seriously believe that you or your negotiating suppliers will not check out each other and competitors before contracting? So you need to think about the Internet when dealing with this section. But please check the language of the question, if the Internet is not mentioned at all- do not assume the role of Internet in contract and negotiation. Perhaps the question is written several years ago.
So what are the bridge topics of this section?
- Electronic solicitations (RFx) : these include the ones (perhaps all in the US) sent out by e-mail that the supplier needs to access via the e-sourcing platform of the client.
- Pricing models and market structure: refers to types of markets that you need to recognize because in some markets there may be many suppliers and this would allow you to send out RFx to all the players. Obviously when say a hundred suppliers learn that they are all bidding then you can expect to come down to the perfect competition state. In the real world things are not perfect and you need to think about imperfect competition that is a mixed state.