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    Distributive Bargaining Calculation

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    Nurul Najwa
    1) A young couple decided to get married at the end of 2021 and visited several bridal houses including True Jannah Bridal House. 2) True Jannah initially offered RM15,000 but the couple could only afford RM10,000. After negotiations, True Jannah agreed to RM11,985. 3) Calculations show the seller gained RM1,985 from the initial buyer offer, while the couple only gained RM15 compared to their reservation price. Based on the "even split ploy", a fair negotiated price would have been RM11,625.

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    Distributive Bargaining Calculation

    Uploaded by

    Nurul Najwa
    95 views2 pages
    1) A young couple decided to get married at the end of 2021 and visited several bridal houses including True Jannah Bridal House. 2) True Jannah initially offered RM15,000 but the couple could only afford RM10,000. After negotiations, True Jannah agreed to RM11,985. 3) Calculations show the seller gained RM1,985 from the initial buyer offer, while the couple only gained RM15 compared to their reservation price. Based on the "even split ploy", a fair negotiated price would have been RM11,625.

    Original Description:

    IBM553 NEGOTIATIONS

    Original Title

    DISTRIBUTIVE BARGAINING CALCULATION

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    1) A young couple decided to get married at the end of 2021 and visited several bridal houses including True Jannah Bridal House. 2) True Jannah initially offered RM15,000 but the couple could only afford RM10,000. After negotiations, True Jannah agreed to RM11,985. 3) Calculations show the seller gained RM1,985 from the initial buyer offer, while the couple only gained RM15 compared to their reservation price. Based on the "even split ploy", a fair negotiated price would have been RM11,625.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    95 views2 pages

    Distributive Bargaining Calculation

    Uploaded by

    Nurul Najwa
    1) A young couple decided to get married at the end of 2021 and visited several bridal houses including True Jannah Bridal House. 2) True Jannah initially offered RM15,000 but the couple could only afford RM10,000. After negotiations, True Jannah agreed to RM11,985. 3) Calculations show the seller gained RM1,985 from the initial buyer offer, while the couple only gained RM15 compared to their reservation price. Based on the "even split ploy", a fair negotiated price would have been RM11,625.

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    © All Rights Reserved
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    EXERCISE 1

    A young couple who had just graduated and accepted to work with an established oil and
    gas company had decided to get married at the end of 2021. Both had visited a few famous
    bridal houses in Ampang. Upon discussion with their family members, the young couple
    decided to have a further negotiation with True Jannah Bridal House. The company offered
    them RM15,000 for the complete package. Realizing that both were still under probation
    period with the oil and gas company, they negotiated for RM10,000 for the
    service. Although the couple was aware that they had allocated RM12,000 for the service,
    but they claimed that they cannot afford to spend so much, the most that they can afford was
    RM10,500 for the service. True Jannah Bridal House then agreed to a discount of 15% and
    promise to provide the best service to them. After a few discussions, True Jannah Bridal
    House had agreed to add another 6% of his last offer which was RM1200 above his caps.
    Realizing the reputation that True Jannah Bridal House had, the young couple finally
    decided to accept the deal.   
     
    a) Determine the value of the followings in Ringgit Malaysia (RM):
     
    i) Seller’s reservation price.
     
    10,785 (11,985 – 1,200)
    (1 mark)
    ii) Buyer’s reservation price.
     
    12,000
    (1 mark)
    iii) Seller’s initial offer.
     
    15,000
    (1 mark)
    iv) Buyer’s initial offer.
     
    10,000
    (1 mark)
    v) Zone of Possible Agreement (ZOPA).
     
    1,215 (12,000 – 10,785)
    (1 mark)
    vi) Seller’s first counteroffer.
     
    12,750 (15% from seller’s initial offer)
    (1 mark)
    vii) Buyer’s first counteroffer.
     
    10,500
    (1 mark)
    viii Seller’s second counteroffer.
      )
    11,985 (6% from seller’s first counteroffer)
    (1 mark)
    ix) Buyer’s second counteroffer.
     
    None
    (1 mark)
    x) Final negotiated price.

    11,985
     

    (1 mark)

    b) Compute the amount the seller could gain from the buyer’s initial offer. Support your
    answer with the working calculation.

    Final negotiated price – buyer’s initial offer

    = 11,985 – 10,000

    = 1,985
    (3 marks)
     
    c) Calculate the perceived value the young couple could gain or lose from the list price
    compared to their reservation price.

    Buyer reservation price – final negotiated price

    = 12,000 – 11,985

    = 15
    (3 marks)
     
    d) Based on the ‘even split ploy’, recommend the fairest final negotiated price for both the
    buyer and the seller. Support your answer with the working calculation.   

    Buyer’s last counteroffer + seller’s last counteroffer/2

    = 10,500 + 12,750/2

    = 11,625  
    (4 marks)

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