CIPS L4M5 Exam Dumps (V9.02) – Pass Your Commercial Negotiation L4M5 Exam with the Most Updated Study Materials

1. Which of the following occur within the planning and preparation stage in a negotiation process? Select THREE that apply.

2. A purchasing organisation is discussing its approach to an upcoming negotiation with a key supplier over a contract for critical new services. They have decided they want to find a Win/Win (integrative) solution.

Which TWO of the following would be appropriate in this scenario?

3. Maria is a professional services category buyer within the National Health Service. Due to the severe financial budget cutbacks the National Health Service is facing, the procurement team has been tasked with achieving cost savings so that funding available can be spent on patient care. Maria plans to achieve savings with one of her collaborative suppliers.

Which negotiation approach should she undertake?

4. Hammad Alsuwaidi is a procurement professional leading a negotiation for a vehicle rental contract. Hammad has a clear goal to negotiate a two-year contract in exchange for a minimum of a 20% discount. During the negotiation, Hammad presents to the supplier the facts, figures, and justification for a 20% discount.

Which of the persuasion methods below has Hammad chosen?

5. Which of the following are variable costs?

6. For a commercial negotiation to be effective, the organisation has to identify resources required for negotiation.

Which one of the following could help?

7. What are the potential sources of conflict between the buyer and supplier? Select TWO that apply.

8. When developing a negotiation approach, according to recognised theory (for example, Mendelow), how should stakeholders with high interest but low power be managed?

9. Undertake reflective practice after each negotiation

10. Maria has adopted an adversarial style relationship with her stationery supplier. This relationship style can be characterised by which of the following? Select the TWO that apply.

11. Contract award and implementation

12. A supplier can produce a product for $160. The supplier sells the product to their client for $240, making a profit before tax of $80 on the transaction.

What is the mark-up profit percentage earned by the supplier on this transaction?

13. A wide range of factors may be taken into account by suppliers when setting or negotiating prices.

Which of the following are external factors in pricing decisions? Select TWO that apply.

14. Which of the following roles would support negotiations with an external supplier when planning a negotiation for a low-value, routine purchase? Select TWO that apply.

15. The stages of commercial negotiation involve which of the following characteristics?

16. Which of the following constitutes a key element to developing high-trust supplier relationships?

17. The sourcing manager has decided to adopt an adversarial style of negotiation to take advantage of the buyer's greater bargaining power over the suppliers.

In what other circumstances should an adversarial relationship be used?

18. The sourcing manager has decided to adopt an adversarial style of negotiation to take advantage of the buyer's greater bargaining power over the suppliers.

In what other circumstances should an adversarial relationship be used?

19. A skilled negotiator will use a range of questioning techniques in a negotiation.

If they wished to explore options with the other party without making any formal commitment, which type of question style would they use?

20. Where a negotiator uses numerical reasoning with facts as part of their negotiation approach, which of the following techniques will they be adopting?

21. Which of the following is a description of mark-up?

22. Fast & Easy Limited, a global fast food retailer, is in a negotiation with its major meat supplier. The supplier is asking for a 2% price increase, which Fast & Easy is strongly resisting. The supplier justifies this increase by stating that currency fluctuations, an unstable economic climate, and rising transport costs have necessitated this increase.

Which influencing tactic is the supplier using?

23. Fast & Easy Limited, a global fast food retailer, is in a negotiation with its major meat supplier. The supplier is asking for a 2% price increase, which Fast & Easy is strongly resisting. The supplier justifies this increase by stating that currency fluctuations, an unstable economic climate, and rising transport costs have necessitated this increase.

Which influencing tactic is the supplier using?

24. A procurement manager has been asked to procure 1,000 pens. He suggests to his manager that to obtain the best value for money, they should undertake a competitive bidding process.

Would this be the best course of action?

25. When is an adversarial style of negotiation appropriate?

26. The National Schools Purchasing Forum (NSPF) is a procurement organisation that purchases goods and services on behalf of schools on a national scale. NSPF is close to concluding negotiations in a meeting with Hygienics For All (HFA) for the supply of consumables to school washrooms. Both parties have reached an agreeable position, and NSPF feels it is important that they conclude the negotiation at this point.

What type of questions should NSPF ask HFA to achieve this?

27. Which of the following are microeconomic factors? Select THREE that apply.

28. Venue for the negotiation talks

29. Effective listening is important in integrative negotiations. Is this statement correct?

30. A procurement expert has been asked to ensure they consider emotional intelligence in their negotiation strategy. They have agreed to this and have started planning their approach.

Which of the following describes emotional intelligence?

31. Which of the following would be considered appropriate influencing techniques in contract negotiation? Select TWO that apply.

32. When might a buyer decide to use a distributive approach to a negotiation with a supplier?

33. Mike is a junior buyer who has been working for a manufacturing organisation for two years, specializing in purchasing research. Over this time, he has built good relationships within his team and with other departments.

Which of the following sources of power is Mike most likely to possess?

34. A procurement manager is considering negotiating variable pricing for a contract duration of 12 months. Would this be the right thing to do?

35. Where there are high levels of commitment to relationships between both the buyer and supplier, this is seen as collaborative and beneficial to negotiations. Is this statement correct?

36. Influencing

37. Champion Toys (CT) is negotiating a large order of luxury toys with its supplier, Top Teds. CT has identified that lead times, order quantities, and delivery locations are tradeables that could be used in this negotiation.

At which negotiation stage should CT introduce these tradeables?

38. The bargaining power of buyers is likely to be high in relation to suppliers in which of the following

situations?

39. Procurement gets involved in negotiating purchase requisitions only when there is a value analysis to ensure that only value-adding aspects are included. Is this statement true?

40. Which of the following is a source of information on microeconomic factors?

41. The party being influenced may not be aware of the process happening

42. Framework contracts are used to identify the supplier

43. Different types of relationships impact commercial negotiations.

At a negotiation, which one of the following sources would help to support leverage for the buyer?

44. The stage in the product life cycle

45. Which of the following is active listening?

46. An adversarial style of negotiation is appropriate where the buyer has greater bargaining power over the supplier. In what other situations may the buyer adopt this style of negotiation?

47. Lina Rawlins is a senior buyer working for a medical equipment company. Lina is in charge of the company’s largest supplier account, Great Barrington Gas (GBG), a medical equipment supplier. Recently, GBG's performance has declined, leading to an increasing number of rejected items. Lina is aware of the seriousness of this and has asked GBG to attend an urgent meeting. In the meeting, Lina asked the GBG representative, “Can you tell me exactly what you are doing to ensure quality?"

What type of question is Lina asking?

48. Langham Industries is seeking to expand its operations globally. The CEO has asked the procurement department to engage in a macroeconomic analysis for its potential new supply chain to meet organisational objectives and outcomes.

Which of the following would be a source of macroeconomic data?

49. Tony is undertaking a negotiation with a strategic supplier and is frustrated by the lack of progress. He proposes using threats to get what he wants from the negotiations.

Is this the correct course of action?

50. During a negotiation, Jose Gomez, the salesperson for a strategic supplier, states that his sales director will not approve discounts against initial purchases. However, Jose offers a 5% discount on the aftercare package, which will provide the same monetary saving. Sally Pampas requires both the product and the aftercare package and has an objective to achieve a 5% discount off the purchase price. To achieve a win-win (integrative) negotiation, Sally should...

51. Any commercial negotiation process has only three potential stakeholders: procurement, the budget holders, and the users. Is this TRUE?

52. John Browne, a junior buyer for a corporation, is analyzing the global supply market before undertaking negotiations and is wondering whether foreign exchange rates are important to factor into his research.

Should John consider the foreign exchange rates?

53. A garden furniture supplier who is currently in negotiations for a high-value contract has offered the procurement manager a visit to their site. The supplier suggests that during this visit, they can undertake the contract negotiation.

What would be an appropriate response from the procurement manager?

54. An organization should develop different relationships which are appropriate to each supplier situation.

Which ONE of the following analysis methods could help to identify these?

55. What is a benefit to the buyer of having a BATNA (best alternative to a negotiated agreement) in a negotiation?

56. Chair

57. Which of the following types of questions are likely to be the most effective to check facts in negotiations?

58. How can having a best alternative to a negotiated agreement (BATNA) support the buyer in a negotiation? Select THREE options that apply.

59. Using compromise and creativity tactics

60. Which of the following are examples of variable costs?

Building and site rent

Annual insurance premium

Raw materials expenditure

Delivery costs for materials