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L4M5 Commercial Negotiation is now Stable and With Pass Result | Test Your Knowledge for Free

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L4M5 Practice Questions

Commercial Negotiation

Last Update 4 days ago
Total Questions : 395

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Our free CIPS Level 4 Diploma in Procurement and Supply practice questions crafted to reflect the domains and difficulty of the actual exam. The detailed rationales explain the 'why' behind each answer, reinforcing key concepts about L4M5. Use this test to pinpoint which areas you need to focus your study on.

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Question # 101

Logibox Ltd is releasing a new range of stackable storage boxes. It has adopted a pricing strategy that aims to sell at a price the consumer is prepared to pay.

Which of the following is it using?

Options:

A.  

Skimming pricing

B.  

Penetration pricing

C.  

Market pricing

D.  

Premium pricing

Discussion 0
Question # 102

During which stage in the negotiation process would negotiators use tactics and exchange concessions?

Options:

A.  

Bargaining

B.  

Testing

C.  

Proposing

D.  

Closing

Discussion 0
Question # 103

Which type of power is considered the opposite of coercive power?

Options:

A.  

Referent power

B.  

Informational power

C.  

Reward power

D.  

Expert power

Discussion 0
Question # 104

A negotiation meeting commences with the supplier asking the buyer ‘How do you feel about the service you receive from us currently?’ The supplier then asks ‘What do you think about our latest products?’ followed by ‘How do we compare with other suppliers you use?’ The supplier is using which type of questions?

Options:

A.  

Probing questions

B.  

Closed questions

C.  

Open questions

D.  

Hypothetical questions

Discussion 0
Question # 105

Commercial negotiations on prices cover a range of aspects including pricing arrangements. A buyer may negotiate for a 'fixed price agreement'. Why is a fixed price agreement advantageous to the buyer?

Options:

A.  

The buyer will benefit from the savings that the supplier makes from the efficient cost management of the contract

B.  

The buyer will not need to monitor the supplier’s costs relating to the contract

C.  

Suppliers always seek price agreements that include cost-sharing incentives

D.  

Suppliers calculate prices using fixed costs which the buyer must counteract by pushing for a fixed price agreement

Discussion 0
Question # 106

Personal power is only used in distributive approach. Is this statement true?

Options:

A.  

Yes, because only distributive approach to negotiation requires strong personal power

B.  

No, because personal power can be very helpful in integrative approach

C.  

No, because only organisational power will optimise the negotiation outcomes

D.  

Yes, because one party will abuse coercive power to maximise the gain

Discussion 0
Question # 107

A building firm has been awarded a contract to construct an office block. Which is a direct cost?

Options:

A.  

Cost of materials

B.  

Cost of legal fees

C.  

Cost of insurance

D.  

Cost of office space

Discussion 0
Question # 108

If the price of a good is above the equilibrium price, which of the following will happen?

Options:

A.  

The quantity demanded is equal to the quantity supplied and the price remains unchanged

B.  

There is a shortage (i.e. an excess demand) and the price will fall

C.  

There is a surplus (i.e. an excess supply) and the price will rise

D.  

There is a surplus (i.e. an excess supply) and the price will fall

Discussion 0
Question # 109

Which of the following are most likely to help buyer become preferred customer in supplier's perspective? Select TWO that apply.

Options:

A.  

Onerous supplier terms and conditions

B.  

Compliance with agreed repair lead time

C.  

Shorter payment period

D.  

Reduction in delivery errors

E.  

Ensuring an increased number of repeat orders

Discussion 0
Question # 110

Which of the following is a variable cost?

Options:

A.  

Rent

B.  

Loan repayments

C.  

Insurance

D.  

Packaging

Discussion 0
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