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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 # 71

For a commercial negotiation to be effective, the organisation has to identify resources required for negotiation. Which one of the following could help?

Options:

A.  

Involve a larger team than the other party

B.  

Involve an appropriate cross-functional team

C.  

Involve a team of only senior managers

D.  

Involve a location-based team only

Discussion 0
Question # 72

Which of the following are most likely to be direct costs of a steel manufacturer? Select THREE that apply.

Options:

A.  

Cleaning services

B.  

Coal

C.  

Senior management salary

D.  

Insurance for production lines

E.  

Scrap metal

F.  

Hourly production wages

Discussion 0
Question # 73

Which of the following are examples of variable costs?

Options:

A.  

1 and 3 (Building and site rent and Raw materials expenditure)

B.  

2 and 3 (Annual insurance premium and Raw materials expenditure)

C.  

1 and 4 (Building and site rent and Delivery costs for materials)

D.  

3 and 4 (Raw materials expenditure and Delivery costs for materials)

Discussion 0
Question # 74

Which of the following would describe a push approach to influencing?

Exerting power or authority

Extensive use of open questioning

The party being influenced is fully aware of the process occurring

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

Options:

A.  

1 and 2 only

B.  

3 and 4 only

C.  

1 and 3 only

D.  

2 and 4 only

Discussion 0
Question # 75

During a negotiation, the supplier requests for payment term shortened to 45 days from 60 days. Seeing that this proposal lies within the concession plan, the procurement manager asks for 5% discount in return. Is that right thing to do?

Options:

A.  

Yes, the procurement manager should keep that 5% for himself because that amount is a fair compensation for his effort

B.  

No, it is unethical to exploit the weakness of the other party

C.  

No, procurement should insist the payment term remains 60 days

D.  

Yes, since procurement manager has his own cost savings target to achieve and he should make use of supplier's financial status

Discussion 0
Question # 76

A procurement manager has decided to bring in a junior member of their team to a negotiation meeting. Which of the following would be suitable roles for this junior member of the team?

Note taker

Expert

Observer

Chair

Options:

A.  

1 and 2

B.  

1 and 3

C.  

2 and 3

D.  

3 and 4

Discussion 0
Question # 77

A supplier has offered international football tickets to the procurement manager while they are in the middle of a contract negotiation. What should the procurement manager do?

Options:

A.  

Accept the offer of the tickets as this will enhance the relationship between both parties

B.  

Accept the offer as this will not affect the relationship with the supplier

C.  

Reject the offer as this may be seen as a conflict of interest during the negotiation

D.  

Reject the offer as the procurement manager will have to repay the gesture

Discussion 0
Question # 78

Distributive approach in negotiation is typified by which of the following?

Options:

A.  

Distributive approaches are inherently inferior to integrative approaches in commercial negotiation

B.  

Both parties understand each other's goals

C.  

Each party attempts to maximise the value obtained at other's expense

D.  

Both parties share 50:50 of the 'pie'

Discussion 0
Question # 79

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 against 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 ...

Options:

A.  

Accept the offer of a 5% discount against the aftercare package

B.  

Ask Jose to apply a 15% discount against the purchase price

C.  

Ask Jose to apply the 5% discount against the purchase price

D.  

Decline the offer and walk away from the negotiation

Discussion 0
Question # 80

Which of the following can be prepared before a negotiation with a supplier to achieve an agreement to benefit both parties?

Zone of potential agreement

Attendee list for the negotiation talks

Walk-away point

Venue for the negotiation talks

Options:

A.  

1 and 2

B.  

1 and 3

C.  

3 and 4

D.  

2 and 3

Discussion 0
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