CIPS L4M5

Efficient product maintenance team

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CIPS L4M5 Exam Syllabus Topics:

Reference: https://www.cips.org/learn/qualifications/diploma-in-procurement-and-supply/commercial-negotiation-l4m5/

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CIPS Commercial Negotiation Sample Questions:

Question #1
A procurement officer for a manufacturing organisation is negotiating with a supplier over the provision of components. The supplier has indicated that they have to raise their prices due to their fixed costs increasing. Which TWO of the following are types of fixed costs?

A. Warehouse logistics
B. Building rents
C. Temporary labour
D. Staff salaries
E. Raw materials

Question #2
A buyer is leading a negotiation with a supplier for plumbing parts for a large construction project with a five-year term. The buyer knows copper pipe costs will reduce after year two, while plastic component costs are forecast to rise significantly. In the negotiation, the buyer should seek to...

A. Fix the costs of the components within the contract after the third year
B. Obtain a variable cost for copper and fix the remaining cost components
C. Obtain a variable price for all components within the contract
D. Fix the costs of all components for the full five years

Question #3
Which of the following are features of a single-sourced type of relationship on the relationship spectrum?
Exclusivity granted in relation to a particular product
The supplier is an oligopoly market structure
The supplier is trusted and collaborative
Framework contracts are used to identify the supplier

A. 1 and 2 only
B. 1 and 3 only
C. 2 and 4 only
D. 2 and 3 only

Question #4
Which of the following occur within the planning and preparation stage in a negotiation process? Select THREE that apply.

A. Analyse the bargaining power
B. Making as few concessions as possible
C. Using questions to elicit information
D. Narrowing the range of solutions
E. Understanding the other party
F. Defining the constituents

Question #5
Which of the following is an objective of proposing phase?

A. Start making tentative offers
B. Create atmosphere conducive to agreement
C. Trade concessions
D. Check hypothesis and assumptions

Solutions: