Updated Jun-2026 Exam L4M5 Dumps - Pass Your Certification Exam
Latest Real CIPS L4M5 Exam Dumps Questions
CIPS L4M5 (Commercial Negotiation) Exam is an internationally recognized professional certification for individuals who want to advance their career in procurement and supply chain management. L4M5 exam is designed to test the knowledge and skills of candidates in commercial negotiation, a critical aspect of procurement that involves the process of bargaining, persuading and compromising with suppliers or customers to achieve a mutually beneficial outcome.
NEW QUESTION # 229
At which stage in a negotiation would questions be asked to obtain missing information?
- A. The bargaining stage
- B. The opening stage
- C. The testing stage
- D. The proposing stage
Answer: C
Explanation:
There are 5 key phases of negotiation:
The opening phase: confirm understanding and get the issue on the table The testing phase: check assumption and confirm understanding The proposing phase: asking 'if' The bargaining phase: using tradeables The agreement and closing phase The testing could take the form of questions following a presentation by either side or questions on a tender or proposal document received by the buyer from the potential supplier. The testing phase is necessary to confirm that your approach and objectives are appropriate for the negotiation situation you now find yourself in. Careful listening, observation and interpretation of TOP's responses may give indication of the following:
Areas where TOP is willing and unwilling to make concessions
What factors or issues TOP places a high value on
If there are any non-commercial or emotional factors that may be pertinent TOP's underlying interests - why they are taking the position they are.
NEW QUESTION # 230
Which of the following are tools that help procurement visualise cost breakdowns of products and services purchased from supplier?
1. Spend candlesticks
2. Spend tree
3. Aggregate expenditure model
4. Spend waterfall
- A. 3 and 4 only
- B. 1 and 3 only
- C. 1 and 2 only
- D. 2 and 4 only
Answer: D
Explanation:
:
Understanding where and with whom your supplier spends their money, or understanding the 'cost breakdowns' or 'price build-up' of the goods and services you purchase from the supplier, will help you know where and when they can offer price concessions.
Cost information can be expressed with more impact through graphs that can be created using Excel and PowerPoint or other softwares. There are two commonly used models known as 'spend waterfall' and 'spend tree'. Spend waterfall shows the build-up of costs, while the spend tree shows all the spends that an organisation makes.
There is no graph known as 'spend candlesticks'. Candlestick chart is a style of financial chart used to describe price movements of a security, derivative, or currency.
The aggregate expenditure model is a method of calculating GDP. The aggregate expenditure model focuses on the relationships between production (GDP) and planned spending: GDP = planned spending = consumption + investment + government purchases + net exports.
NEW QUESTION # 231
AB Manufacturing seeks to buy a new materials resource planning (MRP) software system. At the 'defining the business need' stage of the procurement cycle, the procurement manager ensured that all the internal stakeholders involved had the power to contribute and sign off on requirements. For the MRP system, the procurement manager consulted the head of production planning of AB Manufacturing. The head of production contributed to demand levels, existing manufacturing planning, and existing staff levels. What type of power does the head of production demonstrate?
- A. Referent
- B. Expert
- C. Reward
- D. Legitimate
Answer: B
NEW QUESTION # 232
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:
- A. Ask Jose to apply the 5% discount against the purchase price
- B. Decline the offer and walk away from the negotiation
- C. Accept the offer of a discount against the aftercare package
- D. Ask Jose to apply a discount against the price
Answer: C
NEW QUESTION # 233
In what circumstances is the bargaining power of suppliers likely to be high, in relation to buyer power?
Select the THREE that apply:
- A. The number of suppliers is limited
- B. The buying firm is large in comparison to the supplier
- C. The demand is not urgent
- D. The volume required is low
- E. The product the buyer requires is undifferentiated
- F. The supplier has highly specialized machinery
Answer: A,D,F
NEW QUESTION # 234
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?
- A. Rational persuasion
- B. Inspirational appeal
- C. Coalition
- D. Personal appeal
Answer: A
Explanation:
This question is a duplicate of Question 22, and the answer remains Rational persuasion (A). The supplier's use of economic justifications aligns with rational persuasion, an influencing tactic defined by CIPS as presenting logical, fact-based reasons to secure agreement.
NEW QUESTION # 235
In which of the following persuasion methods, the influencer uses logics and objective reasons to persuade the others to buy into influencer's ideas?
- A. Persuasive reasoning (push)
- B. Visionary (pull)
- C. Directive (push)
- D. Collaborative (pull)
Answer: A
Explanation:
:
There are two major persuasion methods: 'push' and 'pull'.
Persuasion can be defined as encouraging someone to do something that you want them to do for you.
Persuasion is reasoning with someone so that they will believe or do something they might not otherwise do.
Persuasion can be considered as 'pushing' on TOP so that they can accept the change in attitude or behaviour as a result of your actions.
Influence is the ability to affect the manner of thinking of another. Influence can be considered as pulling on TOP so that you achieve the same result, but TOP feels they have changed their attitude or behaviour as a result of their reflection and thinking, and not your direct actions.
There are multiple variables to consider when choosing between 'push' and 'pull'. Professor Fiona Dent of Ashridge Business School proposes situations when each style might be most appropriate, breaking down push into 'directive' and 'reasoning' and 'pull' into 'collaborative' and 'visionary':
Table Description automatically generated
Text Description automatically generated
Using logical and objective reasons is one of the typical characteristics of persuasion reasoning method.
NEW QUESTION # 236
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?
- A. Hypothetical
- B. Reflective
- C. Multiple
- D. Leading
Answer: A
Explanation:
Reference: CIPS L4M5 Study Guide, Section 3.2 - The Negotiation Process
NEW QUESTION # 237
There are many factors which will influence supplier pricing decisions. Which of the following are external factors that may apply? Select THREE that apply:
- A. Price elasticity of demand
- B. Where the product is in its 'lifecycle'
- C. Cost of production
- D. Customer perceptions of value
- E. Objectives of the organisation
- F. Environmental factors affecting the cost of raw materials
Answer: A,B,F
NEW QUESTION # 238
During a negotiation, a procurement manager suggests that the two companies should split the difference which would benefit both the supplier and buyer. Which persuasion method is she using?
- A. Good cop/bad cop
- B. Compromise
- C. Logic
- D. Threat
Answer: B
Explanation:
In the scenario, the manager propose to 'split the difference', which means each party will accept some of their demands and concede some. This is known as 'Compromise'.
NEW QUESTION # 239
In which of the following costing methods, overhead costs are applied in proportion to production volume?
- A. Mark-up costing
- B. Activity-based costing
- C. Absorption costing
- D. Marginal costing
Answer: C
Explanation:
There are 3 major costing methods:
Marginal costing
* Uses marginal cost of producing addition units
* Uses variable cost to derived a unit cost (does not include fixed cost)
* Fixed cost treated as a 'period cost' and deducted, as a total amount, from total contribution to profit for the period, in the firm's profit and loss account Absorption costing
* Calculates total cost of producing product
* In addition to variable cost, a fair proportion of fixed cost is allocated to (absorbed) eachunit of output, as a fixed cost per unit Activity based costing
* Similar to absorption costing but with fixed cost allocated to products on the basis of the cost of activities used in producing them LO 2, AC 2.1
NEW QUESTION # 240
Which of the following should be done by the procurement team at the closing stage of a negotiation? Select TWO that apply.
- A. Tell TOP that they could have got a better deal
- B. Seek agreement in principle if TOP does not have the final authority
- C. Accept ambiguity or uncertainty
- D. Gloat publicly about the deal
- E. Leave the meeting as soon as possible
Answer: B,E
Explanation:
The agreement and closing phase is the phase when it is either clear through explicit language, or strongly suggested through non-verbal signals, that TOP is ready to move to agreement. Judging when to close can be difficult and as with phases of the negotiation, experience, observation, practice and reflection will be the best ways to learn here.
In the closing phase, procurement should:
- Watch for closing/buying signals
- Check to ensure all issues have been resolved
- Consider using visual aids to summarise
- Use 'summary close'
- Make a decision to conclude/close
- Seek agreement in principle if TOP does not have the final authority
- Make your own private notes on the final agreement
- Shake hands on the agreement
- Leave the meeting as soon as possible thereafter.
LO 3, AC 3.1
NEW QUESTION # 241
All of the following shift the supply of watches to the right except...?
- A. Manufacturers' expectation of higher watch prices in the future
- B. A decrease in the wage of workers employed to manufacture watches
- C. An advance in the technology used to manufacture watches
- D. An increase in the price of watches
Answer: D
Explanation:
A supply curve will slope upward from left to right showing more supply at higher prices, as illustrated in the graph below:
A picture containing chart Description automatically generated
A movement along the supply curve will be brought about by a change in price, but a shift of the whole curve will be caused by a determinant other than price:
- The physical feasibility and time and energy required to produce the products
- Technology and innovation
- The objectives of the producers and their future expectations
- Prices of other goods and services
- Government's policies
LO 2, AC 2.2
NEW QUESTION # 242
When is the best time for buyer to propose the negotiation agenda to potential supplier?
- A. At preparation stage
- B. At opening stage
- C. At testing stage
- D. At conclusion stage
Answer: A
Explanation:
A business negotiation agenda is a formal agreed upon list of goals to be achieved or items to be discussed in a particular order during a meeting or negotiation. Agendas can be formal and obvious, or informal and subtle in negotiations.
The agenda is one of the main structural elements of negotiation, in addition to such questions as site, identification of participants, and elements of timing. Together, they answer the who, what, when, and where questions. As with other aspects of negotiation, the agenda can be used either manipulatively to enhance leverage or to improve the prospects for agreement and the possibilities for mutual gain. In most cases, it will be used both ways, reflecting the nature of negotiation as a "mixed-motive" situation.
Although it can be instrumental to [research] volunteer as a sole source to write the agenda, in most cases it becomes a joint activity to construct a consensual basis for subsequent negotiation. In these situations, agenda- building becomes one of the pre-negotiation activities that set the tone for the relationship (Saunders, 1985).
In other situations, the parties may engage in actual negotiation without a formal or written agenda. When this occurs, the risks and uncertainties may be high but the party who appreciates the importance of the informal agenda has a tremendous advantage.
Whether one plans it or not, during the course of negotiation the parties will discuss a finite set of issues in some sequence and from a particular perceptual framework. Consciousness of the universality and centrality of the agenda is prerequisite to guiding negotiation to a successful conclusion.
Reference:
CIPS study guide page 146-150
Managing the negotiation agenda | SpringerLink
What is Negotiations Agenda - Negotiation Coaching (brightfocusconsult.com)
NEW QUESTION # 243
Which one of these key approaches could be pursued for a successful negotiation of a commercial agreement?
- A. A distributed approach
- B. An agency approach
- C. An integrated spend analysis
- D. A collaborative win-win approach
Answer: D
Explanation:
Acollaborative win-win approachfocuses on mutual benefit and long-term value creation. This strategy is especially effective in strategic partnerships where trust, information sharing, and problem-solving are emphasized over competition.
"The collaborative win-win approach aims to create outcomes where both parties gain. This strengthens the relationship and leads to sustainable agreements built on trust and transparency." (L4M5 Commercial Negotiation, 2nd edition, Section 1.1 - Win-Win Negotiation Strategy)
NEW QUESTION # 244
In addition to organisational power, personal power of each negotiator can influence the outcomes of a negotiation. A good negotiator can leverage different sources of power. Is this statement true?
- A. Yes, because all sources of power have similar effectiveness in every situation
- B. No, because only organisational power can be leveraged during a negotiation
- C. No, because each person has only one superior source of personal power
- D. Yes, because the good negotiator recognises his own power in a negotiation
Answer: D
Explanation:
Both organisational and personal power have the ability to influence the outcomes of negotiation. Good negotiators recognises the different sources of relative personal power they possess in a negotiation. There is no one superior source of personal power; they will vary in their effectiveness based on the situation. The more personal sources available the better, even if some not used, these can be used as a fallback.
LO 1, AC 1.3
NEW QUESTION # 245
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?
- A. Hypothetical
- B. Reflective
- C. Multiple
- D. Leading
Answer: A
NEW QUESTION # 246
An oil refinery plant imports much of its crude oil from overseas. A procurement manager in the refinery suggests that fixing the crude oil contract price for 36 months would be beneficial for the company. Would this be a right thing to do?
- A. No, the refinery would not be able to reap the benefits from falling commodity price and currency rates
- B. No, fixed price should be only applied to contracts that last 60 months or longer
- C. Yes, the supplier would bear the risk when the material price increased
- D. Yes, financial budgeting task would be a lot easier with fixed pricing arrangement
Answer: A
Explanation:
Fixed price contract is the contract in which the price is static throughout the contract period. A fixed-price contract may give certainty to budget and simplify contract management. However, it may lead to other problems since it requires bidders to estimate and bear the financial risks associated with price escalations. If the estimates are too high or events do not materialize, the buyer will pay a steep price that may affect the economy and efficiency of the contract. In the worst case, it may mean that the bid price is then above budget and may lead to a reduction in the requirements or rebidding. If the estimates are too low, it may appear as an abnormally low bid and disrupt contract execution.
On the other hand, price adjustment provisions include formulas designed to address problems, and can protect both the borrower and contractors from price fluctuations. Price adjustment formulas allow contractors to offer more realistic prices at the time of bidding. Despite concerns that they may lead to budget uncertainties, price adjustment formulas will estimate the actual cost implications that will be encountered.
They use indexes that can be used for cost projection.
According to Asia Development Bank (ADB), any contract with a delivery or completion period beyond 18 months should contain an appropriate price adjustment clause.
In the scenario, the crude oil contract is planned to last 36 months. This period is pretty long with a fluctuating commodity. Therefore, the company should use price adjustment agreement.
NEW QUESTION # 247
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?
- 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
Answer: C
NEW QUESTION # 248
In general, which of the following is the consequence of a flatter demand curve?
- A. Quantity elastic
- B. Price inelastic
- C. Unit price elastic
- D. Price elastic
Answer: D
Explanation:
Elasticity refers to the responsiveness of quantity demanded or quantity supplied to a change in price or another factor.
In microeconomic graphs, elasticity and inelasticity can be shown by the slope of the demand curve. If a demand curve is almost horizontal, then the product pricing can be described as very elastic. If a demand curve is almost vertical, then the product pricing can be described as very inelastic.
The formulae of elasticity:
Text Description automatically generated with low confidence
Table Description automatically generated with medium confidence
Table Description automatically generated with low confidence
LO 2, AC 2.2
NEW QUESTION # 249
Which negotiation approach is focused on a win-win outcome?
- A. Distributive
- B. Collaborative
- C. Collective
- D. Adversarial
Answer: B
Explanation:
A collaborative negotiation approach is explicitly designed to achieve win-win outcomes, where both parties work together to maximise joint value. This approach is closely associated with integrative negotiation, emphasising trust, information sharing, and joint problem-solving. Distributive and adversarial approaches are win-lose, focusing on dividing value rather than creating it. "Collective" is not a recognised CIPS negotiation approach. Collaborative negotiation is particularly suitable where long-term relationships, shared objectives, or strategic partnerships are important.
Reference: CIPS L4M5 Commercial Negotiation (CORE), 2nd edition - LO 1.1: Integrative and collaborative negotiation approaches.
NEW QUESTION # 250
Which of the following is important during the proposing stage of a negotiation?
- A. Persuading the other party to accept your proposal
- B. Narrowing the range of options
- C. Not making concessions to the other party
- D. Attempting to close down any discussions
Answer: A
NEW QUESTION # 251
A buyer is preparing for an upcoming negotiation with a large supplier on a contract renewal price. The buyer has undertaken some analysis and is concerned that changes in the organisation's macro-environment over the last year will result in a price increase. The buyer's analysis has identified changes in which of the following?
- A. Changes in demand
- B. Internal policies
- C. Exchange rates
- D. Supplier power
Answer: C
Explanation:
Reference: CIPS L4M5 Study Guide, Section 2.3 - Market Factors and Analysis
NEW QUESTION # 252
'What specific tests do you carry out to ensure quality is achieved?' This is an example of which type of negotiation question?
- A. Closed
- B. Reflective
- C. Probing
- D. Leading
Answer: C
Explanation:
Explanation
The question requires more detailed answer, it is an example of probing question.
Probing questions are typically follow-up questions, and aim to elicit more detailed information on the back of the answer elicited from theopen questions. Probing question are also useful to check that the supplier fully understand their offering, as well as your needs, can also be used to communicate to the suppliers that you know this category well.
LO 3, AC 3.3
NEW QUESTION # 253
......
L4M5 Dumps To Pass CIPS Level 4 Diploma in Procurement and Supply Exam in One Day: https://www.ipassleader.com/CIPS/L4M5-practice-exam-dumps.html
100% Guaranteed Results L4M5 Unlimited 387 Questions: https://drive.google.com/open?id=1sZRrGKIb7-BZMSLgmhehZtqi1hYd3DLZ