CIPS L4M5 Commercial Negotiation Online Training
CIPS L4M5 Online Training
The questions for L4M5 were last updated at Feb 05,2025.
- Exam Code: L4M5
- Exam Name: Commercial Negotiation
- Certification Provider: CIPS
- Latest update: Feb 05,2025
A procurement professional is preparing for anegotiation with supplier. She is setting targets for price which her company is seeking to achieve .
Which of the following acronyms can help her identify limits before engaging in the negotiation?
- A . MIL
- B . RAQSCI
- C . TIMWOOD
- D . PPCA
A
Explanation:
MIL criteria indicate 3 limits that negotiator should establish:
M – Must achieve: minimum target/maximum you can concede on this point; the mandatory
requirement or fall back position
I – Intend to achieve: realistic target you are aiming for on this point
L C Like to achieve: stretch target to achieve on this point.
PPCA is purchase cost analysis
TIMWOOD indicates 7 types of waste in Lean principles
The RAQSCI model is a mnemonic summary of a business model used to define and structure business requirements
After studying Thomas-Kilmann conflict resolution model and considering different approaches carefully, the procurement team of XYZ Ltd. decides to adopt an avoiding approach to the upcoming negotiation with one of their suppliers.
Which of the following will be the objective of XYZ procurement team in this negotiation?
- A . Yielding the supplier’s point of view
- B . Postponing the issue
- C . Seeking a quick middle-ground position
- D . Confronting and trying to find a creative solution immediately
B
Explanation:
Avoiding is unassertive and uncooperative. When avoiding, an individual does not immediately pursue his or her own concerns or those of the other person. He or she does not address the conflict. Avoiding might take the form of diplomatically sidestepping an issue, postponing an issue until a better time, or simply withdrawing from a threatening situation.
LO 1, AC 1.1
Which of the following are most likely to be abilities of a person with high emotional intelligence? Select TWO that apply.
- A . Complex idea comprehension
- B . Controlling one’s own emotions
- C . Perceiving how others feel
- D . Reasoning and problem solving
Abstract thinking
B,C
Explanation:
Emotional Quotient is the set of skills that enables us to make our way in a complex world – the personal, social and survival aspects of overall intelligence, the elusive common sense and sensitivity that areessential to effective daily functioning. It has to do with the ability to read the political and social environment, and landscape them; to intuitively grasp what others want and need; what strengths and weaknesses are; to remain unruffled by stress; and to be engaging. The kind of person others want to be around and follow.
EQ seeks to measure emotional intelligence and is centred on abilities such as the following:
– Identifying emotions
– Evaluating how others feel
– Controlling one’s own emotions
– Perceiving how others feel
– Using emotions to facilitate social communication
– Relating to others
On the other hand, cognitive ability is defined as a general mental capability involving reasoning, problem solving, planning, abstract thinking, complex ideacomprehension, and learning from experience (Gottfredson, 1997). LO 3, AC 3.3
A supplier’s mark-up on all products is 25%. Supplier’s profit margin is…?
- A . 20%
- B . 30%
- C . 75%
- D . 15%
A
Explanation:
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Description automatically generated with low confidence LO 2, AC 2.1
A supplier’s mark-up on all products is 25%. Supplier’s profit margin is…?
- A . 20%
- B . 30%
- C . 75%
- D . 15%
A
Explanation:
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Text
Description automatically generated with low confidence LO 2, AC 2.1
A supplier’s mark-up on all products is 25%. Supplier’s profit margin is…?
- A . 20%
- B . 30%
- C . 75%
- D . 15%
A
Explanation:
Table
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Text
Description automatically generated with low confidence LO 2, AC 2.1
A supplier’s mark-up on all products is 25%. Supplier’s profit margin is…?
- A . 20%
- B . 30%
- C . 75%
- D . 15%
A
Explanation:
Table
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Text
Description automatically generated with low confidence LO 2, AC 2.1
A supplier’s mark-up on all products is 25%. Supplier’s profit margin is…?
- A . 20%
- B . 30%
- C . 75%
- D . 15%
A
Explanation:
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Description automatically generated with low confidence LO 2, AC 2.1
Broken record
- A . 1 and 3only
- B . 2 and 4 only
- C . 3 and 4 only
- D . 1 and 2 only
C
Explanation:
In the scenario, the buyer states that permission from senior management is required to shorten payment period and she only has authority to sign off a deal in which the payment period lasts at least 30 days. The buyer is using lack of authority. The buyer also repeats the matter again throughout the negotiation. This is a common tactic known as broken record.
A procurement professional is sourcing low value items. He conducts market analysis and realise that these items can be provided by many suppliers and switching cost between suppliersis relatively low. He also assume that the relationship between buyer and supplier will be transactional rather than long-term.
According to Thomas-Kilmann conflict model instrument, which of the following is the most appropriate style that the procurement professional should adopt when negotiating with these suppliers?
- A . Avoiding
- B . Compromising
- C . Competing
- D . Collaborating
C
Explanation:
According to Thomas-Kilmann conflict model instrument, there are 5 conflict management styles:
Graphical user interface, text, application, email
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In this scenario, the buyer’s bargaining power is stronger than suppliers’, and the relationship is transactional. Therefore, to get the most preferable outcome, the procurement professional can take an assertive approach, while he doesn’t need to co-operate closely with these suppliers. Competing will be the most appropriate approach to negotiation in this scenario so that the buying organisation can get a better deal.
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