CIPS Commercial Negotiation L4M5 Exam Practice Test

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Total 275 questions
Question 1

Where a negotiator uses numerical reasoning with facts as part of their negotiation approach, which of the following techniques will they be adopting?



Answer : B

Using logic involves applying numerical data and factual evidence to support arguments in a negotiation. Logical reasoning appeals to objective analysis rather than emotional or coercive tactics and is effective in convincing the other party through structured, fact-based arguments, aligning with CIPS's guidance on logical negotiation techniques.


Question 2

Which of the following is the true statement?



Answer : B

:

Internal stakeholder support will be important not just at the initial negotiation of the contract, but potentially throughout the life of the contract right through to exit.

As a general rule, connected stakeholders (with the exception of suppliers) have a low level of influence on procurement negotiations.

Suppliers are connected stakeholders who have contractual relationships with the organisation.

Commercial negotiation objective should be driven by the business needs of the organisation, and not just the instinct of procurement.


Question 3

Which of the following is a source of power in organisational relationships?



Answer : A


Question 4

A supplier can produce a product for $160. The supplier sells the product to their client for $240, making a profit before tax of $80 on the transaction. What is the mark-up profit percentage earned by the supplier on this transaction?



Answer : C

The mark-up percentage is calculated as the profit divided by the cost of production, then multiplied by 100 to convert it into a percentage.

Calculation:

(

80

/

160

)

100

=

50

%

(80/160)100=50%

Thus, the supplier's mark-up percentage is 50%, as per standard pricing calculations used in procurement.


Question 5

According to Professor Gavin Kennedy, in which of the following forms of dispute resolution, both parties will voluntarily exchange their ideas and beliefs?



Answer : C

:

Professor Gavin Kennedy highlights that we need to distinguish negotiation from other forms of decision-making by focusing on what is unique about it (the voluntary exchange) and not shared by other

techniques such as persuasion, gambling (e.g., coin tossing), command decision, instruction, litigation and coercion.


Question 6

Jayden works as a procurement manager for a large IT organisation. They are currently in their third round of negotiations with an increasingly frustrated software solutions provider. Ben is representing the supplier. Jayden has made eye contact in the latest meeting to confirm his understanding of each of Ben's points. What communication technique is Jayden demonstrating?



Answer : C


Question 7

Which of the following are behaviours that builds trust between the buyer and the supplier in business relationship? Select TWO that apply.



Answer : A, C

:

Trust-building behaviours are as following:

Joint-effort issue resolution

Open sharing of information

Open and honest discussion on root cause of failures

Joint planning focusing on value for money and risk sharing

Commercial transparency and co-proposition of cost reduction and service improvement programmes

Joint recognition and celebration of successes


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Total 275 questions