CIPS L4M5 Exam Practice Test Instant Access

Question 1

Which of the following are examples of variable costs?

A1 and 3 (Building and site rent and Raw materials expenditure)

B2 and 3 (Annual insurance premium and Raw materials expenditure)

C1 and 4 (Building and site rent and Delivery costs for materials)

D3 and 4 (Raw materials expenditure and Delivery costs for materials)

Answer : D

Question 2

Which of the following are examples of push techniques in commercial negotiations? Select TWO that apply.

AThreat of punishment, costs and damage

BListening to, involving and supporting others

CArgument based on information, logic and reason

DWorking together to define the problem, the goals and the best solution

EUsing language and imagery to 'paint a picture others can see'

Answer : A, C

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 5 options in this question:

'Threat of

punishment, costs and damage': The influencer tries to 'push' the other party to act as he/she wants by using force. This method is effective but short-lived. The influencer also risks to developing reputation for being heavy handed and dictatorial.

'Argument based on information, logic and reason': The influencer uses logic and reasons to persuade the other party. This is also known as 'Persuasive Reasoning' (Push)

'Using language and imagery to 'paint a picture others can see'': The influencer seeks to influence another by understanding the other's emotions, and stimulating that party's imagination to visualise the desired future goal of the influencer. This is also known as 'visionary (pull)'

'Working together to define the problem, the goals and the best solution': In this technique, the person seeking to influence another involves the other party in the decision making process. This is known as 'collaborative (pull)'

'Listening to, involving and supporting others': In this technique, the person seeking to influence another tries to discover the other party's emotion and aims at mutual understanding. This is also a collaborative approach.

Question 3

Which of the following is an example of non-verbal communication?

A1 and 3 only (Interview and Eye contact)

B2 and 4 only (Word-of-mouth communication and Body language)

C3 and 4 only (Eye contact and Body language)

D2 and 3 only (Word-of-mouth communication and Eye contact)

Answer : C

Question 4

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?

ALeading

BHypothetic

CReflective

DMultiple

Answer : B

Hypothetical questions are used to explore options or scenarios without making commitments. This technique allows negotiators to understand the other party's preferences and limitations by presenting hypothetical situations, as recommended in CIPS guidelines for negotiation questioning techniques.

Question 5

XYZ Ltd decides to go to market for a cleaning contract to service a number of offices. It knows that it will get a price which may, or may not, be better than the one it is currently paying. To gain leverage in the marketplace, the organisation decides to add other related services to the scope, such as gardening, security and maintenance, which increase the value of the contract. This is an example of which forms of spend consolidation?

APurchasing consortia

BVolume consolidation across categories

CVolume pooling

DVolume redistribution

Answer : B

Buying organisation may increase its leverage with suppliers by concentrating spend. Supplier spend consolidation can take many forms as outlined below:

- Vendor base reduction: straightforward reduction of number of suppliers in any category

- Volume pooling: pooling cross organisational requirement until your order volume is high enough to attract new bidders/additional discounts

- Volume redistribution: making recommendations following spend analysis to move from one supplier to another

- Volume consolidation across categories: certain purchase requirements may be common across a number of categories. In the scenario, XYZ has combined different categories but closely related to office services into a larger contract so that they can increase their leverage.

- Standardisation and harmonisation of specifications: analysis of specifications and standards for a high spend purchased input, may show that there is a little difference between them and that the specification can be standardised or at least harmonised across the group or across national, regional or global operations.

- Forming purchasing consortia: buyers may decide to come together and combine their purchase volumes to attract better deals.

LO 1, AC 1.3

Question 6

Which of the following is the purpose of using stakeholder support level scale?

ATo identify stakeholder level of influence and interest and plot them on stakeholder map

BTo identify stakeholder's needs and expectations

CTo estimate the gap and the progress towards desired levels of support

DTo identify key stakeholders

Answer : C

In order to estimate the gap and the progress towards desired level of support, a stakeholder support scale can be used by the procurement internally. The support level scale measures stakeholder commitment. Current support level for the procurement/negotiation objectives should be gained from engagement with key stakeholders. The following is an example of stakeholder support level scale:

LO 1, AC 1.1

Question 7

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?

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

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

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

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

Answer : C

CIPS L4M5 Commercial Negotiation Exam Practice Test