2026 100% Free L4M5 Daily Practice Exam With 387 Questions
L4M5 exam torrent CIPS study guide
NEW QUESTION # 48
There are no commitments in hypothetical questions. Is this statement true?
- A. Yes, because hypothetical questions generate a specific response
- B. Yes, because hypothetical questions only mention possible situations
- C. No, because hypothetical questions are made explicitly to the other party
- D. No, because the party who makes hypothetical questions cannot withdraw their proposals
Answer: B
Explanation:
There are four types of questions that can be used in a commercial negotiation:
Hypothetical questions, where you ask about a possible situation or abstract concept, are very useful at the testing and proposal phases. Hypothetical question does not state any commitment as it is only about 'if something happens, then ...'. This type of question can be useful at giving suggestion.
Text Description automatically generated
LO 3, AC 3.3
NEW QUESTION # 49
Which of the following are examples of push techniques in commercial negotiations? Select TWO that apply.
- A. Working together to define the problem, the goals and the best solution
- B. Threat of punishment, costs and damage
- C. Argument based on information, logic and reason
- D. Listening to, involving and supporting others
- E. Using language and imagery to 'paint a picture others can see'
Answer: B,C
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 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.
NEW QUESTION # 50
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?
- A. Volume pooling
- B. Purchasing consortia
- C. Volume consolidation across categories
- D. Volume redistribution
Answer: C
Explanation:
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
NEW QUESTION # 51
According to Fiona Dent and Mike Brent, which of the following are characteristics of Push approach? Select TWO that apply.
- A. Seeking commitment
- B. Persuasion
- C. Collaborative
- D. Directive
- E. Inspirational
Answer: B,D
Explanation:
According to the book 'Influencing: Skills and techniques for business success' by Fiona Dent and Mike Brent, there are two major influencing styles. Push tends to be directive. It tells, and is clear and resolute, but needs to be employed in situations where firmness is required because of difficulties that exist or weakness is evident. Pull is more participatory and collaborative. It seeks to incorporate everyone's perspective. It can appear wishy-washy if not skilfully employed. That approach should be followed which is most likely to secure commitment and not mere compliance.
The two divisions can be further divided into four style categories: directive; persuasive reasoning; collaborative - team oriented, people oriented to inspire them with a vision. The directive style relies on your expertise and reputation being respected by others, and where there really does seem to be one answer. It is
"I" driven whereas persuasive reasoning is more "we" and issue driven. Directive styles can make the user appear as "a bull in a china shop"; persuasive reasoning can be portrayed as tough guy.
Collaborative influencing takes the "we" element further and seeks to mobilise everyone's ideas in a journey of discovery. It may have the flavour of "I'm your best friend", which may not go down too well. Visioning style is concerned to stir people's emotions in support of achieving an objective. This last one has been used by demagogues to stir people's hearts and minds for evil purposes as well as good.
A useful table offers the benefits, problems, words and body language associated with each style along with advice on when to use and when to avoid each. Cases and exercises illustrate these styles.
Empathy comes in for extended treatment with the definition of "standing in the other's shoes". This does not necessarily happen just intuitively, and therefore before a specific influencing effort there should be an intense effort to think about the other person or persons and to sense what it might feel like to be them - their hopes, fears, concerns, what turns them on, what turns them off, where are they coming from.
NEW QUESTION # 52
How contribution is calculated in break-even analysis?
- A. Fixed costs divided by variable costs
- B. Variable costs subtracted from price
- C. Variable costs subtracted from fixed costs
- D. Price minus fixed costs
Answer: B
Explanation:
:
Contribution = Price - Variable cost
Break-even point (volume) = Fixed cost/Contribution
NEW QUESTION # 53
Power is used only in adversarial negotiation situations to secure a 'win' outcome against the other side. Is this statement correct?
- A. No, the use of power is not important in commercial negotiations as each side only looks for areas of agreement
- B. No, the use of power can be necessary in integrative negotiations to help overcome time-wasting issues
- C. Yes, it only in adversarial negotiation that the use of power is necessary, because of the win-lose outcome
- D. Yes, all negotiations entail a commercial contest which is always adversarial, as the powerful side gains
Answer: B
NEW QUESTION # 54
An organisation should develop different relationships appropriate to each supply situation. Which ONE of the following analysis methods could help identify these?
- A. A spectrum of non-critical items
- B. The relationship spectrum
- C. Resources and cost spectrum
- D. The colour spectrum
Answer: B
Explanation:
CIPS describes a relationship spectrum from arm's-length/transactional through collaborative/partnership, matched to spend criticality, risk, and strategic importance; analysis helps select the appropriate relationship style before and during negotiation.
Reference: CIPS L4M5 (2nd ed.), LO 3.1 - Relationship types and the relationship spectrum; alignment to sourcing/negotiation approach.
NEW QUESTION # 55
Which of the following is considered a weakness of a 'dealer' style negotiator?
- A. Very precise
- B. May shift position quickly
- C. May be too assertive
- D. Focuses on the facts and not the people
Answer: B
Explanation:
A useful and simple shorthand for preferred negotiation styles is summarised by four simple descriptor:
'warm', 'tough', 'logical' and 'dealer', which can be applied to describe individuals' dominant preferred style in most circumstances.
Warm - a people person
Tough - a hard-nosed negotiator
Logic - a numbers person
Dealer - a trader who loves bargaining
Strengths, weaknesses of dealer style are described below:
LO 2, AC 2.4
NEW QUESTION # 56
A supplier's mark-up on all products is 25%. Supplier's profit margin is...?
- A. 30%
- B. 15%
- C. 20%
- D. 75%
Answer: C
Explanation:
LO 2, AC 2.1
NEW QUESTION # 57
XYZ Ltd is importing goods from overseas. They prefer to pay theirsupplier in their own currency. Which of the following is a true statement?
- A. XYZ has to pay more if their currency depreciates
- B. Supplier will receive less if XYZ's currency appreciates
- C. XYZ is able to pay less if their currency depreciates
- D. XYZ has an advantage in negotiating discounts if their currency appreciates
Answer: D
Explanation:
Explanation
The effect of a change of relative exchange rates will be determined by which currency you pay your supplier in.
Table Description automatically generated
LO 2, AC 2.2
NEW QUESTION # 58
John Browne, a junior buyer for a corporation, is analysing the global supply market before undertaking negotiations and is wondering whether foreign exchange rates are important to factor into his research. Should John consider the foreign exchange rates?
- A. Yes, as they can affect profit and turnover
- B. Yes, only if the organisation can handle foreign currencies in their accounts
- C. No, as they only affect the bank's interest rates for loans
- D. No, exchange rates only apply to the national economy
Answer: A
NEW QUESTION # 59
Which of the following method should be used in negotiation if both parties want to communicate verbally and non-verbally without having to meet face-to-face?
- A. Web conferencing
- B. In-person meeting
- C. Teleconferencing
- D. Telephone
Answer: A
Explanation:
Explanation
Using webcams in a web conference means you are able to communicate both verbally and non verbally.
Over the phone, you cannot see TOP, the only cue/signal you have regarding their mood, interest and attitude is person's voice, intonation andany delay.
A teleconference is a telephone meeting among two or more participants involving technology more sophisticated than a simple two-way phone connection.
In-person meeting requires you team and TOP to be in the same place at the same time.
LO 2, AC 2.4
NEW QUESTION # 60
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. Reward
- B. Legitimate
- C. Referent
- D. Expert
Answer: D
NEW QUESTION # 61
Which of the following are sources of power in organisational relationships?
* Coercive power
* Intruded power
* Referent power
* Tactical power
- A. 1 and 3 only
- B. 1 and 4 only
- C. 1 and 2 only
- D. 2 and 4 only
Answer: A
Explanation:
Coercive powerstems from the ability to apply pressure or sanctions, whilereferent powercomes from reputation, charisma, or respect. These are both recognised power sources in negotiations. "Intruded" and
"tactical" power are not classified within the standard power framework used in CIPS materials.
"Sources of power include coercive (based on threats or penalties), referent (based on personal appeal or influence), and others such as reward, expert, and legitimate power." (L4M5 Commercial Negotiation, 2nd edition, Section 3.1 - Power in Negotiation)
NEW QUESTION # 62
Which of the following are intangible values created by trust in business relationships? Select TWO that apply.
- A. Increasing response time to request
- B. Frequent conflict escalation
- C. More focus on core business
- D. Positive feedbacks from customers
- E. Higher revenues
Answer: C,D
Explanation:
Trust may create value as following:
LO 1, AC 1.4
NEW QUESTION # 63
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