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CIPS L4M5 Exam (page: 8)
CIPS Commercial Negotiation
Updated on: 25-Dec-2025

Viewing Page 8 of 56
L4M5 PDF 275 Questions

The bargaining power of buyers is likely to be high in relation to suppliers in which of the following situations?

  1. The buyer spend is a low proportion of the supplier's revenue
  2. The buyer does not have the option to make as an alternative to buy
  3. The buyer demand is urgent and cannot be postponed
  4. The buyer is large in size relative to the supplier

Answer(s): D

Explanation:

The bargaining power of buyers increases when the buyer is large relative to the supplier. A large buyer can leverage its size to negotiate more favorable terms due to its significant impact on the supplier's business. CIPS notes that a buyer's size and purchasing volume are key factors that enhance its negotiating power in buyer-supplier relationships.



Procurement gets involved in negotiating purchase requisitions only when there is a value analysis to ensure that only value-adding aspects are included. Is this statement true?

  1. No, purchasing can negotiate other details of the purchase requisition even where value analysis is absent
  2. No, value analysis is a very technical process that requires the expertise of engineering and financial analysts
  3. Yes, the role of purchasing is to add value to the purchase, and therefore every purchase requisition must go through a team value analysis
  4. Yes, value analysis is the single most important responsibility of procurement in the processing of repeat requisitions

Answer(s): A

Explanation:

Procurement can negotiate various aspects of a purchase requisition even without a formal value analysis.
While value analysis can enhance cost-effectiveness, procurement professionals often negotiate on pricing, terms, and conditions to add value independently of value analysis, as per CIPS's guidelines on procurement flexibility in negotiations.



Which of the following is a source of information on microeconomic factors?

  1. Published economic indices such as the Retail Price Index (RPI)
  2. Data published by the financial markets and commodity markets and exchanges
  3. Analysis published in the mainstream and financial media
  4. The marketing and corporate communications of suppliers

Answer(s): D

Explanation:

The marketing and corporate communications of suppliers are direct sources of microeconomic information, particularly about individual companies and industry conditions. Other options (RPI, financial market data, etc.) are more aligned with macroeconomic data, focusing on broader economic trends, as outlined in CIPS definitions of micro vs. macroeconomic data sources.



Which of the following would describe a push approach to influencing?

Exerting power or authority
Extensive use of open questioning
The party being influenced is fully aware of the process occurring The party being influenced may not be aware of the process happening

  1. 1 and 2 only
  2. 3 and 4 only
  3. 1 and 3 only
  4. 2 and 4 only

Answer(s): C

Explanation:

A push approach typically involves exerting authority or power (1) with the party being influenced generally aware of the influence process (3). This method involves overtly directing or persuading the other party, often through explicit information or directives, as per CIPS's understanding of push influence techniques.



Which of the following are features of a single-sourced type of relationship on the relationship spectrum?

Exclusivity granted in relation to a particular product The supplier is an oligopoly market structure
The supplier is trusted and collaborative
Framework contracts are used to identify the supplier

  1. 1 and 2 only
  2. 1 and 3 only
  3. 2 and 3 only
  4. 2 and 4 only

Answer(s): B

Explanation:

Single-sourced relationships often involve exclusivity for a specific product (1) and a high level of trust and collaboration (3) between buyer and supplier. This type of relationship is selected for strategic procurement purposes, often involving long-term partnerships, which align with CIPS's relationship spectrum guidelines.



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Katiso Lehasa 9/15/2025 11:21:52 PM

Thanks for the practice questions they helped me a lot.
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