Unique Top-selling L4M5 Exams - New 2022 CIPS Pratice Exam
CIPS Level 4 Diploma in Procurement and Supply Dumps L4M5 Exam for Full Questions - Exam Study Guide
NEW QUESTION 51
A procurement professional is negotiating with a supplier on cleaning service. She realises that there are huge cost-saving opportunities if the supplier agrees to reduce its mark-up and unnecessary employee benefits.
Supplier's mark-up and employee benefits are examples of which of the following?
- A. Spend cube
- B. Spend waterfall
- C. Addressable spend
- D. Spend tree
Answer: C
Explanation:
Explanation
A key consideration when seeking to negotiate prices is to establish what proportion of the spend is addressable by procurement action such as negotiation. Addressability of spend is influenceable through negotiations or application of other saving effort or leverage with suppliers.
LO 2, AC 2.1
NEW QUESTION 52
Which of the following can help both parties to break the vicious cycle of blame when a relationship needs repairing? Select TWO that apply.
- A. Conflict management skills
- B. Emotional-based assessment
- C. Constant shadowing and oversights
- D. Both parties understand each other's goals
- E. Focusing onpositions
Answer: A,D
Explanation:
In order to break vicious cycle of blame, procurement will need to use their negotiation and conflict management skills,adopting a collaborative and integrative approach. Your first action should be to establish the facts that led to the situation where the relationship broke down. Most day-to-day relationship between buying organisations and suppliers do not of course involve procurement staff, so you will need to consult with your business partners internally to establish their point of view of where the issue and sources of conflict are. You should also contact the supplier and get their side of the story - this is particularly to when you have previously identified the supplier as critical or otherwise important to your operations. Ideally you will be able to apply principled negotiation here, separating the people from the issue, focusing on interests and not positions,and then looking for options of mutual benefits.
NEW QUESTION 53
A good negotiator invests time in understanding the needs of the individuals in a negotiation. Is this statement true?
- A. No, because satisfying individual needs will lead to conflict of interest and unethical practices
- B. Yes, because individuals' needs always unify with their own organisation's needs and wants
- C. Yes, because individual needs largely influence the outcomes of the negotiation
- D. No, becausenegotiator should attempt to satisfy the needs of the other organisation only
Answer: C
Explanation:
Skilled negotiators seek to understand the needs of the other parties, as well as their own. In doing so, it allows them to determine a strategy that their own needs are met. Failing to understand the other party's needs is one of the most common reason for an unsuccessful negotiation. In the commercial negotiation, procurement team does not negotiate with organisation, they negotiate with individuals. It is therefore important to recognise that there are two levels of needs:
The organisation - What the organisation wants to achieve. This is generally well stated and understood The individual - what is in it for the individual? This is generally not stated, rarely discussed, but very motivational. It is vitally important therefore that time is invested in understanding the needs of the individual Skilled negotiators are aware of the needs that occur at both levels, and develop creative options and strategies that attempt to satisfy these needs.
NEW QUESTION 54
When is the best time for buyer to propose the negotiation agenda to potential supplier?
- A. At preparation stage
- B. Atconclusion stage
- C. At opening stage
- D. At testing stage
Answer: A
Explanation:
A business negotiation agenda is a formal agreed upon list of goals to be achieved or items to be discussed in a particular order during a meeting or negotiation. Agendascan be formal and obvious, or informal and subtle in negotiations.
The agenda is one of the main structural elements of negotiation, in addition to such questions as site, identification of participants, and elements of timing. Together, they answer the who, what, when, and where questions. As with other aspects of negotiation, the agenda can be used either manipulatively to enhance leverage or to improve the prospects for agreement and the possibilities for mutual gain. In most cases, it will be used bothways, reflecting the nature of negotiation as a "mixed-motive" situation.
Although it can be instrumental to [research] volunteer as a sole source to write the agenda, in most cases it becomes a joint activity to construct a consensual basis for subsequent negotiation. In these situations, agenda-building becomes one of the pre-negotiation activities that set the tone for the relationship (Saunders,
1985). In other situations, the parties may engage in actual negotiation without a formal or written agenda.When this occurs, the risks and uncertainties may be high but the party who appreciates the importance of the informal agenda has a tremendous advantage.
Whether one plans it or not, during the course of negotiation the parties will discuss a finite set of issues in some sequence and from a particular perceptual framework. Consciousness of the universality and centrality of the agenda is prerequisite to guiding negotiation to a successful conclusion.
NEW QUESTION 55
Which of the following is the best description of direct cost?
- A. Direct costs include raw materials, labour andoverheads
- B. Direct costs are only variable raw materials that constitute a product
- C. Direct costs include only raw materials and labour of making the final product
- D. Direct costs include raw materials, labour and other expenses attributable to the final product
Answer: D
Explanation:
Direct costs are those costs of a product/service directly attributable/traceable to its production, for example, the costs of labour and materials directly used to produce the goods/services which the organisation sells.
NEW QUESTION 56
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. Confronting and trying to find a creative solution immediately
- C. Seeking a quick middle-ground position
- D. Postponing the issue
Answer: D
Explanation:
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
NEW QUESTION 57
A supplier's mark-up on all products is 25%. Supplier's profit margin is...?
- A. 30%
- B. 75%
- C. 15%
- D. 20%
Answer: D
Explanation:
Explanation
Table Description automatically generated with medium confidence
Text Description automatically generated with low confidence
LO 2, AC 2.1
NEW QUESTION 58
Which of the following is the area where two or more negotiating parties may find common ground?
- A. Zone of proximal development
- B. Best alternative to a negotiated agreement
- C. Walk away area
- D. Zone of potential agreement
Answer: D
Explanation:
Explanation
The zone of possible agreement (ZOPA) orbargaining range is considered an area where two or more negotiating parties may find common ground. It is this area where parties will often compromise and strike a deal. In order for negotiating parties to find a settlement or reach an agreement, they must work towards a common goal and seek an area that incorporates at least some of each party's ideas.
The zone of proximal development refers to the difference between what a learner can do without help and what he or she can achieve with guidance and encouragement from a skilled partner.
There is no Walk away area. Walk away point is a position from which you cannot concede any more ground and must walk away/decline a deal.
Best alternative to a negotiated agreement is a fallback or backstop position if the negotiation fails to result in an agreement/no deal is agreed.
LO 1, AC 1.2
NEW QUESTION 59
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, ormay 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 consolidation across categories
- B. Volume redistribution
- C. Purchasing consortia
- D. Volume pooling
Answer: A
Explanation:
Explanation
Buying organisation may increase its leverage with suppliers byconcentrating 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 60
Which of the following is the most appropriate approach to investors or shareholders who have high level of influence but low interest in the running of business?
- A. Engage and keep them satisfied
- B. Engage and consult with them regularly
- C. Manage them closely
- D. Keep these people inform through general communication media
Answer: A
Explanation:
Explanation
Investors or shareholders who have high level of influence but low interest belong to 'Keep satisfied' quadrant of Mendelow's Stakeholder Matrix.
You may read 2 versions from L4M1 and L4M5 here:
Table Description automatically generated
LO 1, AC 1.1
NEW QUESTION 61
Which of these personal power bases stems from the manager's position in the organisation and the authority that lies in that position?
- A. Expert power
- B. Coercive power
- C. Legitimate power
- D. Reward power
Answer: C
Explanation:
Explanation
Legitimate power comes from the belief that a person has the formal right to make demands, and to expect others to be compliant and obedient. Legitimate power comesfrom rules, formal authority, organisation rank, staff grade or official position held. In commercial negotiation, legitimate power can be demonstrated by job title and rank.
LO 1, AC 1.3
NEW QUESTION 62
An organisation is developing the specification for a capital purchase project. An important stakeholder has doubt on the draft specification. The buyer invites him to the product function meetings. In these meeting the attendees can raise their concerns, the specification development team takes in all the concerns and adjusts the specification accordingly. What kind of technique is the specification development team using?
- A. Directive
- B. Visionary
- C. Persuasive reasoning
- D. Coalition
Answer: D
Explanation:
In the scenario, anyone who has concerns can join a meeting to raise their thoughts. The project team takes the stakeholders' ideas into account. This isknown as coalition: A group of people or organisations come together and work collaboratively to achieve some goals. Specifically in this scenario, the goal is creating a high-quality and unified specification for an important project.
NEW QUESTION 63
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. RAQSCI
- B. PPCA
- C. MIL
- D. TIMWOOD
Answer: C
NEW QUESTION 64
Which of the following are examples of push techniques in commercial negotiations? Select TWO that apply.
- A. Threat of punishment, costs and damage
- B. Listening to, involving andsupporting others
- C. Argument based on information, logic and reason
- D. Working together to define the problem, the goals and the best solution
- E. Using language and imagery to 'paint a picture others can see'
Answer: A,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 influencertries 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'semotions, 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 65
Which of the following are types of questions that are useful in opening and testing phases of a negotiation?
Select the TWO that apply.
- A. Closed
- B. Probing
- C. Narrow
- D. Leading
- E. Open
Answer: B,E
Explanation:
In the opening phase, parties should confirm understanding and get the issues on the table.
The testing phase is an information gathering stage where the hypothesis and assumption you have made in the planning stage can be tested or confirmed or disproved.
Opening questions (those that start with 'what', 'how', 'why') are used at the opening and testing stages to uncover needs and underlying motives, and to allow the buyer to get a feel of what is in store in the negotiation.
Probing questions are also useful to check that the supplier fully understand their offering, as well as your needs, and can also be used to communicate to the supplier that you know this category well. These questions are typically useful at the opening andtesting stages.
NEW QUESTION 66
According French and Raven's base model, which of the following are sources of personal power that can be used in commercial negotiation? Select THREE that apply.
- A. Coercive power
- B. Purchasing spend power
- C. Competitive power
- D. Legitimate power
- E. Trademark power
- F. Expert power
Answer: A,D,F
Explanation:
A useful model of personal power that has survived the test of time and provide a simple way to analyse negotiation in French and Raven's Power BaseModel, which describes six bases of power:
Diagram Description automatically generated
NEW QUESTION 67
......
CIPS L4M5 Exam Syllabus Topics:
| Topic | Details |
|---|---|
| Topic 1 |
|
| Topic 2 |
|
| Topic 3 |
|
| Topic 4 |
|
| Topic 5 |
|
| Topic 6 |
|
| Topic 7 |
|
| Topic 8 |
|
| Topic 9 |
|
| Topic 10 |
|
| Topic 11 |
|
| Topic 12 |
|
| Topic 13 |
|
| Topic 14 |
|
Best way to practice test for CIPS L4M5: https://www.examtorrent.com/L4M5-valid-vce-dumps.html
L4M5 Dump Ready - Exam Questions and Answers: https://drive.google.com/open?id=1TWz_oI7Uwa2_ZWmi8krHQFi15LsCd-0q
