This page was exported from Exam for engine [ http://blog.test4engine.com ] Export date:Mon Nov 18 2:37:28 2024 / +0000 GMT ___________________________________________________ Title: [UPDATED 2023] CIPS L4M5 Questions Prepare with Free Demo of PDF [Q74-Q95] --------------------------------------------------- [UPDATED 2023] CIPS L4M5 Questions Prepare with Free Demo of PDF NEW 2023 Certification Sample Questions L4M5 Dumps & Practice Exam CIPS L4M5 exam covers a wide range of topics related to commercial negotiation, including negotiation planning, strategies, tactics, and techniques. Candidates are also tested on their understanding of the legal and ethical considerations that come into play during negotiations, as well as their ability to manage conflicts and build long-term relationships with suppliers. L4M5 exam is suitable for professionals who are involved in procurement, supply chain management, and contract management roles, as well as those who are looking to advance their careers in these areas.   Q74. 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?  Web conferencing  Telephone  Teleconferencing  In-person meeting ExplanationUsing 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 2.4Q75. Which of the following are factors that might shift the demand curve for a consumer good to the right?1. Prices of complementary goods decrease2. Price of the consumer good decreases3. Customers’ expectation of higher prices in the future4. Consumer tastes shift toward substitute products  3 and 4 only  4 and 2 only  1 and 3 only  1 and 2 only ExplanationA shift in demand occurs when an influencing factor other than price changes. Those factors are:– The income ofbuyers– The tastes and preferences of buyers– The prices of other goods and services, especially substitutes and complements– Expectations of buyer about the futureIn this question:– ‘Prices of complementary goods decrease’ will lead toquantity demanded for that complements rising, then demand for consumer good will increase accordingly.– ‘Price of the consumer good decreases’ will increase the quantity demanded for that good, but it will not shift the demand curve– ‘Customers’ expectation of higher prices in the future’: in this scenario, customers tend to buy more to store in present, which leads to demand curve shifting to the right– ‘Consumer tastes shift toward substitute products’: Demand for substitutes will rise, so demand forthat consumer good will decrease and the demand curve shifts to the left.LO 2, AC 2.2Q76. 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?  Spend waterfall  Spend cube  Spend tree  Addressable spend ExplanationA 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 2.1Q77. Where can we find the data on macroeconomics?1. From trade journal2. From supplier’s marketing catalogue3. From stock exchange market4. From government’s statistics  2 and 4 only  3 and 4 only  1 and 2 only  1 and 3 only ExplanationMacroeconomic indicators are statistics or data readings that reflect the economic circumstances of a particular country, region or sector. They are used by analysts and governments to assess the current and future health of the economy and financial markets.Macroeconomic indicators will vary in their meaning and the impact that they have on the economy, but broadly speaking there are two main types of indicator.– Leading indicators, which forecast where an economy might be heading. They are often used by governments to implement policies because they represent the first phase of a new economic cycle. These include the yield curve, interest rates and share prices.– Lagging indicators, which reflect an economy’s historical performance and only change after a trend has been established. They are used to confirm a trend is underway. These include gross domestic product (GDP), inflation and employment figures.There is also the category of coincident indicators, but these are generally grouped in with lagging indicators as they either happen at the same time or after an economic shift.The best macroeconomic indicator to watch will heavily depend on your personal preferences, what positions you are taking and which country your portfolio is focused on. However, there are some very common indicators that most traders and investors will keep an eye on.For simplicity’s sake, we have split these out into leading and lagging indicators.Top leading indicators:1. The stock market2. House prices3. Bond yields4. Production and manufacturing statistics5. Retail sales6. Interest ratesTop laggingindicators:1. GDP growth rates2. The Consumer Price Index (CPI) and inflation3. Currency strength and stability4. Labour market statistics5. Commodity pricesA procurement professional may find stock market data from the security exchange, whilemost lagging indicators (such as GDP, CPI, unemployment rate, currency and inflation rate, etc) can be found from government statistics data.Q78. 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?  Yielding the supplier’s point of view  Postponing the issue  Seeking a quick middle-ground position  Confronting and trying to find a creative solution immediately ExplanationAvoiding 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 1.1Q79. Which of the following are most likely to be macro factorsthat may influence the balance of power in commercial negotiation? Select THREE that apply.  Economic growth rates  Disruptive technologies  Purchasing spend volume  Sustainability of natural resources  Intensity of competition in a industry  Number of substitute products or services ExplanationAll one-to-one commercial negotiations between a specific purchaser and a specific supplier take place within an industrial market and a larger business environment characterised by multiple forces which both parties typically have little control over. STEEPLE framework highlights the 6 main external influences on a business:Table Description automatically generatedLO 1, AC 1.3Q80. JCB is a large manufacturer of heavy machinery. The CPO is going to a negotiation with a Chinese supplier about procuring some major components. He is wondering about balance of power in the negotiation. Which of the following micro factors are most likely to shift the balance of power towards the buying organisation in this commercial negotiation? Select TWO that apply  Buyers purchase in small volumes  Suppliers are more concentrated than buyer  Eruption of epidemic in supply market  JCB’s switching costs are low  These components are highly standardised ExplanationThere are many factors that can influence the balance of power in a negotiation. These factors are classified into 3 levels:– Macro level: STEEPLE framework: social, technological, economic, environment, political, legal and ethical– Micro level: Porter’s five forces:Diagram Description automatically generated– One-to-one buyer-supplier dynamics.The question asks about the micro factors that increases buyer’s bargaining power. Among 5 answers, only 2 are likely to increase buyer’spower:– JCB’s switching costs are low: Buyer may easily switch its suppliers anytime– These components are highly standardised: The products are not different any more, buyer may choose to buy from any supplier available.Other answers cannot be correctbecause:– Suppliers are more concentrated than buyer: Suppliers are forming oligopoly market, their bargaining power tend to be greater.– Eruption of epidemic in supply market: this is a macro factor. Eruption of epidemic may cause factories closed and disruptions on supply chain.– Buyers purchase in small volumes: Buyer will be seen as less potential to suppliers. Buying organisation may have difficulties to deal better price with suppliers.LO 1, AC 1.3Q81. Which of the following are the most typical characteristics of integrative approach to negotiation? Select TWO that apply.  Positional-based  Claiming value  Interest-based  Short-term wins  Creating more value Integrative approach to negotiation used when the interested parties are attempting to create more of something of value to share, also known as collaborative approach or win-win. Integrative, interest-based negotiation can facilitate constructive, positive relationship and establishes contracts between parties on a foundation of goodwill. In integrative bargaining, both parties seek to ‘expand the pie’ by creating more value for both the buyer and the seller. Integrative negotiation ‘shares thepie’ and is interest rather than positional based.In distributive bargaining, the focus is on claiming value and getting as much of the pie as parties can.Table Description automatically generatedLO 1, AC 1.2Q82. Which of the following are most likely to be sources of conflict that can emerge from the process of commercial negotiations? Select TWO that apply.  Differences in conflict management style  Differences in culture  Types of purchase  Standard terms and conditions  Line of the best fits There are multiple sources of divergent positions that can arise in situations where money is exchange for goods and services. There are 2 different types of sources. Those that arise from the content or subject matter of the negotiation (what is being negotiated) and those that arise from the process of negotiation (how it is being negotiated).Sources of divergent positions – the process of negotiation:Table Description automatically generatedLine of best fits is the line that goes approximately through the middle of the data points with an equal number of data points above and below it. Line of best fits is a method of calculating medium value instatistics.Standard terms and conditions are basic terms and conditions of business governing transactions that do not have a definitive contract, usually designed to be included in form documents such as orders. While there may be conflicts regarding standard terms and conditions, they are about the content of negotiation, not the process.Type of purchase: when buying organisation makes an decision to purchase an item, a buyer is faced with three possible scenarios. The item to be bought could be a straight re-buy, a modified re-buy or a new purchase. Decision on type of purchase is purely an internal decision.Q83. Jane is planning for a forthcoming negotiation with a key supplier. She has learned what are important to the supplier and what are important to her company from previous contracts between them. In order to avoid negotiation deadlocks, she has set up several concession plans. But Jane has little experience in dealing with suppliers and doesn’t know when to trade these concessions. When is the best time in a negotiation to trade concessions?  In the testing phase  In the proposing phase  At bargaining stage  At opening stage ExplanationThe question asks about the point in time when Jane should make concessions with the supplier. These concessions should be traded afterpreliminary stages such as opening, testing and proposing are over and proposals move from being tentative and general to being more definite and specific. This stage is called bargaining phase. The bargaining phase is the ‘meat’ of the negotiation meeting.LO 3, AC 3.1Q84. Should a buyer use closed questions in a negotiation?  Yes, because closed questions help to reconfirm certain facts  Yes, because they urge the supplier to provide more detailedExplanation::  No, the buyer should maximise the use of open questions  No, supplier will consider closed questions as provocation Asking questions the right way is both an art and a science. Ask the question the wrong way, and the other negotiator might act like a turtle, becoming defensive and withdrawing into their shell. Ask the question the right way, and the other negotiator might “spill the beans.”.Closed Questions: How and when to use them?Closed questions are those thatrequire a short and focused answer, and are especially helpful in the beginning stages of the negotiation to encourage interaction. They can be used to clarify a point, or to reconfirm certain facts. For example, you can use a closed question to confirm the amount of units the company can produce in a week, or to clarify that what they are really saying is that they don’t feel comfortable outsourcing their accounts to India. Most closed questions only require a simple “yes” or “no” response, so there reallyisn’t much room for misinterpretation – great for finding out where both you and they stand.Q85. Which of the following are most likely to turn buying organisation into an unattractive customer in supplier’s perspective? Select TWO that apply.  Demands for kickback  Reduced paperwork in procurement processes  Adopting clear and concise CSR policies  Unclear tender award criteria  Using SRM technology Becoming a preferred customerto supplier’s perspective can increase the purchaser’s leverage in negotiation.Beside the size of buying organisation or its spend, the following may be sufficient to differentiate the buyer from other buying organisations:Simple procurement processes: Using SRM technology may help to simplify the process Simple contracting processes Clear and concise documentation: Reduced paperwork helps both supplier and buyer save their time and resources.Absence of onerous supplier terms and conditionsOn-time paymentTransparent processes: Unclear tender award criteria can be seen as opaque. Suppliers who attended the tendering processes cannot know the reasons why their bids are rejected and hesitate to attend other tendering.Ethical behaviour: Suppliers may prefer a buyer who adopts CSR policy because they can predict potential customer’s behaviour. Demands for kickback are unethical behaviours.Q86. Ma Bell was the sole provider of landline telephoneservice to most of the US in 1980s. This is an example of…?  Monopsony  Monopoly  Monopolistic competition  Perfect competition ExplanationA monopoly exists when only one company can supply an essential product or service in a givenregion because of significant barriers to entry for any competitor. The barriers can be legal, regulatory, economic, or geographic. Ma Bell case is an example of monopoly. The company was broken up in 1982.A monopsony is a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers.Pure or perfect competition is a theoretical market structure in which the following criteria are met:– All firms sell an identical product (the product is a “commodity” or “homogeneous”).– All firms are price takers (they cannot influence the market price of their product).– Market share has no influence on prices.– Buyers have complete or “perfect” information-in the past, presentand future-about the product being sold and the prices charged by each firm.– Resources for such a labor are perfectly mobile.– Firms can enter or exit the market without cost.Monopolistic competition characterizes an industry in which many firms offerproducts or services that are similar, but not perfect substitutes. Barriers to entry and exit in a monopolistic competitive industry are low, and the decisions of any one firm do not directly affect those of its competitors. Monopolistic competition is closely related to the business strategy of brand differentiationQ87. Which of the following are examples of connected stakeholders in a private organisation? Select TWO that apply.  Customers  Local community  Media  Government  Shareholders Connected stakeholders are those who, by contractual or commercial relationships, have a significant stake in organisation activity. As a general rule, connectedstakeholder (with the exception of suppliers) have a low level of influence on procurement negotiations.Examples of connected stakeholders are: suppliers, customers, bank where the organisation opens its account, shareholders.Q88. Which of the following are examples ofnon-verbal negotiation? Select THREE that apply.  Asking the supplier to repeat their proposal  Getting messages across with facial expressions  / Speaking softly with long pauses  Communicating with the other party by using gestures  Explaining to the supplier about the scope of the project  Using the body language ExplanationNonverbal communication is important because it gives us valuable information about a situation including how a person might be feeling, how someone receives information and how to approach a person or group of people.There are several types of nonverbal communications you should be aware of, including:1. Body languageBody language is the way someone situates their body naturally depending on the situation, the environment and how they are feeling.Example: Someone might cross their arms if they are feeling angry or nervous.2. MovementThe way you move your arms and legs such as walking quickly or slowly, standing, sitting or fidgeting, can all convey different messages to onlookers.Example: Sitting still and paying attention in a meeting conveys respect and attention.3. PostureThe way you sit or stand can also communicate your comfort level, professionalism and general disposition towards a person orconversation.Example: Someone might slouch their shoulders if they feel tired, frustrated or disappointed.4. GesturesWhile gestures vary widely across communities, they are generally used both intentionally and unintentionally to convey information toothers.Example: Someone in the United States might display a “thumbs up” to communicate confirmation or that they feel positively about something.5. SpaceCreating or closing distance between yourself and the people around you can also convey messages about your comfort level, the importance of the conversation, your desire to support or connect with others and more.Example: You might stand two to three feet away from a new contact to respect their boundaries.6. Paralanguage:Paralanguage includes the non-language elements of speech, such as your talking speed, pitch, intonation, volume and more.Example: You might speak quickly if you are excited about something.7. Facial expressionsOne of the most common forms of nonverbal communication isfacial expressions. Using the eyebrows, mouth, eyes and facial muscles to convey can be very effective when communicating both emotion and information.Example: Someone might raise their eyebrows and open their eyes widely if they feel surprised.8. Eye contactStrategically using eye content (or lack of eye contact) is an extremely effective way to communicate your attention and interest.Example: Looking away from someone and at the ground or your phone may convey disinterest or disrespect.9. TouchSomepeople also use touch as a form of communication. Most commonly, it is used to communicate support or comfort. This form of communication should be used sparingly and only when you know the receiving party is okay with it. It should never be used to conveyanger, frustration or any other negative emotions.Example: Placing your hand on a friend’s shoulder may convey support or empathy.Q89. Which of the following will help to indicate personality preferences in four dimensions?  Thomas-Kilmann Conflict Resolution model  Intelligence quotient  Mill’s RESPECT mnemonic  Myers-Briggs Type Indicator The Myers-Briggs Type Indicator (MBTI) is an introspective self-report questionnaire indicating differing psychological preferences in how people perceive the world and make decisions. MBTI indicates personality preferences in four dimensions.The Thomas-Kilmann Conflict Mode Instrument (TKI) is a conflict style inventory, which is a tool developed to measure an individual’s response to conflict situations.Mill’s RESPECT mnemonic is set out by Harry A. Mills which describes seven steps to agreements An intelligence quotient (IQ) is a total score derived from a set of standardized tests designed to assess human intelligence.Q90. Which of the following are most likely to beindirect costs of a garment manufacturer? Select THREE that apply.  Packaging material  Textile  Zips pads  Maintenance materials  Utilities  Depreciation of machinery Indirect costs are those cost that are not directly attributable to production. Examples of indirect costs including the following:Indirect labour: This covers every person in the factory who does not directly perform a production operation such as managers, supervisors, engineers, store personnel,clerks, maintenance staff, porters, canteen staff, security and cleaners etc.Expenses: Included in this element is every fixed and variable expenses incurred in operating the factory, such as rent, rates, utilities, insurance, depreciation, maintenance, air conditioning and the various types of energy generation required by a clothing factory.Indirect materials: Also known as consumables, this element contains all the materials not directly connected to the makeup of a garment. Some of the typical items involved are office materials, spare parts, marker paper, maintenance materials, chalk & pins.Direct costs are those costs of a product/service directly attributable/traceable to its production. Examples of direct costs including the following:Direct Materials: Direct materials are all the materials and trimmings which go into the construction and finish of the garment. Typically, these materials would include cloth, lining, fusible, zips pads, tapes, labels, tickets, hangers and packaging materials.Direct Labour: This cover the cost of all the labor directly involved in producing the garment and could include cutting, fusing, regular sewing, special machine operations, pressing, finishing, inspection and packing. Labor of all types and grade has a directoverhead which include holiday pay, sick pay, fringe benefits etc and the statutory payments made by the employer for each employee. This is usually expressed as a percentage of salary and when this percentage is added to the employee’s wage, it becomes the basis for calculating direct labor costs.Q91. Which of the following is the first step in the development of negotiation strategies?  Determining your BATNA  Developing scenarios around possible options  Recognising TOP’sneeds and wants  Defining overarching objectives Developing specific negotiation strategies in areas where risk or spend is high involves analysing a wide range of objectives and variables within the context of the organisation’sbusiness requirements. The first stage in any negotiation preparation is to define your overall objectives which may be related to a single variable such as price in the case of a standardised requirement, or many variables in the case of capital equipment. Your negotiating strategies and tactics will all be focused on achieving overall objectives.Q92. Which of the following isthe definition of safety margin?  The difference between current or forecasted sales and sales at the break-even point  The amount of revenue that remains after subtracting costs directly associated with production  The production level at which total revenues for a product equal total expenses  The incremental money generated for each product/unit sold after deducting the variable costs As a financial metric, the margin of safety (safety margin) is equal to the difference between current or forecasted sales and sales at the break-even point. The margin of safety is sometimes reported as a ratio, in which the aforementioned formula is divided by current or forecasted sales to yield a percentage value. The figure is used in both break-even analysis and forecasting to inform a firm’s management of the existing cushion in actual sales or budgeted sales before the firm would incur a loss.This is a question that a student met in her actual exam. The margin of safety is not even mentioned in the CIPS study guide.Q93. Sally is negotiating with an oversea supplier on the price and payment period. Her company and the supplying organisation are equal in bargaining power.The supplier says that they are investing in new facilities and machinery so the payment period should not be longer than 30 days. Sally knows that her company often pays the suppliers after 45 days from the delivery, but at the moment the company has positive cash flow and it is able to pay immediately. Which of the following should be Sally’s concession plan?  Contend on the normal payment period  Shorten payment period but ask for a discount  Agree with supplier’s payment period without anyfurther demand  Demand for a discount without any other concessions ExplanationIn the scenario, the length of payment period is particularly important to the supplier as they are investing new facilities. Otherwise, the buyer’s company has apositive cash flow position and budget is available for a shorter payment terms. So this tradeable (payment period) is important to supplier but it is not a significant problem with the buyer. This tradeable will fall within ‘Easy concession to trade’ quadrant in the following matrix:Table Description automatically generatedIf the tradeable fall within this quadrant, Sally should shorten the payment period in supplier’s favour and try to win as many concessions as possible in return. Asking for a discount may be a reasonable trade-off.LO 2,AC 2.3Q94. What is the most likely outcome when two organisations with adversarial relationship negotiate with each other?  Deadlocked  Lose lose  Win lose  Win win An adversarial relationship in purchasing and supply arises when identical or equivalent good or services are available from competing suppliers and buyers/sellers are trying to gain an advantage over each other. Low levels of trust are characteristic of adversarial relationships. The outcome when two organisations with adversarial negotiate is most likely to be win-lose.Q95. At which stage in a negotiation would questions be asked to obtain missing information?  The bargaining stage  The proposing stage  The opening stage  The testing stage There are 5 key phases of negotiation:The opening phase: confirm understanding and get the issue on the table The testing phase: check assumption and confirm understanding The proposing phase:asking ‘if’ The bargaining phase: using tradeables The agreement and closing phase The testing could take the form of questions following a presentation by either side or questions on a tender or proposal document received by the buyer from the potential supplier. The testing phase is necessary to confirm that your approach and objectives are appropriate for the negotiation situation you now find yourself in.Careful listening, observation and interpretation of TOP’s responses may give indication of the following:Areas where TOP is willing and unwilling to make concessionsWhat factors or issues TOP places a high value onIf there are any non-commercial or emotional factors that may be pertinent TOP’s underlying interests – why they are taking the positionthey are. Loading … L4M5 Deluxe Study Guide with Online Test Engine: https://www.test4engine.com/L4M5_exam-latest-braindumps.html --------------------------------------------------- Images: https://blog.test4engine.com/wp-content/plugins/watu/loading.gif https://blog.test4engine.com/wp-content/plugins/watu/loading.gif --------------------------------------------------- --------------------------------------------------- Post date: 2023-10-08 13:57:32 Post date GMT: 2023-10-08 13:57:32 Post modified date: 2023-10-08 13:57:32 Post modified date GMT: 2023-10-08 13:57:32