Free CIPS L4M5 Exam Dumps Questions & Answers

Why is the use of power important for integrative commercial negotiations?
* Moving negotiations forward when they get stuck on certain issues
* Maximising the share of value gains for the negotiator's side
* Coercion of the other party into a submissive agreement
* Breaking through negotiation barriers related to attitude

• A.2 and 3 only
• B.1 and 2 only
• C.1 and 4 only
• D.2 and 4 only

Freefields Housing Authority (FHA) is a housing provider that has outsourced a range of management services using fixed-price long-term contracts. FHA's regular supplier credit reviews have identified that some key outsourced service suppliers are at risk of insolvency due to high inflation rates observed in the macroeconomic climate. Which of the following actions would enable FHA to reduce this risk for the lifetime of the affected contracts?

• A.Allow affected suppliers to review and resubmit their fixed costs
• B.Introduce indexation of contracts linked to the Consumer Prices Index
• C.End the contracts and procure the services
• D.Offer advance payment terms to the affected suppliers

"BATNA is a concept that should be considered at the start of negotiations." Is this statement correct?

• A.Yes, because it is a legal requirement for negotiations
• B.No, these are rarely used and therefore it is not necessary
• C.No, a buyer should wait until a fallback position is needed, then develop it
• D.Yes, a buyer should always have an alternative plan for leverage

When engaging in commercial negotiations, it is important to bear in mind that the suppliers need to make a reasonable profit to maintain continuity of supply. It is therefore necessary for the buyer to have a clear understanding of the break-even analysis concept which relates to cost, volume, and profit.
What is 'contribution' in relation to break-even analysis?

• A.The gains that the supplier receives when the sales revenue exceeds variable costs
• B.The gains that the supplier receives when the sales revenue exceeds fixed costs
• C.The gains from sales revenue that the supplier is willing to contribute in a profit-sharing contractual arrangement
• D.The gains from sales revenue which the supplier retains as reserves to contribute to future development projects

Which of the following roles would support negotiations with an external supplier when planning a negotiation for a low-value, routine purchase? Select TWO that apply.

• A.The Human Resource (HR) manager
• B.The Chief Executive Officer (CEO)
• C.A legal advisor
• D.The procurement manager
• E.An internal business user