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L4M5 CIPS Commercial Negotiation Free Practice Exam Questions (2025 Updated)

Prepare effectively for your CIPS L4M5 Commercial Negotiation certification with our extensive collection of free, high-quality practice questions. Each question is designed to mirror the actual exam format and objectives, complete with comprehensive answers and detailed explanations. Our materials are regularly updated for 2025, ensuring you have the most current resources to build confidence and succeed on your first attempt.

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Total 317 questions

’What specific tests do you carry out to ensure quality is achieved?’ This is an example of which type of negotiation question?

A.

Leading

B.

Probing

C.

Reflective

D.

Closed

Macroeconomics can have an impact on commercial negotiations. Is this statement correct?

A.

Yes, because factors such as inflation might influence pricing decisions

B.

No, because these considerations only affect the buyer

C.

Yes, because sales volumes are a key factor in the discussions

D.

No, because these macroeconomics can be discussed and addressed with a WIN/WIN (integrative) strategy

A procurement professional is preparing for a negotiation 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.

MIL

B.

RAQSCI

C.

TIMWOOD

D.

PPCA

A skilled negotiator will use a range of questioning techniques in a negotiation. If they wished to explore options with the other party without making any formal commitment, which type of question style would they use?

A.

Leading

B.

Hypothetical

C.

Reflective

D.

Multiple

Different types of relationships impact commercial negotiations. At a negotiation, which one of the following sources would help to support leverage for the buyer?

A.

Legitimate power

B.

Personality power

C.

Powerful colleagues

D.

Friends power

Which of the following is a description of mark-up?

A.

Profit expressed as a percentage of the selling price

B.

Profit expressed as a percentage of costs

C.

Profit expressed as a percentage of fixed costs

D.

Profit expressed as a percentage of variable costs

Maria is a professional services category buyer within the National Health Service. Due to the severe financial budget cutbacks the National Health Service is facing, the procurement team has been tasked with achieving cost savings so that funding available can be spent on patient care. Maria plans to achieve savings with one of her collaborative suppliers. Which negotiation approach should she undertake?

A.

Win-Lose

B.

Lose-Lose

C.

Win-Perceived Win

D.

Win-Win

Which of these personal power bases stems from the manager's position in the organisation and the authority that lies in that position?

A.

Coercive power

B.

Legitimate power

C.

Expert power

D.

Reward power

When developing a negotiation approach, according to recognised theory (for example Mendelow), how should stakeholders with high interest but low power be managed?

A.

Minimal effort

B.

Key player

C.

Keep informed

D.

Keep satisfied

The purpose of ongoing supplier relationship management following a negotiation and contract award is that it:

A.

1 and 2 (Enables the buyer to monitor supplier performance and persuade the supplier to renegotiate better terms)

B.

1 and 3 (Enables the buyer to monitor supplier performance and work with the supplier to resolve relationship problems)

C.

3 and 4 (Enables the buyer to work with the supplier to resolve relationship problems and evaluate unnecessary concessions)

D.

2 and 3 (Enables the buyer to persuade the supplier to renegotiate better terms and work with the supplier to resolve relationship problems)

Which of the following would cause a demand curve for a good to be price inelastic?

A.

There are a great number of substitutes for the good

B.

The consultancy service

C.

The luxury goods

D.

The necessary goods

In order to mitigate all risks involved in the negotiation process, the buyer only needs to undertake pre-negotiation research on the supply market and establish a BATNA. Is this a correct suggestion?

A.

No, the buyer should also keep the top management and all employees informed

B.

No, the buyer should make preparations in other areas such as determining the negotiation team

C.

Yes, establishing a fallback position is important because it signifies that the negotiations will reach an impasse

D.

Yes, because the market price should be the target price of the negotiations

Citywide Developments Ltd (CDL) is a construction programme management company that delivers high-value property development schemes. CDL uses named consultant design services in contracts. Recently, consultancy day rates have increased. Which of the following tradeable concessions could CDL offer when negotiating with suppliers to achieve lower rates, without lowering service quality?

A.

Accept unqualified trainee consultants

B.

Reduce the volume-based rate discounts

C.

Offer a shorter consultant working day

D.

Remove the requirement for the named personnel

A buyer is approaching a negotiation where the company is in a low-power negotiating position in relation to the supplier. How can the buyer improve leverage and power with the supplier?

A.

1 and 2 (Consolidate expenditure and understand supplier costs)

B.

2 and 3 (Understand supplier costs and take a distributive approach)

C.

3 and 4 (Take a distributive approach and limit communication)

D.

1 and 4 (Consolidate expenditure and limit communication)

At the first stage of CIPS Procurement and Supply Cycle (Understand need), which of the following is the most important duty of procurement professional?

A.

Demand management

B.

Evaluating the interests from suppliers

C.

Undertaking 'reverse marketing'

D.

Deciding whether RFQ or ITT should be used

At which stage in a negotiation would questions be asked to obtain missing information?

A.

The bargaining stage

B.

The proposing stage

C.

The opening stage

D.

The testing stage

When is the best time for buyer to propose the negotiation agenda to potential supplier?

A.

At opening stage

B.

At conclusion stage

C.

At testing stage

D.

At preparation stage

Collaborative approach in negotiation not only can fully satisfies the concerns of both, but also ensure that neither party will seek to be opportunistic in later time during the life of the contract. Is this statement true?

A.

Yes, because all parties must have exactly the same goals in integrative negotiation

B.

No, because any party may leverage its own advantage during the contract

C.

Yes, because both parties have well understood each other's goals when they engage in collaborative negotiation

D.

No, because the parties will always find a compromise solution in integrative approach

Before engaging in a negotiation with a supplier of rechargeable lights, procurement team tries to visualise the breakdown of supplier's costs to calculate its break-even point. They estimate that total fixed expenses related to rechargeable electric light are $270,000 per month and variable expenses involved in manufacturing this product are $126 per unit. The supplier charges its customer $180 per unit. Within its current capacity, this supplier will make a profit at which of the following?

A.

More than 5,000 units are sold monthly

B.

Exactly 5,000 units are sold per month

C.

Exactly 1,500 units are sold monthly

D.

More than 1,500 units are sold monthly

The sourcing manager has decided to adopt an adversarial style of negotiation to take advantage of the buyer’s greater bargaining power over the suppliers. In what other circumstances should an adversarial relationship be used?

A.

When the issues concerned are non-negotiable, for example, health and safety commitments

B.

In a monopoly market as the supplier will respond by conceding quantity discounts

C.

In all forms of negotiation as each party is always trying to gain advantage over the other

D.

When the supplier is likely to respond with further concessions to maintain a long-term relationship

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Total 317 questions
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