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The L4M5 Commercial Negotiation Certification Exam offered by CIPS is an excellent opportunity for procurement and supply chain professionals looking to enhance their negotiation skills and develop a strategic approach to negotiating commercial contracts. Commercial Negotiation certification is globally recognized and can help individuals advance in their careers while ensuring that organizations have the necessary skills to negotiate effectively and get the best deals for their organization.
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NEW QUESTION # 144
A supplier's mark-up on all products is 25%. Supplier's profit margin is...?
Answer: B
Explanation:
Explanation
Table Description automatically generated with medium confidence
Text Description automatically generated with low confidence
LO 2, AC 2.1
NEW QUESTION # 145
Which of the following is mostlikely to be a reason why a supplier charges its customer higher price after it has reached the break-even point?
Answer: B
Explanation:
Explanation
'Supplier may want to encourage buyer's demand': the buyer tends to prefer lower price, if supplier wants to encourage its customers tobuy more, it needs to offer discount at bulk amount. So this option is not acceptable.
'Supplier may have high fixed cost - variable cost ratio': Supplier with high fixed cost needs high volumes to break even, but once achieved, it may be able to offer significant discounts for bulk orders
'The supplier may have reached economy of scale': when economy of scale is reached, cost per unit will be minimal which often leads to more favourable price.
'Supplier may need to open new facilities to meet increasing customer's demand': Increasing customer's demands may excess supplier's current capacity. Therefore, supplier may need to extend its capacity by investing more in facilities. To cover these fixed cost investment, supplier may charge higher price.
LO 2, AC 2.1
NEW QUESTION # 146
Which type of question is most effective for checking facts in negotiation?
Answer: B
Explanation:
Closed questions (requiring yes/no or factual answers) are best for verifying facts, ensuring clarity and accuracy. Open questions are useful for exploration, while hypothetical test possibilities, and leading steer responses. In negotiation, closed questions confirm details such as prices, quantities, or deadlines, preventing ambiguity in agreements. CIPS stresses using the full range of question types strategically, with closed questions essential in finalising commitments.
Reference: CIPS L4M5 (2nd ed.), LO 3.2 - Questioning techniques: closed vs open vs hypothetical.
NEW QUESTION # 147
In a detailed cost breakdown, a company has a salary cost of 9%, raw materials cost 51% and overheads cost
24%. Which of the following represents themark-up of that company?
Answer: C
Explanation:
Explanation
Mark-up is the amount added to the cost of an item to get to its selling price and is expressed as a percentage.
Mark-up(%) = (Price - Cost) / Cost x 100
= (100 - 9 - 51 - 24) / (9 +51 +24) x 100 = 16 / 84 x 100 = 19.04%
LO 2, AC 2.1
NEW QUESTION # 148
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?
Answer: D
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 # 149
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