NEW L4M5 TEST PRICE, VALID DUMPS L4M5 BOOK

New L4M5 Test Price, Valid Dumps L4M5 Book

New L4M5 Test Price, Valid Dumps L4M5 Book

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Tags: New L4M5 Test Price, Valid Dumps L4M5 Book, Premium L4M5 Files, Interactive L4M5 Course, Updated L4M5 CBT

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CIPS L4M5 Certification is recognized globally as a mark of excellence in commercial negotiation. It is an industry-standard qualification that demonstrates a high level of expertise and professionalism in this field. By obtaining this certification, professionals can enhance their career prospects, increase their earning potential, and gain a competitive advantage over their peers.

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CIPS L4M5 (Commercial Negotiation) Exam is designed to assess the knowledge and skills of procurement professionals in the area of commercial negotiation. L4M5 exam focuses on the key principles and techniques of negotiation, which are essential for procurement professionals to achieve the best possible outcomes for their organizations. L4M5 Exam covers a wide range of topics, including negotiation strategies, tactics, and techniques, as well as the legal and ethical considerations that must be taken into account during the negotiation process.

CIPS Commercial Negotiation Sample Questions (Q185-Q190):

NEW QUESTION # 185
Where there are high levels of commitment to relationships between both the buyer and supplier, this is seen as collaborative and beneficial to negotiations. Is this statement correct?

  • A. Yes, characteristics include arm's length transactions and minimal communication
  • B. No, collaboration does not require commitments from either side
  • C. No, this can be classified as adversarial
  • D. Yes, characteristics include risk management and strategic planning

Answer: D

Explanation:
A collaborative relationship is characterized by mutual commitment, which enhances risk management and strategic planning between buyer and supplier. High levels of trust and commitment enable both parties to work closely to achieve shared objectives, creating a beneficial negotiation environment. This approach aligns with CIPS's principles of collaborative procurement relationships.


NEW QUESTION # 186
What is the most likely outcome when two organisations with adversarial relationship negotiate with each other?

  • A. Lose lose
  • B. Win win
  • C. Deadlocked
  • D. Win lose

Answer: D

Explanation:
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.


NEW QUESTION # 187
The trust is built based on the other party's professional qualifications or proven or certified technical capability or experience is known as...?

  • A. Competence trust
  • B. Irrevocable Trust
  • C. Goodwill trust
  • D. Contractual trust

Answer: A

Explanation:
Trust is the expectation that the other party will behave in a predictable and mutually acceptable way. In inter-firm relationships, the presence and absence of trust can affect the level of cost in a relationship. The existence of trust is taught to lower the transaction cost in a relationship. Dr. Mari Sako identified taxonomy of
3 types of trust in commercial relationship, which is very useful from the perspective of procurement.
Contractual trust: Trust based on the contract with TOP. This is potentially the weakest source of trust if there is nothing else to base the trust on, but it is the quickest to establish.
Competence trust: Trust based on TOP's professional qualifications or proven or certified technical capability or experience.
Goodwilltrust: Trust based on knowing TOP has your interest at heart and will not behave opportunistically.
This is potentially the strongest type of trust, but it takes the longest time to build.


NEW QUESTION # 188
A new manager has been appointed with responsibility for an organisation's category which has major impact on organisational cost base and there are little competitions in the supply market. They have an objective to improve supplier cost structures over time. Which of the following should they carry out first?

  • A. Volume concentration
  • B. Competitive rivalry analysis
  • C. Purchase price cost analysis
  • D. STEEPLE analysis

Answer: C

Explanation:
:
The objective of the buyer here is to improve supplier cost structures over time, which requires them to have insight into supplier's current cost information. Purchase price cost analysis (PPCA) can help here. PPCA is a method for gathering, analysing and using price and cost information in a systematic way. The process allows the identification of future savings and opportunities to improve current costs.
STEEPLE analysis is used to analyse the macro environment that may have impact on an organisation.
Competitive rivalry is a part of Porter's Five Forces which is a tool for strategy making.
Volume concentration is a way to increase the purchasing quantities in order for a buying organisation to improve its leverage in negotiation.


NEW QUESTION # 189
An oil refinery plant imports much of its crude oil from overseas. A procurement manager in the refinery suggests that fixing the crude oil contract price for 36 months would be beneficial for the company. Would this be a right thing to do?

  • A. Yes, the supplier would bear the risk when the material price increased
  • B. No, fixed price should be only applied to contracts that last 60 months or longer
  • C. No, the refinery would not be able to reap the benefits from falling commodity price and currency rates
  • D. Yes, financial budgeting task would be a lot easier with fixed pricing arrangement

Answer: C

Explanation:
Fixed price contract is the contract in which the price is static throughout the contract period. A fixed-price contract may give certainty to budget and simplify contract management. However, it may lead to other problems since it requires bidders to estimate and bear the financial risks associated with price escalations. If the estimates are too high or events do not materialize, the buyer will pay a steep price that may affect the economy and efficiency of the contract. In the worst case, it may mean that the bid price is then above budget and may lead to a reduction in the requirements or rebidding. If the estimates are too low, it may appear as an abnormally low bid and disrupt contract execution.
On the other hand, price adjustment provisions include formulas designed to address problems, and can protect both the borrower and contractors from price fluctuations. Price adjustment formulas allow contractors to offer more realistic prices at the time of bidding. Despite concerns that they may lead to budget uncertainties, price adjustment formulas will estimate the actual cost implications that will be encountered.
They use indexes that can be used for cost projection.
According to Asia Development Bank (ADB), any contract with a delivery or completion period beyond 18 months should contain an appropriate price adjustment clause.
In the scenario, the crude oil contract is planned to last 36 months. This period is pretty long with a fluctuating commodity. Therefore, the company should use price adjustment agreement.


NEW QUESTION # 190
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