CIPS COMMERCIAL
NEGOTIATION L4M5
PRACTICE TEST
COMPLETE 60Q
Question 1: A buyer and supplier have di�erent preferred delivery schedules but both want to preserve the relationship. What best describes the purpose of commercial negotiation?
Choices:
1) To force the supplier to accept the buyer's position 2) To reach an acceptable agreement through communication and exchange 3) To remove all di�erences between the parties before discussion 4) To ensure both parties obtain exactly equal �nancial value Correct Answer: To reach an acceptable agreement through communication and exchange Explanation: Commercial negotiation is a process in which parties with di�ering interests communicate to reach an acceptable agreement. Success does not require identical positions or equal gains.Page 1
Question 2: At which point in the procurement cycle is the buyer most likely to
decide the negotiation objectives, resources and overall approach before engaging suppliers?
Choices:
1) Contract performance review 2) Supplier relationship management 3) Developing the sourcing strategy or plan 4) End-of-contract transition
Correct Answer: Developing the sourcing strategy or plan
Explanation: The sourcing strategy or planning stage is where the organisation decides whether and what to negotiate, sets objectives and considers the resources and approach required.
Question 3: A negotiation becomes tense because the parties disagree about who
may speak �rst, how long each agenda item should take and who has authority to approve concessions. These disagreements mainly concern what?
Choices:
1) The supplier's cost structure 2) The substantive content of the deal 3) The buyer's BATNA 4) The negotiation process
Correct Answer: The negotiation process
Explanation: Agenda, governance, speaking order and authority are process issues: they concern how the negotiation is managed rather than the commercial substance being negotiated.Page 2
Question 4: A procurement manager is negotiating a complex maintenance contract
and needs immediate con�rmation of engineering tolerances. Who is the most useful additional team member?
Choices:
1) A technical subject-matter expert 2) An accounts-payable clerk with no technical knowledge 3) An external salesperson from another supplier 4) A receptionist from the buyer's organisation
Correct Answer: A technical subject-matter expert
Explanation: A technical subject-matter expert can validate engineering facts and requirements during the negotiation, reducing the risk of agreeing terms that are technically unworkable.
Question 5: Before arranging a full-day negotiation for a low-value routine
purchase, what should the buyer consider �rst?
Choices:
1) Whether the supplier has a larger negotiation team 2) Whether the meeting room has a board table 3) Whether the likely bene�t justi�es the preparation and sta� time required 4) Whether the buyer can obtain the supplier's internal salary data Correct Answer: Whether the likely bene�t justi�es the preparation and sta� time required Explanation: Negotiation consumes time and resources. For a low-value routine purchase, the buyer should consider whether the expected commercial bene�t justi�es the cost of preparing and conducting the negotiation.Page 3