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Free CIPS L4M5 Exam Braindumps (page: 35)

Page 14 of 70
PDF with 275 Questions

Any commercial negotiation process has only three potential stakeholders: procurement, the budget holders, and the users. Is this TRUE?

  1. Yes, and the budget holder is the most important one because of the finances involved
  2. Yes, the role of procurement is to ensure that the technical specifications are fit for purpose
  3. No, only procurement, the user, and suppliers have an interest in the products negotiated
  4. No, other stakeholders, such as directors, and IT might also be interested in the negotiation outcomes

Answer(s): D

Explanation:

Other stakeholders, including directors, IT, and finance departments, often have an interest in procurement negotiations, particularly when the contract impacts strategic objectives, IT infrastructure, or organizational operations. This broader stakeholder involvement aligns with CIPS's emphasis on inclusive stakeholder management in procurement to ensure well-rounded decision- making.



John Browne, a junior buyer for a corporation, is analyzing the global supply market before undertaking negotiations and is wondering whether foreign exchange rates are important to factor into his research. Should John consider the foreign exchange rates?

  1. No, as they only affect the bank's interest rates for loans
  2. Yes, only if the organization can handle foreign currencies in their accounts
  3. Yes, as they can affect profit and turnover
  4. No, exchange rates only apply to the national economy

Answer(s): C

Explanation:

Foreign exchange rates impact import costs, profit margins, and overall turnover when transactions are conducted in foreign currencies. Understanding these fluctuations allows buyers to anticipate changes in purchasing costs, supporting informed decision-making, as highlighted in CIPS guidance on global procurement considerations.



A garden furniture supplier who is currently in negotiations for a high-value contract has offered the procurement manager a visit to their site. The supplier suggests that during this visit, they can undertake the contract negotiation.
What would be an appropriate response from the procurement manager?

  1. Accept the offer as this would be an ideal opportunity to see what the supplier can offer and will provide the supplier with familiarity while negotiating
  2. Accept the offer as this would save time; a supplier visit and negotiation could be done at the same time
  3. Decline the offer as it would take too much time to go and visit the supplier
  4. Decline the offer as negotiating while on a site visit will provide the supplier with an unfair advantage, as they will be in a familiar environment

Answer(s): D

Explanation:

Negotiating at the supplier's site can give the supplier a psychological advantage due to their familiarity with the setting. To ensure a neutral and balanced negotiation environment, it's preferable to conduct negotiations in a neutral location or through structured channels, as recommended in CIPS's guidance on negotiation settings.



An organization should develop different relationships which are appropriate to each supplier situation.
Which ONE of the following analysis methods could help to identify these?

  1. Resources and cost spectrum
  2. The relationship spectrum
  3. The color spectrum
  4. A spectrum of non-critical items

Answer(s): B

Explanation:

The relationship spectrum categorizes supplier relationships based on factors like strategic importance, allowing organizations to tailor their approach to each supplier relationship. CIPS emphasizes the relationship spectrum as a valuable tool for assessing and managing supplier interactions based on strategic relevance.






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