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CIPS L4M5 Exam Questions
- Topic 1: Analyse the application of commercial negotiations in the work of procurement and supply/ Negotiation in relation to the stages of the sourcing process
- Topic 2: Understand key approaches in the negotiation of commercial agreements with external organisations/ Sources of conflict that can arise in the work of procurement and supply
- Topic 3: Team management and the influence of stakeholdebest alternative to a negotiated agreement (BATNA)rs in negotiations/ Definitions of commercial negotiation
- Topic 4: Setting targets and creating a / Collaborative win-win integrative approaches to negotiations
- Topic 5: Differentiate between the types of approaches that can be pursued in commercial negotiations/ Distributive win-lose, distributive approaches to negotiation
- Topic 6: Organisational power: comparing the relative power of purchasers and suppliers/ Explain how the balance of power in commercial negotiations can affect outcomes
- Topic 7: How purchasers can improve leverage with suppliers/ The importance of power in commercial negotiations
- Topic 8: Building relationships based on reputation, and trust/ Repairing a relationship/ The relationship spectrum
- Topic 9: Identify the different types of relationships that impact on commercial negotiations/ Pragmatic and principled styles of negotiation
- Topic 10: Costing methods such as absorption, marginal or variable and activity-based costing/ Know how to prepare for negotiations with external organisations
- Topic 11: Macroeconomics and its influence on commercial negotiations/ Contrast the economic factors that impact on commercial negotiations
- Topic 12: Setting objectives and defining the variables for a commercial negotiation/ Use of telephone, teleconferencing or web-based meetings
- Topic 13: How behaviours should change during the different stages of a negotiation/ Compare the key communication skills that help achieve desired outcomes
- Topic 14: Analyse how to assess the process and outcomes of negotiations to inform future practice/ Protecting relationships after the negotiation
Free CIPS L4M5 Exam Actual Questions
Note: Premium Questions for L4M5 were last updated On Feb. 21, 2026 (see below)
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 the mark-up of that company?
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
A building firm has been awarded a contract to build a new office block, and the
building firm needs to separate its direct and indirect costs.
Which one of the following is a direct cost to the building of the new office block?
A procurement manager is preparing for a negotiation with an important supplier. He plans to withhold some crucial information so that his company gains the upper hand in the negotiation. Is this correct when considering using integrative approach to the negotiation?
:
Integrative negotiation is a negotiation strategy in which the involved parties work together to find a solution that satisfies the needs and concerns of each. This process often involves group brainstorming and creative thinking for individuals to suggest different ideas that benefit both parties.
Compromising is often common in integrative negotiation, and both sides may need to give up certain needs to reach a solution. Honesty can also promote successful integrative negotiation because it can lead to a comprehensive understanding of the issue and what each party needs to be satisfied with the result.
CIPS study guide page 29-31
Integrative Negotiation: Definition, Tips and Examples | Indeed.com
Which of the following is the true statement?
:
Internal stakeholder support will be important not just at the initial negotiation of the contract, but potentially throughout the life of the contract right through to exit.
As a general rule, connected stakeholders (with the exception of suppliers) have a low level of influence on procurement negotiations.
Suppliers are connected stakeholders who have contractual relationships with the organisation.
Commercial negotiation objective should be driven by the business needs of the organisation, and not just the instinct of procurement.
Which of the following are internal factors when a supplier is making its pricing decision?
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