CIPS Exam L5M2 Topic 5 Question 48 Discussion

Actual exam question for CIPS's L5M2 exam

Question #: 48
Topic #: 5

Zara is a procurement manager who is thinking about working with a new supplier to source buttons for her clothes manufacturing business. Her manager has asked her to do some due diligence on the supplier's financial stability. What should she do?

Ause an outsourced third-party credit rating agency

Buse an outsources third-party risk management consultant

Cconduct a credit check on the supplier based on the information provided by them in the tender

Dconduct a risk assessment based on the information provided by the supplier in the tender

Show Suggested Answer

Suggested Answer: A

She should use a credit rating agency for this. She should not do this herself as she won't have access to accurate information like an agency will. The supplier may not have been truthful in their tender. For information on Credit Rating Agencies see p.79

by Elvis at Nov 17, 2024, 07:51 AM

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Jeannine

1 days ago

I disagree, I think Zara should conduct a risk assessment based on the information provided by the supplier in the tender. It would give a more comprehensive view of the supplier's overall risk profile.

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Sonia

3 days ago

I agree with Ernest, using a credit rating agency would provide a more objective assessment of the supplier's financial stability.

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Leatha

14 days ago

I'm going with A, because I don't want to risk my career on a shaky supplier. Unless it's a supplier of clown shoes, then I'd go with B just for the laughs.

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