CIPS L5M2 Exam - Topic 5 Question 48 Discussion

Actual exam question for CIPS's L5M2 exam

Question #: 48
Topic #: 5

[All L5M2 Questions]

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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Jamie

3 months ago

Definitely go with A! Third-party insights are usually more reliable.

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Gaynell

3 months ago

D sounds good, but how thorough can their info be?

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Sue

3 months ago

Wait, can we really trust the info they provide? Sounds sketchy.

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Kristine

4 months ago

I think option C is better. Relying on their info seems risky.

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Keith

4 months ago

A credit rating agency is a solid choice for financial stability checks.

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Justine

4 months ago

I’m torn between C and D. I remember we talked about the importance of thorough assessments, but I’m not sure if just relying on tender info is enough.

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Arlie

4 months ago

I practiced a similar question where we had to evaluate suppliers. I feel like using a risk management consultant could give a more comprehensive view, so maybe B is the way to go?

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Victor

4 months ago

I think conducting a credit check based on the supplier's tender info could be risky. They might not provide all the necessary details. Option C feels a bit too reliant on the supplier's honesty.

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Yuette

5 months ago

I remember we discussed the importance of using third-party agencies for credit ratings in class. Option A seems like a solid choice, but I'm not entirely sure if it's the only way to assess financial stability.

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Rusty

5 months ago

Option D seems like the way to go here. Conducting a risk assessment based on the supplier's information is a good way to evaluate their stability and potential risks. I think that's a more thorough approach than just a simple credit check.

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Christiane

5 months ago

For this type of question, I'd recommend option A. Using a credit rating agency is the best way to get an independent, comprehensive assessment of the supplier's financial situation. That's going to be more reliable than just relying on the information they provide.

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Kayleigh

5 months ago

I'm a bit unsure about this one. Should I go with option C and just do a credit check based on the information the supplier provides? Or is option A better since it involves a third-party? I'll have to think this through carefully.

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Denny

5 months ago

Hmm, this seems like a straightforward question about assessing a supplier's financial stability. I think I'll go with option A - using a third-party credit rating agency. That seems like the most reliable way to get an objective assessment.

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Jeannine

1 year 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

1 year 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

1 year 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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