Describe procurement risk management strategies (e.g., multiple suppliers, supplier audits).

• A. Use multiple vetted suppliers, maintain approved vendor lists, perform regular supplier evaluations, and have backup options
• B. Have no backup options
• C. Use a single supplier
• D. Avoid supplier evaluations

Answer: (A)

Procurement risk management focuses on building resilience into sourcing so operations aren’t disrupted by supplier problems. Using multiple vetted suppliers spreads dependence, so if one source trips up—due to a strike, delay, quality issue, or price spike—you still have other options to meet demand. Maintaining an approved vendor list speeds up finding reliable partners and keeps your sourcing choices aligned with quality, compliance, and safety standards. Regular supplier evaluations track performance over time—delivery reliability, quality of goods, responsiveness, and financial health—so you can spot issues early and take corrective actions or adjust sourcing accordingly. Having backup options, including contingency plans and spare suppliers, ensures you can continue operations even if a primary supplier cannot fulfill an order. Supplier audits are a key part of this approach, giving you a clear view of a supplier’s quality systems, processes, regulatory compliance, and risk controls, which helps you select and retain partners that won’t introduce surprises into the supply chain.

Choosing options that rely on a single supplier, avoid evaluations, or reject backups would leave you exposed to disruptions and quality problems, making it harder to maintain consistent service and costs.