Certification in Supplier Diversity Practice Exam

What is a financial measure for assessing diverse suppliers?

1. Availability of additional working capital

2. Competition landscape

3. Market share growth

4. Supplier training effectiveness

The correct answer is: Availability of additional working capital

The availability of additional working capital is a critical financial measure for assessing diverse suppliers because it directly impacts their operational capacity and growth potential. Working capital is the difference between a company’s current assets and current liabilities; it reflects a supplier's short-term financial health and indicates their ability to cover day-to-day expenses. A diverse supplier with sufficient working capital is better positioned to invest in necessary resources, fulfill contracts, and respond to unexpected challenges without jeopardizing operations. This financial stability not only ensures reliability in fulfilling orders but also allows suppliers to pursue growth opportunities, which is important for both their success and the success of the organizations that choose to partner with them. In contrast, while the competition landscape, market share growth, and supplier training effectiveness are important aspects of supply chain evaluation, they do not specifically quantify the immediate financial health and operational readiness of a diverse supplier in the same direct manner as assessing their working capital availability.