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CIPS L5M2 Managing Supply Chain Risk Exam Practice Test

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Total 120 questions

Managing Supply Chain Risk Questions and Answers

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Question 1

Who takes ownership for a Business Continuity Plan?

Options:

A.

the top level of an organisation

B.

the department head

C.

the risk champion of the company

D.

the individuals who identify the risks

Question 2

What is the purpose of a Disaster Recovery Plan?

Options:

A.

to get critical systems operational

B.

to detect and react to an emergency situation, focusing on people's safety

C.

to return to business as usual

D.

to increase output to normal levels following a disaster

Question 3

Which of the following insurances would provide cover in the eventuality that your supplier's place of business flooded and this affected your deliveries?

Options:

A.

business interruption insurance

B.

contingent business interruption insurance

C.

public liability insurance

D.

property insurance

Question 4

Which of the following is an example of hedging?

Options:

A.

dual-sourcing

B.

insurance

C.

audits

D.

risk assessments

Question 5

Which of the following are benefits of ISO28000? Select TWO.

Options:

A.

competitive advantage

B.

cost saving

C.

increased market share

D.

decreased legal costs

Question 6

In probability theory, the chances of a coin landing on heads would be expressed in what way?

Options:

A.

50%

B.

one half

C.

0.5

D.

50-50

Question 7

What would happen if a company enacts its Contingency Agreement following a natural disaster?

Options:

A.

they will receive a financial pay-out

B.

they will receive operational help from a third party

C.

they will be able to claim on insurance

D.

they will be able to breach any contracts that it has

Question 8

Which of the following will you put into box 5?

Options:

A.

service credits

B.

NDA

C.

Conformance Specification

D.

Force Majeure

Question 9

Which of the following statements about binomial distribution are true? Select THREE

Options:

A.

there are only two outcomes

B.

they are based on continuous events

C.

there is only one outcome per event

D.

each trial has the same probability

E.

the events of one trial will impact on the next one

Question 10

Which of the following will you put into box 4?

Options:

A.

hazard

B.

financial

C.

strategic

(Correct)

D.

operational

Question 11

In an emergency situation, put the following phases into chronological order as to when they would be activated 1) disaster recover plan 2) incident response 3) business continuity plan

Options:

A.

1, 2, 3

B.

1, 3, 2

C.

2, 1, 3

D.

3, 1, 2

Question 12

What is the purpose of an indemnity clause within a contract?

Options:

A.

to assign risk to each party

B.

to ensure both parties are adequately insured if something were to go wrong

C.

to transfer risk from one party to another

D.

to explain what would happen in the case of a force majeure

Question 13

Which of the following will you put into box 1?

Options:

A.

strategic

B.

intellectual property

(Correct)

C.

environment

D.

operational

Question 14

Which of the following is not an internal risk for a business who imports raw materials from abroad?

Options:

A.

technology malfunction

B.

procurement fraud

C.

loss of customer data

D.

changes to import levies

Question 15

When would a company use the Stakeholder Salience Model?

Options:

A.

to engage stakeholders in the development of risk assessments

B.

to inform stakeholders of potential risks

C.

to show stakeholders how the company will mitigate risks

D.

as part of a disaster recovery plan

Question 16

Which of the following will you put into box 2?

Options:

A.

strategic

B.

intellectual property

C.

environment

D.

operational

Question 17

ISO 31000 is built on 11 guiding principles. Identify THREE of these.

Options:

A.

Risk management can create value

B.

Risk Management should take into account company culture

C.

Risk Management should address uncertainty faced by the organisation

D.

Risk Management should be done annually

E.

Risk Management should include only the Departments affected by risk

Question 18

Oliver is a procurement manager and he is trying to work out the likelihood that a supplier fails to deliver to the warehouse two days in a row. Which of the following methodologies should Oliver use?

Options:

A.

value at risk

B.

normal distribution

C.

binomial distribution

D.

Poisson Distribution

Page: 1 / 12
Total 120 questions