Free L5M2 – Managing Supply Chain Risk Practice Test Question

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  it is held at the top level

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  it contains more detail than a business continuity plan

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  the focus is to return a company to making a profit after a disaster

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  it can be structured using a standardised framework

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  it is based on the principle of continuous improvement

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  it encourages businesses to see quality from the viewpoint of the customer

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  it aims to ensure sustainability within the supply chain

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  It complements ISO 20400

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  it helps businesses to identify areas of potential risk and mitigate these accordingly

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  low risk / high reward

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  high risk/ high reward

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  low risk/ low reward

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  high risk/ low reward

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  quote in the supplier's currency

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  quote in the buyer's currency

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  use a forward exchange contract

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  fix the exchange rate at the current rate

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  the goal of risk management is to reduce risks to 0

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  risk management is a continuous process

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  risk management is an activity that is conducted by a business once a year

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  risk management can help companies ensure the smooth and successful running of purchase and supply operations

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  risk management is the process by which all risks are either treated or transferred

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  to protect the environment

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  to ensure high levels of ethical practice with regards to working conditions

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  to encourage transparency in financial reporting

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  to ensure that products that reach the market are fit for purpose

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  rating of 1-5

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  impact analysis

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  4 Ts

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  monetary value

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  133 of the study guide says 'it is also possible for organisation to use a quantative method where they quantify the loss in terms of monitory value instead of an impact figure'. Rating 1-5 is incorrect because this is the same as an impact scale. Impact analysis is wrong because this isn't quantative. 4Ts are the ways you can mitigate risks.

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  internal risk

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  external risk

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  procurement risk

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  economic risk

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  to assist a buyer in selecting the correct insurance

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  to advise required insurance levels for a contract

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  to evaluate insurance applications

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  to determine the validity of an insurance claim

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  new technology
  (Correct)

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  forward contract

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  outsource

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  insurance