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CIPS Managing Supply Chain Risk Sample Questions (Q79-Q84):

NEW QUESTION # 79
A supplier of non-critical items has a low credit score, Which of the following actions should be taken? Select TWO options.

  • A. inform the CEO of the company
  • B. conduct a benchmarking exercise
  • C. replace the supplier as quickly as possible with a more financially stable supplier
  • D. create a risk assessment and mitigation plan

Answer: B,D

Explanation:
Explanation
The correct answers are conduct benchmarking and create a risk assessment. This supplier provides low value and low risk products - therefore the fact they have a bad credit rating isn't too much of a risk to your company. It's worth doing a benchmarking exercise to compare their position to others in the market to see if there are any industry-wide trends, and to create a risk assessment and mitigation plan. This could involve working with the supplier to help them improve their credit score, for example by using more favourable payment terms so they have a better cash flow. There's no need to replace them immediately, and there's no need to tell the CEO- they probably have more important things to think about than a singular supplier of non-critical items See p.81


NEW QUESTION # 80
Which of the following models would be used to explore internal and external risks to a business?

  • A. Poisson Distribution
  • B. STEEPLE
  • C. Porter's 5 Forces
  • D. SWOT

Answer: D

Explanation:
Explanation
SWOT is used for this. S + W is strengths and weaknesses, which are internal risks. O+T are opportunities and threats which are external risks. See p. 12 for more information


NEW QUESTION # 81
A large multi-national corporation has just been awarded a credit rating of C by the three main credit rating agencies. What does this score signify?

  • A. low risk
  • B. average risk
  • C. substantial risk
  • D. in default

Answer: C

Explanation:
Explanation
a C grade = substantial risk. This is based on the grading system of AAA-D and is explained on p. 80.
basically anything that isn't an A is bad.


NEW QUESTION # 82
Yusef is a new procurement manager at FRD Incorporated. He is looking through the Risk Assessments for his department and notices that the cause of the risk is not identified. Why might this be?

  • A. this is a mistake - all risk assessments should specify the cause of the risk. He should raise this with his manager
  • B. the organisation has a high risk appetite
  • C. the organisation has not recorded cause for cultural reasons
  • D. the organisation has completed the risk assessments incorrectly

Answer: C

Explanation:
Explanation
This could be for cultural reasons within the company.
P. 135 states that sometimes causes of risk are not recorded as this could lead to a blame culture within the company.


NEW QUESTION # 83
ISO 20400 represents what area of business?

  • A. Quality Management
  • B. Risk Management
  • C. Supply Chain Security
  • D. Sustainable Procurement

Answer: D

Explanation:
Explanation
ISO 20400 is Sustainable Procurement. This is from p. 51 of the study guide- as well as learning what the ISO numbers are, do also learn the key areas of each ISO as these come up in the exam.


NEW QUESTION # 84
......

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