BCM Supply Chain Continuity & Third-Party Risk Management 3

Question 1

What typically qualifies a supplier as 'critical' within a BCM program?

Accepted Answer

Suppliers whose disruption would prevent the organization from meeting its Minimum Business Continuity Objective (MBCO)

Answer

Suppliers with annual contract values exceeding $1 million

Answer

Suppliers located in geographically high-risk regions

Answer

Suppliers that have maintained the relationship for more than ten years

Question 2

Which approach involves qualifying and contracting with alternative suppliers BEFORE a disruption occurs?

Accepted Answer

Proactive supplier pre-qualification and diversification

Answer

Reactive emergency sourcing

Answer

Spot market purchasing during a crisis event

Answer

Just-in-time emergency procurement activation

Question 3

What is 'supply chain mapping' in the context of BCM planning?

Accepted Answer

Documenting and visualizing all supplier tiers, interdependencies, and critical material flows

Answer

Creating geographic maps showing supplier facility locations for logistics planning

Answer

Tracking shipments in real-time using GPS and IoT sensor technology

Answer

Plotting supply and demand forecasting curves for critical raw materials

Question 4

Which document formally specifies the continuity and recovery requirements that suppliers must contractually commit to meeting?

Accepted Answer

Supplier Business Continuity Agreement or BCM Schedule

Answer

Standard Statement of Work (SOW)

Answer

General Master Service Agreement boilerplate language

Answer

Supplier Code of Conduct policy

Question 5

What does 'reshoring' mean as a supply chain resilience strategy?

Accepted Answer

Returning previously offshored production or sourcing back to the domestic market

Answer

Moving supplier relationships to shore-based coastal distribution facilities

Answer

Rotating suppliers on a scheduled basis to reduce single-supplier dependency

Answer

Establishing secondary storage facilities near coastlines for faster distribution

Question 6

Which risk category is specifically associated with concentrating critical material sourcing in a single foreign country?

Accepted Answer

Geopolitical and sovereign risk

Answer

Transportation cost and logistics risk

Answer

Currency exchange and hedging risk

Answer

Supplier performance and quality risk

Question 7

What is the primary BCM purpose of conducting regular audits of critical suppliers?

Accepted Answer

To verify that suppliers maintain adequate BCM capabilities and meet contractual continuity requirements

Answer

To renegotiate supplier contracts at competitive market rates

Answer

To assess supplier pricing competitiveness against market alternatives

Answer

To identify new product or service opportunities with existing suppliers