Supply Chain Risk Management Flashcards

Which of the following is the best example of a supply chain risk that comes from outside the organization's network?

Answer: A regional earthquake that shuts down ports

Natural disasters come from the external environment and lie outside the control of supply chain partners.

Single sourcing a critical part mainly increases which type of risk?

Answer: Supply disruption risk

Relying on one supplier creates a single point of failure if that supplier is disrupted.

A U.S. importer signs a forward contract to lock in the exchange rate for a future payment in euros. What risk is being managed?

Answer: Foreign exchange risk

Forward contracts hedge against unfavorable changes in currency exchange rates.

Which tool maps a supply network past tier 1 suppliers to find hidden sources of disruption?

Answer: Multi-tier supplier mapping

Multi-tier mapping shows sub-tier suppliers whose failures could spread upstream to the firm.

Time to recover (TTR) in supply chain risk analysis refers to:

Answer: The time a node needs to return to full function after a disruption

TTR measures how long a disrupted supplier or facility takes to get back to full capability.

Which characteristic best describes a resilient supply chain?

Answer: It can absorb disruptions and recover quickly

Resilience is the ability to withstand, adapt to, and recover from disruptions.

The bullwhip effect mainly creates which supply chain risk?

Answer: Distorted demand signals that amplify upstream

The bullwhip effect amplifies order variability upstream, which leads to excess inventory or shortages.