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Risk Management & Regulatory Compliance Flashcards

6 cards from real CLA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Supply chain risk management (SCRM) begins with which foundational step?

    Answer: Identifying and mapping potential risks across the entire supply chain

    Effective SCRM starts with a comprehensive risk assessment that identifies vulnerabilities at each node and link of the supply chain before mitigation strategies are developed.

  2. A business continuity plan (BCP) in logistics is designed to:

    Answer: Ensure critical supply chain operations can continue or recover quickly after a disruptive event

    A BCP documents the procedures, resources, and responsibilities needed to maintain or restore logistics operations after events such as natural disasters or supplier failures.

  3. Incoterms (International Commercial Terms) published by the ICC primarily define:

    Answer: The responsibilities, costs, and risk transfer points between buyer and seller in international trade

    Incoterms provide standard three-letter codes (e.g., FOB, CIF, DDP) that specify who pays for freight, insurance, and customs, and exactly where risk transfers from seller to buyer.

  4. The Customs-Trade Partnership Against Terrorism (C-TPAT) program in the US requires participating importers to:

    Answer: Implement supply chain security measures and validate the security practices of their foreign partners

    C-TPAT is a voluntary CBP program that provides trade benefits to companies that meet strict supply chain security standards and vet their overseas partners.

  5. The Harmonized System (HS) code is used in international trade to:

    Answer: Classify products for customs purposes and determine applicable duty rates

    HS codes are internationally standardized numerical codes assigned to every product category, used by customs authorities worldwide to levy duties and collect trade statistics.

  6. Which type of supply chain risk arises from a single-source supplier being unable to deliver due to a natural disaster or facility fire?

    Answer: Supply disruption risk

    Supply disruption risk materializes when a supply source is unexpectedly interrupted, making single-sourced items especially vulnerable to catastrophic supply failure.