CPL CPL Risk Management & Business Continuity 2

Question 1

Which of the following is an example of a proactive risk mitigation strategy in logistics?

Accepted Answer

Conducting supplier audits before awarding contracts

Answer

Supplier audits conducted before awarding contracts identify risks before they materialize, making them a proactive mitigation approach.

Question 2

In the context of supply chain risk, 'demand variability' refers to:

Accepted Answer

Unpredictable changes in customer order volumes or patterns

Answer

Demand variability describes the degree to which customer demand fluctuates, creating challenges for inventory planning and capacity management.

Question 3

A company that maintains excess inventory specifically to absorb supply chain disruptions is using which risk strategy?

Accepted Answer

Buffer stock as a risk hedge

Answer

Buffer or safety stock acts as a risk hedge by providing inventory cushion to continue operations when supply disruptions occur.

Question 4

Which of the following scenarios best illustrates 'force majeure' in a logistics contract?

Accepted Answer

A shipment delayed because of a major hurricane

Answer

Force majeure refers to extraordinary events beyond a party's control, such as natural disasters, that excuse performance of contractual obligations.

Question 5

The process of identifying, evaluating, and prioritizing risks in a supply chain, followed by applying resources to minimize their impact, is called:

Accepted Answer

Risk management

Answer

Risk management is the structured process of identifying, assessing, and mitigating potential threats to supply chain performance.

(CPL) Certified Professional Logistician Practice Test