CPL CPL Risk Management & Business Continuity 1

Question 1

Which risk management strategy involves shifting potential losses to a third party, such as an insurance provider or contract carrier?

Accepted Answer

Risk transfer

Answer

Risk transfer moves the financial burden of a potential loss to another party, commonly through insurance or contractual clauses.

Question 2

A supply chain disruption that originates from a single supplier failure and cascades through multiple tiers is best described as which type of risk?

Accepted Answer

Supply-side risk

Answer

Supply-side risk refers to disruptions originating from suppliers or upstream partners that affect the flow of goods or materials.

Question 3

The primary purpose of a Business Continuity Plan (BCP) in logistics is to:

Accepted Answer

Ensure critical supply chain functions can continue during a disruption

Answer

A BCP defines procedures and resources needed to sustain critical logistics functions when normal operations are interrupted.

Question 4

Which metric is used to measure how long an organization can tolerate a disruption before critical operations are irreparably affected?

Accepted Answer

Maximum Tolerable Downtime (MTD)

Answer

Maximum Tolerable Downtime (MTD) defines the longest period a business process can be disrupted before causing unacceptable consequences.

Question 5

Dual sourcing in supply chain risk management primarily helps to:

Accepted Answer

Decrease dependence on a single supplier and reduce supply disruption risk

Answer

Dual sourcing spreads supply risk by maintaining relationships with at least two suppliers for critical materials or components.

(CPL) Certified Professional Logistician Practice Test