CPSM CPSM Risk Management & Compliance

Question 1

In supply chain risk management, a 'single-source' supplier strategy primarily creates which type of risk?

Accepted Answer

Supply continuity risk

Answer

Demand risk

Answer

Currency risk

Answer

Quality risk only

Question 2

Which risk mitigation strategy involves transferring supply risk to a third party through insurance or contractual penalties?

Accepted Answer

Risk transfer

Answer

Risk avoidance

Answer

Risk acceptance

Answer

Risk reduction

Question 3

A supply manager is assessing a supplier's financial health. Which metric best indicates a supplier's short-term liquidity?

Accepted Answer

Current ratio

Answer

Debt-to-equity ratio

Answer

Return on assets

Answer

Gross margin

Question 4

What is the primary purpose of the US Foreign Corrupt Practices Act (FCPA) in supply management?

Accepted Answer

To prohibit US companies from bribing foreign government officials to obtain business

Answer

To regulate import tariffs on foreign goods

Answer

To mandate disclosure of foreign supplier ownership

Answer

To restrict technology exports to certain countries

Question 5

In supply chain risk management, a 'business continuity plan' (BCP) is best described as:

Accepted Answer

A documented strategy to maintain critical operations during and after a disruptive event

Answer

A financial reserve for unexpected costs

Answer

An insurance policy against supply chain failures

Answer

A supplier qualification checklist

Question 6

What does the Conflict Minerals rule under the US Dodd-Frank Act require of supply managers?

Accepted Answer

Due diligence to determine if products contain tin, tantalum, tungsten, or gold sourced from conflict regions

Answer

Prohibition of all mineral imports from Africa

Answer

Mandatory sourcing from US domestic mineral suppliers

Answer

Annual audit of all tier-1 suppliers for mineral use