CRP CRP Supply Chain Resilience & Vendor Management 2 — Questions and Answers
Question 1: In supply chain resilience, what is the purpose of geographic diversification of suppliers?
- To comply with import tariff rules
- To reduce exposure to regional disasters, political instability, or weather events (Correct answer)
- To lower transportation costs
- To simplify contract management
Correct answer: To reduce exposure to regional disasters, political instability, or weather events
Geographic diversification ensures a regional disruption such as a hurricane or political crisis does not simultaneously disable multiple suppliers.
Question 2: Which document formally defines service expectations, recovery objectives, and penalties for a vendor relationship?
- Non-Disclosure Agreement (NDA)
- Service Level Agreement (SLA) (Correct answer)
- Master Service Agreement (MSA)
- Statement of Work (SOW)
Correct answer: Service Level Agreement (SLA)
A Service Level Agreement specifies performance standards, recovery time objectives, and contractual remedies if a vendor fails to meet commitments.
Question 3: What is 'supply chain mapping' and why is it critical for resilience?
- Tracking shipment GPS locations
- Documenting all tiers of suppliers to identify hidden dependencies and risks (Correct answer)
- Creating a vendor contact directory
- Mapping warehouse floor layouts
Correct answer: Documenting all tiers of suppliers to identify hidden dependencies and risks
Supply chain mapping documents Tier 1, 2, and 3 suppliers to reveal hidden single points of failure and concentration risks that may not be visible at the surface level.
Question 4: When a critical vendor fails during a disruption, which response action should occur first?
- Terminate the vendor contract immediately
- Activate the pre-identified alternate supplier per the contingency plan (Correct answer)
- Notify regulators
- Begin a new vendor search process
Correct answer: Activate the pre-identified alternate supplier per the contingency plan
The contingency plan should already identify alternate suppliers, and activating them immediately minimizes operational downtime.
Question 5: What is the role of 'safety stock' in supply chain resilience?
- Inventory held at supplier warehouses only
- Buffer inventory maintained to sustain operations during supply disruptions (Correct answer)
- Stock reserved for regulatory inspections
- Defective goods set aside for return
Correct answer: Buffer inventory maintained to sustain operations during supply disruptions
Safety stock provides a time buffer that allows operations to continue while alternate supply arrangements are activated following a disruption.
Question 6: Which CRP principle applies when an organization ensures its vendors align with its own resilience and continuity standards?
- Redundancy planning
- Extended enterprise resilience (Correct answer)
- Crisis communication
- Risk avoidance
Correct answer: Extended enterprise resilience
Extended enterprise resilience recognizes that an organization's resilience is only as strong as the weakest link in its vendor and partner ecosystem.
CRP CRP Supply Chain Resilience & Vendor Management 2
In supply chain resilience, what is the purpose of geographic diversification of suppliers?