FREE Certified Supply Chain Professional (CSCP) Supply Chain Risk Management Questions and Answers

Question 1

A technology company relies entirely on a single, highly specialized supplier in a geopolitically unstable region for a critical processor chip.
A risk analysis identifies this as a high-impact vulnerability.
Which of the following is the most effective and proactive risk mitigation strategy?

Accepted Answer

Establish a contractual agreement with a secondary supplier in a different geographical region, even if at a higher unit cost.

Answer

Purchase business interruption insurance to cover potential financial losses.

Answer

Develop a detailed post-disruption recovery plan to expedite logistics once the primary supplier resumes operations.

Answer

Increase the safety stock of the processor chip at the manufacturing facility to cover three months of production.

Question 2

A supply chain risk manager is leading an effort to categorize and prioritize known risks. The team is using a visual tool to plot each risk based on its probability of occurrence and the severity of its potential impact on operations. This tool helps to distinguish between risks that require immediate attention and those that can be monitored. What is this tool called?

Accepted Answer

Probability and Impact Matrix

Answer

Failure Mode and Effects Analysis (FMEA)

Answer

Value at Risk (VaR) Model

Answer

Supply Chain Operations Reference (SCOR) Model

Question 3

The ability of a supply chain to anticipate, adapt to, and recover from unexpected disruptions, while maintaining continuity of operations at a desired level, is best defined as:

Accepted Answer

Supply Chain Resilience

Answer

Supply Chain Agility

Answer

Supply Chain Visibility

Answer

Supply Chain Optimization

Question 4

A global retailer sources apparel from Southeast Asia and pays its suppliers in their local currency. To protect its cost of goods sold from unfavorable exchange rate movements, the company enters into financial agreements to purchase the foreign currency at a predetermined rate for future payment dates. This financial risk management practice is known as:

Accepted Answer

Hedging

Answer

Nearshoring

Answer

Speculation

Answer

Tariff Engineering

Question 5

Which of the following is a primary strategic disadvantage of a risk mitigation strategy that relies heavily on holding large amounts of safety stock?

Accepted Answer

It can mask underlying supply chain problems such as poor forecasting or unreliable supplier lead times.

Answer

It significantly increases the risk of a stockout event.

Answer

It reduces the need for warehouse space and associated storage costs.

Answer

It is only effective for managing demand-side risks, not supply-side risks.

Question 6

A company identifies a high-impact, low-probability risk: a complete shutdown of a major port due to a natural disaster. The management team develops a detailed, step-by-step action plan that will only be activated if the disaster occurs. The plan outlines how to reroute shipments, engage alternate carriers, and communicate with customers. This documented action plan is best described as a:

Accepted Answer

Contingency Plan

Answer

Business Impact Analysis (BIA)

Answer

Risk Mitigation Strategy

Answer

Supplier Audit Report

A technology company relies entirely on a single, highly specialized supplier in a geopolitically unstable region for a critical processor chip.A risk analysis identifies this as a high-impact vulnerability.Which of the following is the most effective and proactive risk mitigation strategy?

A technology company relies entirely on a single, highly specialized supplier in a geopolitically unstable region for a critical processor chip.
A risk analysis identifies this as a high-impact vulnerability.
Which of the following is the most effective and proactive risk mitigation strategy?