Practice Test GeeksMEM - Master of Engineering Management Practice Test
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Risk Management Flashcards

6 cards from real MEM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. What is 'failure mode and effects analysis' (FMEA) used for in engineering management?

    Answer: Systematically identifying potential failure modes and their effects to prioritize risk mitigation

    FMEA proactively identifies potential failure modes of system components, analyzes their effects, and prioritizes corrective actions using a Risk Priority Number (RPN).

  2. In risk management, what does a 'fault tree analysis' (FTA) examine?

    Answer: The logical combination of events that can lead to a specific undesired system event

    FTA uses a top-down, deductive approach to identify combinations of equipment failures and human errors that could cause an undesired top-level event.

  3. What is the key difference between 'systematic risk' and 'unsystematic risk' in financial risk management?

    Answer: Systematic risk affects the entire market; unsystematic risk is specific to a company or industry

    Systematic (market) risk affects all investments and cannot be diversified away, while unsystematic (specific) risk is unique to a firm or sector and can be reduced through diversification.

  4. Which approach uses 'what-if' questions and structured team discussions to identify hazards in a process?

    Answer: Hazard and Operability Study (HAZOP)

    HAZOP uses structured 'what-if' guideword analysis with multidisciplinary teams to systematically identify process hazards and operability problems.

  5. In the context of supply chain risk for engineering managers, what does 'single-source dependency' risk refer to?

    Answer: The vulnerability created by having only one supplier for a critical component

    Single-source dependency means a critical component has only one supplier, creating high supply chain risk because any disruption to that supplier halts production.

  6. What is 'risk-adjusted return' in engineering investment decisions?

    Answer: The expected return of an investment modified to account for the level of risk undertaken

    Risk-adjusted return accounts for the uncertainty of achieving projected returns, allowing fair comparison between investments with different risk profiles.