Supply Chain and Logistics Supply Chain Risk Management

Question 1

Which type of supply chain risk arises from a single supplier being the sole source for a critical component?

Accepted Answer

Single-source dependency risk

Answer

Single-source dependency risk occurs when only one supplier can provide a critical input, leaving the buyer vulnerable if that supplier fails.

Question 2

A company maps all its suppliers, their suppliers, and beyond to identify hidden vulnerabilities. This practice is called:

Accepted Answer

Supply chain mapping (n-tier visibility)

Answer

N-tier supply chain mapping extends visibility beyond direct (Tier 1) suppliers to uncover risks embedded deeper in the supply chain.

Question 3

Which risk mitigation strategy involves holding safety stock to protect against supply disruptions?

Accepted Answer

Risk buffering

Answer

Risk buffering uses inventory buffers (safety stock) or capacity reserves to absorb supply or demand shocks.

Question 4

A black swan event in supply chain risk management refers to:

Accepted Answer

A rare, high-impact, hard-to-predict disruption

Answer

Black swan events are highly improbable, high-consequence disruptions—such as a pandemic or major natural disaster—that are difficult to anticipate.

Question 5

Which of the following best describes the 'bullwhip effect' as a supply chain risk?

Accepted Answer

Demand signal distortion that amplifies order variability upstream

Answer

The bullwhip effect is when small fluctuations in end-customer demand get magnified as orders travel upstream, causing excess inventory or shortages.

Supply Chain and Logistics Practice Test