Supply Chain Management Risk Management 3

Question 1

In supply chain risk management, what is a 'risk heat map' used for?

Accepted Answer

Visualizing risks by likelihood and impact to prioritize responses

Answer

A risk heat map plots risks on a matrix of probability versus impact, helping teams visually prioritize which risks require the most attention.

Question 2

A company diversifies its supplier base across multiple countries to reduce dependency on any one region. This strategy is called:

Accepted Answer

Geographic diversification

Answer

Geographic diversification spreads procurement across multiple regions to reduce exposure to localized disruptions such as natural disasters or political instability.

Question 3

Which of the following best describes 'supply chain resilience'?

Accepted Answer

The capacity to anticipate, adapt to, and recover from disruptions

Answer

Supply chain resilience is the ability to prepare for unexpected events, respond to disruptions, and recover to a stable state while maintaining operations.

Question 4

What is 'tier-N supplier risk' in supply chain management?

Accepted Answer

Risk originating from suppliers further back in the supply chain beyond direct suppliers

Answer

Tier-N risk recognizes that disruptions at Tier 2, 3, or deeper suppliers can cascade through the chain and impact the buying company even without a direct relationship.

Question 5

Which approach helps quantify the financial impact of a potential supply chain disruption?

Accepted Answer

Value at Risk (VaR) analysis

Answer

Value at Risk (VaR) analysis estimates the maximum potential financial loss from a disruption over a defined time period at a given confidence level.

Supply Chain Management Practice Test

Supply Chain Management Practice Test

Supply Chain Management Risk Management 3