Certified Supply Chain Professional CSCP Practice Certified Supply Chain Professional (CSCP) Supply Chain Risk Management 1 — Questions and Answers
Question 1: A global retailer uses a risk heat map to prioritize supply chain threats. Which two dimensions are plotted on a standard risk heat map?
- Cost and lead time
- Probability and impact (Correct answer)
- Frequency and velocity
- Supplier score and market share
Correct answer: Probability and impact
A risk heat map plots likelihood (probability) against consequence (impact) to visually prioritize which risks require the most urgent attention and resources.
Question 2: Which supply chain risk management technique involves holding extra inventory specifically to buffer against demand or supply uncertainty?
- Risk transfer
- Safety stock (Correct answer)
- Dual sourcing
- Postponement
Correct answer: Safety stock
Safety stock is buffer inventory held beyond expected demand to guard against variability in supply lead times or demand fluctuations, directly absorbing supply chain uncertainty.
Question 3: A CSCP candidate is evaluating a supplier's financial health as part of a risk assessment. Which financial metric is MOST directly relevant to assessing the supplier's ability to survive a demand downturn?
- Gross margin percentage
- Current ratio (Correct answer)
- Return on assets
- Revenue growth rate
Correct answer: Current ratio
The current ratio (current assets divided by current liabilities) measures short-term liquidity, indicating whether a supplier can meet near-term obligations during a revenue downturn.
Question 4: Which of the following BEST describes the concept of 'supply chain resilience'?
- The ability to source all materials domestically
- The capacity to avoid all disruptions through rigorous planning
- The ability to recover quickly and return to normal operations after a disruption (Correct answer)
- The practice of outsourcing risk to third-party logistics providers
Correct answer: The ability to recover quickly and return to normal operations after a disruption
Supply chain resilience is the ability to anticipate, adapt to, and recover from disruptions, returning to the original or a new, better operating state as quickly as possible.
Question 5: A company signs a contract requiring its supplier to carry product liability insurance and name the company as an additional insured. This is an example of which supply chain risk strategy?
- Risk avoidance
- Risk acceptance
- Risk transfer (Correct answer)
- Risk reduction
Correct answer: Risk transfer
Transferring financial liability through insurance or contractual clauses shifts the economic burden of a risk event to another party (insurer or supplier), which is the definition of risk transfer.
Question 6: When conducting a supply chain vulnerability assessment, which framework helps organizations identify risks across Plan, Source, Make, Deliver, and Return processes?
- FMEA
- SCOR (Correct answer)
- ISO 31000
- COSO ERM
Correct answer: SCOR
The Supply Chain Operations Reference (SCOR) model structures supply chain activities into Plan, Source, Make, Deliver, and Return domains, making it a natural framework for mapping and identifying risks across the entire supply chain.
Certified Supply Chain Professional CSCP Practice Certified Supply Chain Professional (CSCP) Supply Chain Risk Management 1
A global retailer uses a risk heat map to prioritize supply chain threats.
Which two dimensions are plotted on a standard risk heat map?