CSCP CSCP Supply Chain Risk Management Questions and Answers 2 — Questions and Answers
Question 1: Which risk management strategy involves maintaining additional inventory to buffer against supply disruptions?
- Risk avoidance
- Risk mitigation through safety stock (Correct answer)
- Risk transfer
- Risk acceptance
Correct answer: Risk mitigation through safety stock
Safety stock is a mitigation strategy that uses buffer inventory to protect against variability and potential supply disruptions.
Question 2: What is the primary purpose of a supply chain risk heat map?
- To track shipment temperatures during transit
- To visualize risks by likelihood and impact severity (Correct answer)
- To monitor warehouse climate conditions
- To measure supplier financial performance
Correct answer: To visualize risks by likelihood and impact severity
A risk heat map plots identified risks on a matrix of probability versus impact, enabling prioritization of mitigation efforts.
Question 3: In the context of CSCP, what does Business Continuity Planning (BCP) primarily address?
- Maximizing quarterly revenue targets
- Maintaining operations during and after a disruptive event (Correct answer)
- Reducing annual procurement costs
- Improving customer satisfaction scores
Correct answer: Maintaining operations during and after a disruptive event
BCP focuses on ensuring critical business functions can continue during a disruption and recover within acceptable timeframes.
Question 4: Which of the following best describes a single-source risk in supply chain management?
- Using only one transportation mode for all shipments
- Relying on a sole supplier for a critical component (Correct answer)
- Having a single warehouse location
- Operating in only one geographic market
Correct answer: Relying on a sole supplier for a critical component
Single-source risk arises when an organization depends on one supplier for a critical item, creating vulnerability if that supplier fails.
Question 5: What role does supply chain mapping play in risk management?
- It eliminates all potential supply chain risks
- It provides end-to-end visibility of nodes and dependencies to identify vulnerabilities (Correct answer)
- It replaces the need for supplier audits
- It guarantees on-time delivery performance
Correct answer: It provides end-to-end visibility of nodes and dependencies to identify vulnerabilities
Supply chain mapping reveals the full network of suppliers, sub-tier dependencies, and logistics routes, helping identify hidden vulnerabilities.
Question 6: Which quantitative method uses historical data and statistical models to estimate the financial exposure of supply chain risks?
- SWOT analysis
- Value at Risk (VaR) (Correct answer)
- Delphi technique
- Benchmarking
Correct answer: Value at Risk (VaR)
Value at Risk applies statistical analysis to historical data to estimate potential financial losses within a given confidence interval.
CSCP CSCP Supply Chain Risk Management Questions and Answers 2
Which risk management strategy involves maintaining additional inventory to buffer against supply disruptions?