CSCP FREE Certified Supply Chain Professional (CSCP) Supply Chain Risk Management Questions and Answers 2 — Questions and Answers
Question 1: A manufacturer discovers that 70% of a critical component comes from a single supplier in a politically unstable region. Which risk mitigation strategy is MOST appropriate?
- Increase safety stock levels for the component
- Develop alternative suppliers in different geographic regions (Correct answer)
- Negotiate longer-term contracts with the existing supplier
- Transfer the risk through insurance policies
Correct answer: Develop alternative suppliers in different geographic regions
Geographic diversification of suppliers directly reduces concentration risk and exposure to regional disruptions.
Question 2: Which of the following is a key output of a supply chain risk assessment process?
- A supplier scorecard ranking vendors by cost
- A risk register that prioritizes threats by likelihood and impact (Correct answer)
- A demand forecast for the next fiscal quarter
- A logistics route optimization plan
Correct answer: A risk register that prioritizes threats by likelihood and impact
A risk register catalogs identified risks, their probability, potential impact, and planned responses, serving as the primary output of risk assessment.
Question 3: What does the concept of 'risk appetite' refer to in supply chain risk management?
- The total cost a company allocates to risk mitigation activities
- The level of risk an organization is willing to accept in pursuit of its objectives (Correct answer)
- The maximum number of suppliers a company is willing to manage
- The frequency at which risk assessments are conducted
Correct answer: The level of risk an organization is willing to accept in pursuit of its objectives
Risk appetite defines the amount and type of risk an organization is prepared to accept to achieve its strategic goals.
Question 4: During a supply chain disruption, a company activates its business continuity plan and shifts production to a pre-qualified backup facility. This is an example of which risk response strategy?
- Risk avoidance
- Risk acceptance
- Risk mitigation (Correct answer)
- Risk transfer
Correct answer: Risk mitigation
Activating a backup facility is a mitigation strategy that reduces the impact of the disruption through pre-planned contingency measures.
Question 5: Which risk identification technique involves systematically analyzing each stage of the supply chain to uncover potential failure points?
- Monte Carlo simulation
- Supply chain mapping (Correct answer)
- Delphi method
- Earned value analysis
Correct answer: Supply chain mapping
Supply chain mapping visually documents every node and link in the chain, making it possible to identify vulnerabilities at each stage.
Question 6: A global pandemic causes widespread port closures and labor shortages simultaneously. This type of event is BEST classified as which category of supply chain risk?
- Operational risk limited to logistics providers
- Systemic risk affecting multiple supply chain tiers (Correct answer)
- Financial risk related to currency fluctuation
- Compliance risk due to changing trade regulations
Correct answer: Systemic risk affecting multiple supply chain tiers
Systemic risk affects the entire supply chain ecosystem across multiple tiers and geographies simultaneously, unlike isolated operational failures.
CSCP FREE Certified Supply Chain Professional (CSCP) Supply Chain Risk Management Questions and Answers 2
A manufacturer discovers that 70% of a critical component comes from a single supplier in a politically unstable region.
Which risk mitigation strategy is MOST appropriate?