GLP Risk Management & Business Continuity 1 — Questions and Answers
Question 1: What is the primary purpose of a Business Continuity Plan (BCP) in logistics operations?
- To maximize quarterly profits during peak seasons
- To ensure critical business functions continue during and after a disruption (Correct answer)
- To standardize customs documentation procedures
- To optimize last-mile delivery routing
Correct answer: To ensure critical business functions continue during and after a disruption
A BCP ensures essential logistics operations can continue or quickly resume following a disruption such as a natural disaster, cyberattack, or pandemic.
Question 2: In risk assessment, what does a 'probability x impact' matrix help logistics managers do?
- Calculate shipping insurance premiums
- Determine warehouse storage capacity needs
- Prioritize risks based on their likelihood and potential consequences (Correct answer)
- Negotiate favorable supplier payment terms
Correct answer: Prioritize risks based on their likelihood and potential consequences
Multiplying probability by impact allows logistics managers to rank risks and focus mitigation resources on the most critical threats.
Question 3: A logistics company's Transportation Management System suffers a major cyberattack. What is the FIRST step in the incident response process?
- Notify all customers about potential shipment delays
- Contact law enforcement and regulatory authorities immediately
- Contain the breach to prevent it from spreading to additional systems (Correct answer)
- Restore operations from the most recent known backup
Correct answer: Contain the breach to prevent it from spreading to additional systems
Containment is the first priority in incident response to stop the attack from spreading and causing additional damage before remediation begins.
Question 4: Which of the following best describes 'supply chain resilience'?
- The ability to maximize profit margins during high-demand periods
- The exclusive use of domestic suppliers to avoid geopolitical risk
- The use of advanced robotics to replace human warehouse workers
- The capacity to anticipate, prepare for, and adapt to disruptions while maintaining continuity (Correct answer)
Correct answer: The capacity to anticipate, prepare for, and adapt to disruptions while maintaining continuity
Supply chain resilience encompasses a company's ability to detect, withstand, and recover from disruptions while maintaining acceptable performance levels.
Question 5: What type of risk arises when a company relies heavily on a single supplier for a critical component?
- Market concentration risk
- Regulatory compliance risk
- Supplier dependency (concentration) risk (Correct answer)
- Currency exchange rate risk
Correct answer: Supplier dependency (concentration) risk
Supplier concentration risk occurs when over-reliance on one supplier creates vulnerability if that supplier experiences disruptions, financial difficulties, or capacity constraints.
Question 6: In logistics risk management, what is the primary purpose of a risk 'heat map'?
- To track temperature-sensitive cold chain cargo in transit
- To visualize and prioritize risks based on likelihood and potential impact (Correct answer)
- To optimize energy consumption across distribution centers
- To map seasonal demand fluctuations by geographic region
Correct answer: To visualize and prioritize risks based on likelihood and potential impact
A risk heat map visually plots risks by their probability and impact, helping management focus attention and resources on the most critical threats.
Question 7: What is the Recovery Time Objective (RTO) in business continuity planning?
- The maximum acceptable delay in paying supplier invoices after a disruption
- The interval between mandatory business continuity plan reviews
- The target time within which critical business processes must be restored after a disruption (Correct answer)
- The minimum time required to qualify and onboard an emergency backup supplier
Correct answer: The target time within which critical business processes must be restored after a disruption
RTO defines the maximum tolerable downtime for a business process, guiding recovery priorities and resource allocation in continuity planning.
GLP Risk Management & Business Continuity 1
What is the primary purpose of a Business Continuity Plan (BCP) in logistics operations?