Supply Chain and Logistics Supply Chain Risk Management 2 — Questions and Answers
Question 1: Which framework uses a heat map plotting likelihood versus impact to prioritize supply chain risks?
- SWOT analysis
- Risk probability-impact matrix (Correct answer)
- Balanced scorecard
- Value stream mapping
Correct answer: Risk probability-impact matrix
A risk probability-impact matrix categorizes risks by their likelihood of occurrence and potential severity, helping teams focus mitigation resources.
Question 2: Geopolitical risk in supply chain management includes which of the following?
- Seasonal demand fluctuations
- Trade tariffs and export controls affecting cross-border sourcing (Correct answer)
- Internal warehouse theft
- Supplier payment terms
Correct answer: Trade tariffs and export controls affecting cross-border sourcing
Geopolitical risk encompasses government actions such as tariffs, sanctions, and export controls that can disrupt international supply flows.
Question 3: A Business Continuity Plan (BCP) in supply chain management is primarily designed to:
- Maximize profit margins under normal operations
- Ensure critical supply chain functions continue during and after a major disruption (Correct answer)
- Reduce warehouse overhead costs
- Automate procurement processes
Correct answer: Ensure critical supply chain functions continue during and after a major disruption
A BCP outlines procedures to maintain or quickly restore supply chain operations when a significant disruption occurs.
Question 4: Which metric measures the time required for a supply chain to return to normal performance after a disruption?
- Perfect order rate
- Time-to-recover (TTR) (Correct answer)
- Cash-to-cash cycle time
- Fill rate
Correct answer: Time-to-recover (TTR)
Time-to-recover (TTR) quantifies how long it takes for supply chain performance to fully bounce back after a disruptive event.
Question 5: Cybersecurity threats are increasingly important in supply chain risk because:
- They only affect retail companies
- Digital systems and data sharing across partners create vulnerabilities to hacking and ransomware (Correct answer)
- They are fully covered by standard cargo insurance
- They do not affect physical goods movement
Correct answer: Digital systems and data sharing across partners create vulnerabilities to hacking and ransomware
Modern supply chains rely on interconnected digital platforms; a cyberattack on any node—such as an ERP system—can halt orders, shipments, and payments across the network.
Question 6: Which supply chain risk management approach involves identifying critical nodes whose failure would most severely disrupt the entire network?
- ABC analysis
- Critical path and node analysis (Correct answer)
- Vendor scorecard review
- FIFO inventory rotation
Correct answer: Critical path and node analysis
Critical node analysis identifies the suppliers, facilities, or routes whose failure would cause the greatest disruption, so mitigation efforts can be prioritized there.
Question 7: Near-shoring as a risk mitigation strategy refers to:
- Sourcing exclusively from domestic suppliers
- Moving production or sourcing to nearby countries to reduce lead times and geopolitical exposure (Correct answer)
- Storing inventory near customer delivery points
- Outsourcing logistics to a 3PL provider
Correct answer: Moving production or sourcing to nearby countries to reduce lead times and geopolitical exposure
Near-shoring relocates supply chain activities to neighboring or regionally close countries, balancing cost savings with reduced lead times and lower geopolitical risk compared to distant offshore sources.
Supply Chain and Logistics Supply Chain Risk Management 2
Which framework uses a heat map plotting likelihood versus impact to prioritize supply chain risks?