Operations and Process Management Flashcards
7 cards from real CAS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Operations and Process Management flashcards as text
What is the 'bullwhip effect' in supply chain and operations management?
Answer: The amplification of demand variability as orders move upstream in a supply chain
The bullwhip effect describes how small fluctuations in end-customer demand get progressively amplified as they travel upstream through a supply chain, causing inefficient overproduction.
In the context of actuarial model governance, what is a 'model validation' process?
Answer: An independent review assessing whether a model is fit for its intended purpose and producing reliable outputs
Model validation is an independent assessment confirming that a model's design, assumptions, and outputs are appropriate and reliable for the decisions it supports.
A claims operation has a service level agreement (SLA) requiring 95% of claims to be acknowledged within 24 hours. Which operational metric should be tracked to monitor SLA compliance?
Answer: Percentage of claims receiving first contact within 24 hours of receipt
Tracking the percentage of claims receiving first contact within 24 hours directly measures compliance with the stated SLA threshold.
What distinguishes 'business process outsourcing' (BPO) from 'offshoring' in insurance operations?
Answer: BPO involves contracting entire processes to an external organization, while offshoring refers to relocating operations to another country
BPO transfers process responsibility to an external vendor regardless of location, while offshoring moves operations to a lower-cost country and may still be performed in-house.
In operations management, 'yield' for a multi-step insurance underwriting process is calculated as:
Answer: The product of the yield rates at each individual process step
Total process yield is the product of the first-pass yield (FPY) at each step; for example, three steps each at 90% yield produce an overall yield of 0.9³ = 72.9%.
Which operational risk framework element requires insurers to maintain a 'risk and control self-assessment' (RCSA)?
Answer: Enterprise risk management (ERM) frameworks such as COSO or Solvency II
ERM frameworks like COSO and Solvency II Pillar II require organizations to conduct RCSAs, where business units identify, assess, and document their operational risks and controls.
A property insurer wants to reduce the 'no-touch' processing rate — claims that require human intervention — from 40% to 20%. This is an example of:
Answer: Straight-through processing (STP) improvement
Straight-through processing (STP) refers to automated end-to-end processing without manual intervention; increasing STP rates reduces operational costs and cycle times.