Risk Assessment & Mitigation Flashcards

Which risk identification technique gathers expert opinions through iterative anonymous rounds to reach consensus?

Answer: Delphi technique

The Delphi technique uses structured rounds of anonymous expert questionnaires, with feedback shared between rounds until consensus emerges.

A business continuity plan (BCP) is BEST described as:

Answer: A documented strategy to maintain critical functions during and after a disruption

A BCP outlines procedures and resources needed to keep essential operations running during crises such as natural disasters or system failures.

The 'residual risk' in operations refers to:

Answer: Risk remaining after controls and mitigation measures have been applied

Residual risk is the level of risk that persists after all risk controls and mitigation actions have been implemented.

In supply chain risk management, 'safety stock' is primarily used to mitigate which risk?

Answer: Demand variability and supply disruption risk

Safety stock acts as a buffer inventory to absorb unexpected demand spikes or supply delays, reducing stockout risk.

Which of the following best describes a 'black swan' event in risk management?

Answer: A rare, unpredictable event with extreme consequences

Black swan events are characterized by their rarity, severe impact, and the fact that they appear obvious only in retrospect.

A Key Risk Indicator (KRI) differs from a Key Performance Indicator (KPI) in that a KRI:

Answer: Provides an early warning signal of increasing risk exposure

KRIs are forward-looking metrics that signal when risk levels are increasing, allowing proactive intervention before a loss occurs.

Which risk mitigation approach reduces risk by making an undesirable outcome less severe if it does occur?

Answer: Loss reduction

Loss reduction controls (like fire suppression systems) aim to minimize the damage or severity when a risk event happens, rather than preventing it entirely.