Risk & Performance Flashcards
7 cards from real CPS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk & Performance flashcards as text
A process owner notices that cycle time variability has increased over the past quarter despite no change in inputs. Which risk response strategy best addresses this situation?
Answer: Investigate root causes and implement controls to reduce variability
Increased variability with stable inputs signals an emerging process risk that requires root cause analysis and corrective controls.
Which KPI most directly measures the effectiveness of a risk mitigation plan implemented in a business process?
Answer: Reduction in the frequency and severity of identified risk events
An effective mitigation plan should reduce both how often and how severely risk events occur, making that the primary effectiveness measure.
In a risk heat map, a risk plotted in the upper-right quadrant requires which treatment priority?
Answer: High priority — immediate mitigation action required
The upper-right quadrant of a heat map represents high likelihood and high impact, demanding immediate and active mitigation.
A CPS practitioner is asked to select a leading indicator for process performance. Which of the following qualifies as a leading indicator?
Answer: Supplier quality audit score obtained before production begins
A leading indicator predicts future performance; a pre-production supplier audit score signals quality risk before defects occur.
When conducting a Failure Mode and Effects Analysis (FMEA), the Risk Priority Number (RPN) is calculated as:
Answer: Severity × Occurrence × Detection
RPN = Severity × Occurrence × Detection, giving a composite score to prioritize which failure modes need corrective action first.
A process team identifies a risk with a 5% probability of occurrence and an impact of $200,000. What is the Expected Monetary Value (EMV) of this risk?
Answer: $10,000
EMV = Probability × Impact = 0.05 × $200,000 = $10,000.
Which balanced scorecard perspective directly encompasses process risk management activities?
Answer: Internal business process perspective
Risk controls and process improvement activities reside within the internal business process perspective of the balanced scorecard.