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 produces 950 conforming units out of 1,000. A defect opportunity exists at each of 5 steps. What is the process's Defects Per Million Opportunities (DPMO)?
Answer: 50,000
DPMO = (Defects / (Units × Opportunities)) × 1,000,000 = (50 / (1,000 × 5)) × 1,000,000 = 10,000; wait — 50 defects, 5,000 opportunities = 50/5,000 × 1,000,000 = 10,000. Correct answer: 10,000.
Process performance benchmarking against industry peers is primarily used to:
Answer: Set stretch targets and reveal performance gaps
Benchmarking compares your performance to best-in-class peers so you can set realistic yet ambitious improvement targets.
Which risk identification technique involves systematically examining each process step to ask 'what could go wrong here?'
Answer: HAZOP (Hazard and Operability Study)
HAZOP applies guidewords (none, more, less, etc.) to each process step to systematically uncover hazards and operability problems.
In process management, 'risk appetite' refers to:
Answer: The amount of risk an organization is willing to accept in pursuit of its objectives
Risk appetite is the level of risk an organization deliberately chooses to take on while pursuing strategic goals.
A manager notices a process metric trending toward its control limit. According to statistical process control principles, the appropriate action is to:
Answer: Investigate for a special cause before the limit is breached
A consistent trend toward a control limit is a signal of special cause variation, warranting investigation before a defect or breach occurs.
Which of the following best describes a 'key risk indicator' (KRI)?
Answer: A forward-looking metric that signals increasing risk exposure
KRIs are predictive measures that alert management when risk levels are rising, enabling proactive response.
Process performance dashboards are MOST valuable when they include:
Answer: Real-time or near-real-time data tied to strategic objectives
Dashboards deliver the most value when they provide timely, strategically relevant data that enables rapid decisions.