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
When a risk response plan transfers risk to a third party, which of the following is a typical mechanism used?
Answer: Insurance or contractual indemnification clauses
Risk transfer shifts financial or operational exposure to another party, most commonly through insurance policies or contractual liability clauses.
Overall Equipment Effectiveness (OEE) is calculated as:
Answer: Availability × Performance × Quality
OEE = Availability × Performance × Quality, giving a composite measure of how effectively manufacturing equipment is used.
A CPS practitioner performing a risk assessment assigns qualitative ratings of High, Medium, or Low to identified risks. This approach is MOST appropriate when:
Answer: Quantitative data is scarce and rapid prioritization is needed
Qualitative risk assessment is ideal early in the process or when hard data is unavailable, enabling fast relative prioritization.
A process team wants to reduce the inherent risk of a step by redesigning the step so the hazard no longer exists. This is an example of which risk response?
Answer: Risk avoidance
Eliminating the activity or redesigning it so the hazard cannot occur is risk avoidance — the risk is removed entirely.
Which of the following is an example of a lagging performance indicator?
Answer: Customer defect return rate for the prior month
A lagging indicator reflects outcomes after the fact; defect returns from the previous month measure results that have already occurred.
In the context of process risk management, 'residual risk' is defined as:
Answer: Risk that remains after all planned risk responses have been applied
Residual risk is the exposure that persists even after mitigation, transfer, and other controls have been implemented.
Which process performance metric measures the percentage of time a process delivers output within the promised timeframe to customers?
Answer: On-Time Delivery Rate (OTD)
On-Time Delivery Rate tracks the proportion of outputs delivered within the committed schedule, reflecting process reliability from the customer's view.