GLP Risk Management & Business Continuity 2

Question 1

Which procurement strategy best reduces the risk of supplier dependency in a global supply chain?

Accepted Answer

Supply base diversification across multiple suppliers and geographic regions

Answer

Just-in-time (JIT) procurement from a single optimized supplier

Answer

Single-sourcing from the lowest total-cost provider

Answer

Consignment inventory agreements with one strategic long-term partner

Question 2

Force majeure clauses in logistics contracts primarily protect parties from liability when:

Accepted Answer

Performance failures occur due to unforeseeable events beyond reasonable control

Answer

They voluntarily delay shipments to take advantage of better market pricing

Answer

Routine operational delays exceed the contracted lead time

Answer

Financial penalties are incurred due to poor operational planning or execution

Question 3

What is the primary benefit of scenario planning in logistics risk management?

Accepted Answer

It allows companies to pre-develop response strategies for various potential disruptions

Answer

It eliminates the need for liability insurance coverage

Answer

It replaces real-time supply chain monitoring technology

Answer

It guarantees regulatory compliance across all operating markets

Question 4

A major canal blockage disrupting global shipping lanes is an example of which type of supply chain risk?

Accepted Answer

Systemic or macro-level risk affecting multiple industries simultaneously

Answer

Micro-operational risk confined to a single facility or lane

Answer

Supplier-specific reputational risk limited to one trading partner

Answer

Regulatory compliance risk specific to one country's trade rules

Question 5

In logistics risk management, 'risk appetite' refers to:

Accepted Answer

The amount and type of risk an organization is willing to accept in pursuit of its objectives

Answer

The maximum financial loss a company can sustain before insolvency

Answer

Management's personal stress tolerance during active crisis situations

Answer

The threshold for acceptable rates of cargo damage or loss claims

Question 6

What distinguishes a risk 'mitigation' strategy from a risk 'transfer' strategy?

Accepted Answer

Mitigation reduces the probability or impact of a risk, while transfer shifts the financial burden to another party

Answer

Mitigation means accepting the risk, while transfer means monitoring it closely

Answer

Mitigation applies only to regulatory risks, while transfer applies only to physical cargo risks

Answer

Mitigation is for catastrophic risks only, while transfer is used for minor operational risks

Question 7

A logistics firm conducts tabletop exercises for its business continuity plan. What is the primary purpose of these exercises?

Accepted Answer

To identify gaps and test the effectiveness of the BCP before an actual disruption occurs

Answer

To train new warehouse associates on standard operating procedures

Answer

To satisfy mandatory requirements for commercial property insurance audits

Answer

To demonstrate compliance with ISO 9001 quality management standards