L5M2 Managing Supply Chain Risk Questions and Answers

Explanation

analyse is the correct answer. The full process is: establish context- identify- analyse - evaluate - treat - monitor and review. This is from p.122

Explanation

She should use a credit rating agency for this. She should not do this herself as she won't have access to accurate information like an agency will. The supplier may not have been truthful in their tender. For information on Credit Rating Agencies see p.79

Explanation

1, 3 and 4 are the correct options. Binomial is based on discreate events not continuous and it assumes the events of each trial are independent of one another. This YouTube video explains it all perfectly using the chance that an ice-cream cone is broken. It's a nice memorable example to help you remember what binomial distribution is and how it works: https://www.youtube.com/watch?v=3EZbX2ftCUk - it 's a very memorable example and really helped me. You can also see more info in the cips textbook p.131

Explanation

Patent and Trademark are types of IP protection. There are 4 in total - the other two are copywrite and trade secret. This is covered on p.63-64 of the study guide

Explanation

Answers 2 and 4 are correct. A Business Continuity Plan is held at the top level, not a disaster recovery plan. This can be held at the department level- or whoever would have the ability to enact this if a disaster were to happen. A company is likely to have several Disaster Recovery Plans for different departments and different scenarios so several people within the organisation may be accountable for these. Option 3 is incorrect as the focus is on recovering systems (e.g. getting people back online) not on profit. P.155

Explanation

The correct answers are as follows:

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Explanation

1 3 and 4 are the correct answers. There are 7 key areas that ISO 26000 focuses on. As well as these three, there is also labour practices, the environment, fair operating practices and community involvement. See p. 51 of the study guide. ISOs are a popular exam topic so do revise these before the exam.

Explanation

A black swan event is an unusual occurrence - something that is rare. See p.124

Explanation

3 4 and 5 are the correct answers. This is from p. 79 of the textbook - each of these three areas is then covered in detail throughout chapter 2.2.

Explanation

The correct answers are as follows:

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Explanation

The correct answers are as follows:

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CSR= Corporate Social Responsibility

Explanation

Insurance is a form of hedging. Hedging is using a financial instrument to offset the potential risk of an adverse loss (p.93) none of the other options mentioned are financial instruments.

Explanation

Risk Management = ISO31000. Learn the ISOs for the exam as it's a popular exam topic. 31000 is explained on p. 140. As well as the numbers, you should also learn the guiding principles of each ISO for the exam.

Explanation

access is not a pre-condition. The other three are. The fourth pre-condition not mentioned is lack of controls. This is from p.20 of the study guide

Explanation

2 is the correct answer. Risk appetite is the level of risk that an individual or organisation is comfortable taking (p.4). Having a large risk appetite does not mean that you want to take every risk (as that would be irresponsible), rather, a large risk appetite means you're more likely to gamble and take calculated risks, even though they might not pay off. A small risk appetite would describe options 3 and 4 - taking few risks, or none at all.