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CIPS Managing Supply Chain Risk Sample Questions (Q31-Q36):
NEW QUESTION # 31
Which of the following will you put into box 7?
- A. new technology
- B. insurance
- C. forward contract
- D. outsource
Answer: D
Explanation:
Explanation
Table Description automatically generated
NEW QUESTION # 32
Which of the following is not an internal risk for a business who imports raw materials from abroad?
- A. procurement fraud
- B. technology malfunction
- C. loss of customer data
- D. changes to import levies
Answer: D
Explanation:
Explanation
changes to import levies is an external risk. Not internal. See p.118-119 for more information on internal risks
– this is a popular exam topic. Internal risks are stuff that happens inside a company, external risks are risks from the external environment (whether this is political, economical, weather etc)
NEW QUESTION # 33
Neruda Incorporated is evaluating potential suppliers’ financial standings as part of a tender. Which of the following companies is the most financially stable?
- A. Company A has a high gearing ratio, high liquidity and few fixed assets
- B. Company C has low liquidity, low gearing and increasing sales trend
- C. Company B has low liquidity, a high gearing ratio and increasing sales trends
- D. Company D has high liquidity, low gearing and lots of fixed assets
Answer: D
Explanation:
Explanation
Company D is the strongest. You want a company with high liquidity (this means they can easily pay any debts) and low gearing (meaning that their company isn’t financed by debt). This question comes from p.24 of the CIPS study guide. It doesn’t go into a lot of detail on financial ratios and gearing, as this was covered in Level 4. If you’re rusty on financial ratios and gearing I recommend revising these before the exam.
NEW QUESTION # 34
Which of the following is not a benefit of having a contingency plan?
- A. greater resilience to force majeure events
- B. competitive advantage
- C. increased profits
- D. increased staff morale
Answer: C
Explanation:
Explanation
Contingency plans won’t increase your profit, but they will do the other three things. This is from p.109-110 of the study guide
NEW QUESTION # 35
Which of the following is a quantative method for completing a risk assessment and an alternative to using an impact scale?
- A. impact analysis
- B. 4 Ts
- C. monetary value
- D. rating of 1-5
Answer: C
Explanation:
Explanation
P. 133 of the study guide says ‘it is also possible for organisation to use a quantative method where they quantify the loss in terms of monitory value instead of an impact figure’. Rating 1-5 is incorrect because this is the same as an impact scale. Impact analysis is wrong because this isn’t quantative. 4Ts are the ways you can mitigate risks.
NEW QUESTION # 36
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