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L5M2 Practice Exam Questions and Answers

Managing Supply Chain Risk

Last Update 21 hours ago
Total Questions : 120

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Question # 1

Which of the following legal principles means that a person can only claim the value of a loss once, regardless of if they have multiple insurance policies?

Options:

A.  

utmost good faith

B.  

insurable interest

C.  

contribution

D.  

subrogation

Discussion 0
Question # 2

Which of the following are factors which can lead to a supplier becoming insolvent? Select THREE

Options:

A.  

fraudulent activity

B.  

attrition of key employees

C.  

uncontrolled expenditure

D.  

increased market share

E.  

a high financial ratio

Discussion 0
Question # 3

Which of the following will you put into box 5?

Options:

A.  

CSR Policy

B.  

Quote in Buyer's Currency

C.  

Force Majeure

D.  

Standardise Payment Terms

Discussion 0
Question # 4

Which of the following is a method for approaching risks?

Options:

A.  

tolerate

B.  

translate

C.  

transport

D.  

take out

Discussion 0
Question # 5

A large multi-national corporation has just been awarded a credit rating of C by the three main credit rating agencies. What does this score signify?

Options:

A.  

low risk

B.  

average risk

C.  

substantial risk

D.  

in default

Discussion 0
Question # 6

Maple Tree Limited is a Canadian company who has recently signed a new contract with a supplier who is based in China. Maple Tree Limited will be buying a raw material with a reputation for severe price fluctuations. Which of the following would help mitigate the risk that this poses? Select TWO options

Options:

A.  

quote in the supplier's currency

B.  

quote in the buyer's currency

C.  

use a forward exchange contract

D.  

fix the exchange rate at the current rate

Discussion 0
Question # 7

Chloe is a procurement manager at Ruby Company. She has been asked to join a cross-functional team to review the company's risk appetite, potential risks within the supply chain and brainstorm mitigating actions. Chloe has suggested that the cross-functional team should first draw up a list of potential supply chain risks and potential strategies to overcome the risks. Is Chloe correct?

Options:

A.  

yes- the first thing the team should look at are the risks and categorise these by topic

B.  

yes- the team should focus on creating a risk register and strategies for mitigating risks as quickly as possible

C.  

no- the team should review the company's risk appetite before creating a risk register

D.  

no- Chloe should first speak with suppliers before drawing up the list of potential supply chain risks

Discussion 0
Question # 8

Which of the following is an example of hedging?

Options:

A.  

dual-sourcing

B.  

insurance

C.  

audits

D.  

risk assessments

Discussion 0
Question # 9

A black swan event is what type of occurrence?

Options:

A.  

an occurrence with a good outcome

B.  

an occurrence with a negative outcome

C.  

a common occurrence

D.  

an unusual occurrence

Discussion 0
Question # 10

According to Kid Sadgrove, fraud can take place when four pre-conditions exist. Which of the following is not one of those pre-conditions?

Options:

A.  

motive

B.  

access

C.  

opportunity

D.  

attractive assets

Discussion 0
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