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CIPS Managing Supply Chain Risk Sample Questions (Q100-Q105):

NEW QUESTION # 100
Which of the following are factors which can lead to a supplier becoming insolvent? Select THREE

• A. uncontrolled expenditure
• B. attrition of key employees
• C. a high financial ratio
• D. increased market share
• E. fraudulent activity

Answer: A,B,E Explanation:
Explanation
1 2 and 3 are factors which can lead to a supplier becoming insolvent. 4- increased market share is a good thing, as it indicates the supplier is doing better than their rivals. A high financial ratio is also a good thing as it shows they have more assets than debt - so this is not a sign of insolvency. See p.24 for 'Supplier Risks'
NEW QUESTION # 101
Fraud committed by an employee within a business is what type of risk?

• A. procurement risk
• B. economic risk
• C. external risk
• D. internal risk

Answer: D Explanation:
Explanation
This is an internal risk. A procurement risk would be issues with a supplier or contract, and economic risk would be exchange rate fluctuations etc. See p.118 for more information on internal risks- it's a known exam topic
NEW QUESTION # 102
Robot Ltd manufactures high end robots. A lot of value is tied up in the stock that it holds within its warehouse as each robot is worth several thousand pounds. The company has decided to enlist the services of a third party provider for disaster recovery, to help them shape a plan for if something were to happen to the stock, such as a flood. Is this the correct thing for Robot Ltd to do?

• A. no- Robot Ltd should create a cross-functional team to draw up the plan as internal stakeholders will understand the risks better than a 3rd party
• B. yes- a 3rd party can provide broader experience and expertise
• C. no - a 3rd party can only help in the solution stage of disaster recovery, not the planning stage
• D. yes- a third party is a cheap option for disaster recovery planning

Answer: B Explanation:
Explanation
The correct answer is 1 - the 3rd party can provide broader experience and expertise. They can advise on best practice and will know how to advise Robot Ltd as they will have experience across a wide range of companies. This is explained on p.91 of the study guide
NEW QUESTION # 103
Which of the following will you put into box 2?

• A. treat
• B. tolerate
• C. terminate
• D. transfer

Answer: A Explanation:
Explanation
The correct answers are as follows:
Table Description automatically generated

Cashflow issues can lead to serious financial problems and the company going bust. Therefore this risk must be treated.
NEW QUESTION # 104
Which of the following will you put into box 2?

• A. operational
• B. strategic
• C. hazard
  (Correct)
• D. financial

Answer: C Explanation:
Explanation
Table Description automatically generated

NEW QUESTION # 105
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