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CIPS Managing Supply Chain Risk Sample Questions (Q115-Q120):
NEW QUESTION # 115
What would happen if a company enacts its Contingency Agreement following a natural disaster?
- A. they will be able to claim on insurance
- B. they will be able to breach any contracts that it has
- C. they will receive operational help from a third party
- D. they will receive a financial pay-out
Answer: C
Explanation:
Explanation
They will receive operational help from a third party is the correct answer. Unlike insurance, a contingency plan provides operational help, not just financial. This could be in providing an emergency workspace, helping to get IT systems back up and running or providing emergency air freight. This is explained on p.91-92 of the study guide
NEW QUESTION # 116
Logistics Risks are caused by...
- A. extended supply chains
- B. customer expectations
- C. economic instability
- D. heightened ethical standards
Answer: A
Explanation:
Explanation
Extended supply chains create logistic risks. This is from p. 29. Types of risks is a popular exam topic but the questions are usually quite straightforward like this.
NEW QUESTION # 117
John is a mid-level manager and has created a risk / reward matrix about four potential opportunities at his company White Ducky Limited. He will present his research to a board meeting next week. He has categorised the four opportunities as the following. Which of these opportunities should John recommend the board
'consider'? Select TWO.
- A. high risk/ high reward
- B. high risk/ low reward
- C. low risk / high reward
- D. low risk/ low reward
Answer: A,D
Explanation:
Explanation
High risk/ high reward, and low risk/ low reward are the options that should be CONSIDERED. This is according to the risk/ reward matrix on p. 6. Items that are low risk/ high reward should be PROGRESSED and items which are high risk / low reward should be AVOIDED.
NEW QUESTION # 118
Which of the following statements about binomial distribution are true? Select THREE
- A. they are based on continuous events
- B. each trial has the same probability
- C. there are only two outcomes
- D. the events of one trial will impact on the next one
- E. there is only one outcome per event
Answer: B,C,E
Explanation:
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
NEW QUESTION # 119
Which of the following will you put into box 1?
- A. treat
- B. tolerate
- C. terminate
- D. transfer
Answer: D
Explanation:
Explanation
The correct answers are as follows:
Table Description automatically generated
Nothing can be done to change this risk (you can't stop an earthquake from happening), so you therefore need to transfer the risk to another party, or include for this within a contract.
NEW QUESTION # 120
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