CIPS L5M2 Exam Practice Test Instant Access

Question 1

A black swan event is what type of occurrence?

Aan occurrence with a good outcome

Ban occurrence with a negative outcome

Ca common occurrence

Dan unusual occurrence

Answer : D

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

Question 2

Which of the following risks would likely be tolerated by a company?

Ano risks should be tolerated

Bopportunities which are low risk and low impact

Copportunities which are low risk and high impact

Dopportunities which are high risk and low impact

Answer : B

Low risk and low impact should be tolerated. This is from the Probability and Impact Matric from p.122. The other two options should be either transferred or treated.

Question 3

Which of the following is an internal risk for a company?

Asupplier's factory burns down

Bexchange rate fluctuations

Cgovernment policy changes

Dlack of available personnel

Answer : D

Lack of personnel is an internal risk- the others are external risks. Internal and external risks is a known topic for the exam so see p.116-117 for more information

Question 4

Which of the following is not a benefit of having a contingency plan?

Acompetitive advantage

Bincreased staff morale

Cgreater resilience to force majeure events

Dincreased profits

Answer : D

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

Question 5

What is the purpose of a Disaster Recovery Plan?

Ato get critical systems operational

Bto detect and react to an emergency situation, focusing on people's safety

Cto return to business as usual

Dto increase output to normal levels following a disaster

Answer : A

A Disaster Recovery Plan is to get critical systems operational following an emergency. This is implemented hours after the event. Option 2 describes Incident Response and Option 3 describes a Business Continuity Plan. Option 4 is made up. These definitions and the timeline of when they're activated is on p.108 of the study guide

Question 6

What is the final stage of Deming's Plan - Do - Check cycle which is encouraged by ISO9001?

AImprove

BReview

CAct

DAssess

Answer : C

Act is the final stage. See p.25 for a diagram of the cycle.

Question 7

Rabbit Manufacturing operates several factories which create stuffed animals. As these stuffed animals are mainly bought for children, it is extremely important that the quality of the product is assured, and there are no dangerous or small parts which could become choking hazards. Which of the following are appraisal costs that the company should undertake in order to mitigate the risk of poor quality products entering the market?

Aquality control inspections

Busing a pro-active quality management system

Cintroduce a 0 defect approach

Dstaff training to ensure higher quality products are made

Answer : A

Of these four answers only one is an appraisal cost and that is answer 1. The other three options are prevention costs. There is a table of appraisal costs and prevention costs on p. 26 Appraisal costs are reactive- they're done after the product is manufactured. Preventative costs are actions taken in quality assurance.

CIPS L5M2 Managing Supply Chain Risk Exam Practice Test