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CIPS Managing Supply Chain Risk Sample Questions (Q108-Q113):

NEW QUESTION # 108
Petra Ltd is a manufacturer of upmarket baked goods and they have a range which is gluten free and therefore suitable for customers who have an intolerance of wheat. For this reason Petra Ltd is very strict about the ingredients that it sources. It's main supplier has provided written agreement that they will test all ingredients in their processing factory to ensure that they are suitable for the gluten free diet before delivery is made, and once delivery is made the materials will be deemed accepted by the buyer. Is Petra right to accept this arrangement?

A. yes- this reduces the risk of unsuitable materials entering Petra's factory
B. yes- this arrangement places the risk on the supplier rather than Petra
C. no - this arrangement is unacceptable and Petra should void the contract
D. no- Petra should arrange for additional tests to be conducted on the deliveries and only accept them once these tests have been completed

Answer: D

Explanation:
Explanation
Petra should arrange for additional tests to be conducted. This question is based on a real example in the exam.
In this scenario there is still significant risk for Petra even if the supplier is testing the materials. The supplier could miss something, or forge the results with disastrous consequences for Petra's customers. Moreover it would severely damage Petra's reputation. Therefore the wise thing would be for Petra to conduct additional tests in-house to ensure they are happy with the products and only then accept them. This could be an audit of
10% of deliveries to ensure compliance. Acceptance Testing is discussed in the textbook on p.70

NEW QUESTION # 109
Which of the following is an internal risk for a company?

A. supplier's factory burns down
B. exchange rate fluctuations
C. government policy changes
D. lack of available personnel

Answer: D

Explanation:
Explanation
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

NEW QUESTION # 110
Which of the following are key areas of ISO 26000 Social Responsibility? Select THREE.

A. consumer issues
B. human rights
C. efficient systems
D. quality management
E. organisational governance

Answer: A,B,E

Explanation:
Explanation
1 3 and 4 are the correct answers. There are 7 key areas that ISO 26000 focuses on. As well as these three, there is also labour practices, the environment, fair operating practices and community involvement. See p. 51 of the study guide. ISOs are a popular exam topic so do revise these before the exam.

NEW QUESTION # 111
What is the final stage of Deming's Plan - Do - Check cycle which is encouraged by ISO9001?

A. Act
B. Assess
C. Improve
D. Review

Answer: A

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

NEW QUESTION # 112
Which of the following will you put into box 3?

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

Answer: D

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

The consequences of this risk are huge, therefore the risk should be terminated. This means the cause of the risk is taken away (i.e. the animal testing).

NEW QUESTION # 113
......

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