Week 12 Progress Exam

QUESTION 1

1. What is the term for a financial transaction in which one party agrees to buy/sell a fixed amount of a given currency at a fixed exchange rate on a fixed date in the future?

	a.	Finance charge
	b.	Letter of credit
	c.	Currency hedging/futures
	d.	Global conversion

QUESTION 2

1. The ISO 31000 process framework is iterative, scalable, and adaptable in scope and organizational context.

True

False

QUESTION 3

1. What can an organization do if a competitor sets up a website that looks very similar to your successful website and has a very similar name and web address?

	a.	File a trademark on your site and its design.
	b.	Advertise that this knockoff site exists but is not authentic.
	c.	Create a Contract for the International Sales of Goods.
	d.	Seek trade dress protection.

QUESTION 4

1. Contingency plans to avoid business disruption should

	a.	ensure that all partners have plans to continue functioning regardless of cost.
	b.	not be limited to keeping extra inventory.
	c.	be the responsibility of all department managers.
	d.	be developed by the nucleus firm for all partners.

QUESTION 5

1. In general, which area of supply chain risk is the least developed at most organizations because it is a new area with many rapidly changing regulations?

	a.	Supply risk
	b.	Demand risk
	c.	Supply chain strategy and implementation process risk
	d.	Environmental risk

QUESTION 6

1. What is one example of a preventive action plan for supplier availability risk?

	a.	Audit suppliers on capacity resilience.
	b.	Shift all supply to a supplier that was on the finalist list.
	c.	Use sampling and inspection.
	d.	Use large orders for priority.

QUESTION 7

1. If the only plan an organization can devise to respond to a risk proactively would cost the organization more than the expected monetary value of the risk without any response, what should the organization do?

	a.	Accept.
	b.	Avoid rather than respond.
	c.	Transfer.
	d.	Mitigate rather than respond.

QUESTION 8

1. When an organization cross-references the impact of potential risk situations to the possibility of their occurring, they create a ____________________ .

	a.	risk mitigation plan.
	b.	risk rating.
	c.	prioritization plan.
	d.	risk blueprint.

QUESTION 9

1. If a fleet of delivery trucks is in relatively poor maintenance, this is a red flag for what type of supply risk?

	a.	Poor payables processing
	b.	Subcontractor availability
	c.	Labor disruption
	d.	Transportation lead time

QUESTION 10

1. Who bears the risk of loss in a FOB Origin contract once the carrier is on route to its destination?

	a.	Buyer
	b.	Seller
	c.	Carrier
	d.	Bank issuing letter of credit

QUESTION 11

1. What factors determine an organization's risk tolerance? (Identify all that apply.)

	a.	Time needed to respond to an emergency
	b.	Likelihood that the risk will occur
	c.	Severity of loss
	d.	Organization's ability to rebuild its supply chain

QUESTION 12

1. EMV, Expected Monetary Value, can be used to evaluate the risk of a decision that could have more than one outcome.

True

False

QUESTION 13

1. An organization has had a number of its trucks hijacked while traveling through a country. Which of the following is a mitigation strategy for this situation?

	a.	Find an alternate supplier in a different part of the world.
	b.	Purchase more insurance.
	c.	Have the truck piggyback on a railway flatcar while going through that country.
	d.	Raise prices to compensate for the loss in profits from the stolen goods and vehicles.

QUESTION 14

1. Which of the following indicates a quality that supply chain risk management must have?

	a.	Systemwide focus
	b.	Mitigation responses for all identified risks
	c.	Transfer of all risks to suppliers
	d.	Independence from partners

QUESTION 15

1. Currency exchange risk affects not only the effective prices for supplies and for sales to customers, but also operating and storage costs and inventory value

True

False

QUESTION 1

1. Match each of the terms provided to the correct definition.

\Delphi method

intellectual property

ISO 31000

risk rating

risk register

a.	A numerical assessment of the risk associated with a supplier, customer, or product, normalized and used for comparison purposes.
b.	A report that has summary information on qualitative risk analysis, quantitative risk analysis, and risk response planning. It contains all identified risks and associated details.
c.	A qualitative forecasting technique where the opinions of experts are combined in a series of iterations. The results of each iteration are used to develop the next, so that convergence of the experts' opinions is obtained. This is also called panel consensus.
d.	A standard that outlines principles and a set of guidelines to manage risk in any endeavor. It includes guidelines for understanding risk, developing a risk management policy, integrating risk management into organizational processes (including accountability and responsibility), and establishing internal and external risk communication processes.
e.	Various legal entitlements that attach to certain names, written and recorded media, and inventions.

QUESTION 2

1. Match each of the following terms to the correct definition.

hedge

ISO 28000

sensitivity analysis

risk avoidance

risk response plan

a.	A document, reviewed at regular intervals, that defines known risks including desription, cause, likelihood, costs, and proposed responses. It also identified current status on each risk.
b.	It involves changing a plan to eliminate a risk or to protect plan objectives from its impact.
c.	A technique for determining how much an expected outcome or result will change in response to a given change in an input variable. It is used to isolate the impact of of one variable in isolation and used to study risks that have monetary impacts.
d.	An international standard that specifies the requirements for a security management system, including those aspects critical to security assurance of the supply chain.
e.	An action taken in an attempt to shield the company from an uncertain event such as a strike, price increase, or currency reevaluation.