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L5M2 Managing Supply Chain Risk is now Stable and With Pass Result | Test Your Knowledge for Free

L5M2 Practice Questions

Managing Supply Chain Risk

Last Update 17 hours ago
Total Questions : 120

Dive into our fully updated and stable L5M2 practice test platform, featuring all the latest CIPS Level 5 Advanced Diploma in Procurement and Supply exam questions added this week. Our preparation tool is more than just a CIPS study aid; it's a strategic advantage.

Our CIPS Level 5 Advanced Diploma in Procurement and Supply practice questions crafted to reflect the domains and difficulty of the actual exam. The detailed rationales explain the 'why' behind each answer, reinforcing key concepts about L5M2. Use this test to pinpoint which areas you need to focus your study on.

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Question # 1

Which of the following legal principles means that a person can only claim the value of a loss once, regardless of if they have multiple insurance policies?

Options:

A.  

utmost good faith

B.  

insurable interest

C.  

contribution

D.  

subrogation

Discussion 0
Question # 2

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

Options:

A.  

fraudulent activity

B.  

attrition of key employees

C.  

uncontrolled expenditure

D.  

increased market share

E.  

a high financial ratio

Discussion 0
Question # 3

Which of the following will you put into box 5?

Options:

A.  

CSR Policy

B.  

Quote in Buyer's Currency

C.  

Force Majeure

D.  

Standardise Payment Terms

Discussion 0
Question # 4

Which of the following is a method for approaching risks?

Options:

A.  

tolerate

B.  

translate

C.  

transport

D.  

take out

Discussion 0
Question # 5

A large multi-national corporation has just been awarded a credit rating of C by the three main credit rating agencies. What does this score signify?

Options:

A.  

low risk

B.  

average risk

C.  

substantial risk

D.  

in default

Discussion 0
Question # 6

Maple Tree Limited is a Canadian company who has recently signed a new contract with a supplier who is based in China. Maple Tree Limited will be buying a raw material with a reputation for severe price fluctuations. Which of the following would help mitigate the risk that this poses? Select TWO options

Options:

A.  

quote in the supplier's currency

B.  

quote in the buyer's currency

C.  

use a forward exchange contract

D.  

fix the exchange rate at the current rate

Discussion 0
Question # 7

Chloe is a procurement manager at Ruby Company. She has been asked to join a cross-functional team to review the company's risk appetite, potential risks within the supply chain and brainstorm mitigating actions. Chloe has suggested that the cross-functional team should first draw up a list of potential supply chain risks and potential strategies to overcome the risks. Is Chloe correct?

Options:

A.  

yes- the first thing the team should look at are the risks and categorise these by topic

B.  

yes- the team should focus on creating a risk register and strategies for mitigating risks as quickly as possible

C.  

no- the team should review the company's risk appetite before creating a risk register

D.  

no- Chloe should first speak with suppliers before drawing up the list of potential supply chain risks

Discussion 0
Question # 8

Which of the following is an example of hedging?

Options:

A.  

dual-sourcing

B.  

insurance

C.  

audits

D.  

risk assessments

Discussion 0
Question # 9

A black swan event is what type of occurrence?

Options:

A.  

an occurrence with a good outcome

B.  

an occurrence with a negative outcome

C.  

a common occurrence

D.  

an unusual occurrence

Discussion 0
Question # 10

According to Kid Sadgrove, fraud can take place when four pre-conditions exist. Which of the following is not one of those pre-conditions?

Options:

A.  

motive

B.  

access

C.  

opportunity

D.  

attractive assets

Discussion 0
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