Supply Chain Risk Management MCQs

1. What is supply chain risk management?
(A) Managing employee recruitment activities
(B) Increasing inventory without planning
(C) Identifying, assessing, and controlling risks across the supply chain
(D) Managing only marketing activities

2. What is the primary objective of supply chain risk management?
(A) Reducing disruptions and ensuring business continuity
(B) Increasing operational uncertainty
(C) Eliminating supplier communication
(D) Increasing transportation delays

3. Which of the following is an example of supply chain risk?
(A) Improved supplier relationships
(B) Accurate demand forecasting
(C) Effective inventory management
(D) Unexpected supplier failure

4. What is supply risk?
(A) Risk associated with customer advertising
(B) Risk of disruption in the supply of materials or products
(C) Risk associated with employee promotion
(D) Risk of changes in office design

5. What is demand risk in supply chain management?
(A) Risk of warehouse construction delays
(B) Risk of supplier bankruptcy only
(C) Risk arising from unexpected changes in customer demand
(D) Risk of employee absenteeism

6. Which of the following is an operational risk?
(A) Production equipment failure
(B) Political instability in another country
(C) Currency exchange fluctuations
(D) Changes in international trade agreements

7. What is geopolitical risk in a global supply chain?
(A) Risk caused by product packaging
(B) Risk of warehouse overcrowding
(C) Risk of incorrect inventory records
(D) Risk arising from political conflicts and government decisions

8. What is the first step in the supply chain risk management process?
(A) Risk elimination
(B) Risk identification
(C) Risk transfer
(D) Risk acceptance

9. What is risk assessment?
(A) Ignoring potential threats
(B) Increasing business uncertainty
(C) Evaluating the likelihood and potential impact of risks
(D) Eliminating all suppliers

10. What is a risk mitigation strategy?
(A) Taking actions to reduce the likelihood or impact of a risk
(B) Increasing exposure to disruptions
(C) Avoiding all risk monitoring
(D) Eliminating customer communication

11. What is supply chain resilience?
(A) The ability to avoid all business activities
(B) The ability to increase operational costs
(C) The ability to depend on a single supplier
(D) The ability to withstand disruptions and recover operations

12. Which strategy helps reduce dependence on a single supplier?
(A) Supplier isolation
(B) Multiple sourcing
(C) Single sourcing
(D) Supplier exclusion

13. What is contingency planning?
(A) Planning only routine business activities
(B) Eliminating alternative suppliers
(C) Preparing alternative actions for unexpected disruptions
(D) Avoiding emergency procedures

14. What is business continuity planning?
(A) Preparing an organization to maintain or restore essential operations during disruptions
(B) Planning employee entertainment activities
(C) Increasing production interruptions
(D) Eliminating emergency communication

15. Which of the following is an example of a natural disaster affecting supply chains?
(A) Employee promotion
(B) Product redesign
(C) Advertising campaign
(D) Earthquake

16. How can excessive dependence on one transportation route affect a supply chain?
(A) It guarantees uninterrupted deliveries
(B) It increases vulnerability to transportation disruptions
(C) It eliminates logistical risks
(D) It improves supplier diversification

17. What is inventory buffering?
(A) Eliminating all safety stock
(B) Reducing inventory visibility
(C) Maintaining additional inventory to protect against supply disruptions
(D) Preventing stock replenishment

18. What is safety stock primarily maintained for?
(A) Protecting against unexpected demand and supply fluctuations
(B) Increasing unnecessary storage activities
(C) Replacing demand forecasting
(D) Eliminating inventory management

19. What is supplier risk assessment?
(A) Measuring customer satisfaction only
(B) Evaluating employee performance
(C) Determining product advertising costs
(D) Evaluating suppliers' reliability, financial stability, and operational capabilities

20. What is cyber risk in supply chain management?
(A) Risk of physical warehouse damage only
(B) Risk of digital attacks, data theft, or information system disruption
(C) Risk of seasonal demand changes
(D) Risk of product packaging defects

21. Which practice can help reduce cybersecurity risks in a supply chain?
(A) Sharing passwords publicly
(B) Ignoring software updates
(C) Using access controls and regular security monitoring
(D) Disabling security systems

22. What is the bullwhip effect as a supply chain risk?
(A) Increasing demand fluctuations as orders move upstream through the supply chain
(B) A continuous decrease in transportation costs
(C) A reduction in supplier numbers
(D) Improved inventory accuracy

23. What is risk transfer?
(A) Ignoring identified risks
(B) Increasing exposure to hazards
(C) Eliminating all business operations
(D) Shifting the financial consequences of certain risks to another party

24. Which of the following is an example of risk transfer?
(A) Increasing warehouse inventory
(B) Purchasing insurance against shipment losses
(C) Selecting additional suppliers
(D) Improving employee training

25. What does risk avoidance mean?
(A) Accepting every possible risk
(B) Transferring all risks to customers
(C) Eliminating an activity or exposure that creates an unacceptable risk
(D) Ignoring potential disruptions

26. What is a risk register?
(A) A document that records identified risks, their assessment, and response plans
(B) A record of employee attendance
(C) A list of customer advertisements
(D) A report of office maintenance expenses

27. What is the purpose of supply chain monitoring?
(A) Preventing information sharing
(B) Increasing uncertainty
(C) Eliminating supplier evaluation
(D) Detecting potential disruptions and changes in risk conditions

28. What is a key benefit of supply chain diversification?
(A) Greater dependence on one market
(B) Reduced exposure to disruptions from a single source or location
(C) Elimination of all operational costs
(D) Increased supplier concentration

29. What does supply chain risk prioritization involve?
(A) Treating every risk as equally important
(B) Ignoring low-probability risks completely
(C) Ranking risks according to their likelihood and potential impact
(D) Managing only financial risks

30. What is the ultimate goal of effective supply chain risk management?
(A) Ensuring continuity, minimizing disruptions, and protecting supply chain performance
(B) Increasing operational uncertainty
(C) Eliminating cooperation among suppliers
(D) Increasing unnecessary inventory losses