Question 1

The trend towards minimizing costs: has resulted in the globalization of supply chains, making supply chains more_________.&#10;A)Susceptible&#10;B)Intricate&#10;C)Both A and B.&#10;D)None of the above.&#10;

Accepted Answer

The trend towards minimizing costs has resulted in the globalization of supply chains, making supply chains more susceptible and intricate.

Question 2

Risk can be stated as__________&#10;A)Risk= f (probability, consequences)&#10;B)Risk= f/I (probability divided by insurance cost)&#10;C)Risk= I+AC (insurance plus accidental costs)&#10;D)All of the above.&#10;

Accepted Answer

Risk includes the possibility of losing some or all of the beginning investment. Different versions of risk are usually measured by calculating the standard deviation of the historical returns or average returns of a specific investment. A high standard deviation indicates a high degree of risk. The correct formula is Risk = f (Probability, Consequences).

Question 3

Risk in terms of supply chains may be related to the _____________.&#10;A)Production/procurement processes&#10;B)Transportation/shipment of the goods&#10;C)Demand markets&#10;D)All of the above.&#10;

Accepted Answer

In supply chains, strategies are employed to manage both every day and exceptional risks based on continuous risk assessment, with the objective of reducing vulnerability and ensuring continuity. Risks may be related to production/procurement processes, transportation/shipment of the goods, and demand markets.

Question 4

Supply chain risks are directly mirrored in a firm's____________, and valued in the financial market.&#10;A)Financial analysis&#10;B)Financial cycles&#10;C)Predictability&#10;D)Financial performance&#10;

Accepted Answer

Supply chain risks are directly mirrored in a firm's financial performance and valued in the financial market. For instance, it has been estimated that the average stock price reaction to supply-demand incongruity announcements was approximately -6.8%. Moreover, supply chain mismatches can cause a firm's equity risk to rise by 13.50% on average after the disruption announcements.

Question 5

______________ consist of any uncertainties arising from the supply chain and environmental connections.&#10;A)Biological risk sources&#10;B)Environmental risk sources&#10;C)Natural risk sources&#10;D)Pre-natural environmental sources&#10;

Accepted Answer

Environmental risk sources consist of any uncertainties arising from the supply chain and environmental connections. These may be due to accidents (fires, explosions, etc.), manmade events (terrorist activities), or natural disasters (floods, earthquakes, and other extreme weather conditions).

Question 6

What best describes the term inertia?&#10;A)Risks due to lack of responsiveness to changing environmental conditions.&#10;B)Risks caused by shipment problems.&#10;C)Risks caused by the holding up of merchandise on docks.&#10;D)Risks due to lack of transportation and labor.&#10;

Accepted Answer

Inertia are risks are due to a lack of responsiveness to changing environmental conditions and market signals. Flexibility may be sacrificed, especially in global supply chains, where there may be an emphasis on cost reduction.

Question 7

Which of the following is considered an important adverse consequence?&#10;A)Financial consequences.&#10;B)Negative health and safety impacts.&#10;C)Reputation damage.&#10;D)All of the above.&#10;

Accepted Answer

The three most important adverse consequences are financial consequences, negative health and safety impacts, and reputation damage.

Question 8

__________ is a mitigation approach that focuses on low-cost, decentralized capacity for predictable demand.&#10;A)Decrease capacity&#10;B)Increase capacity&#10;C)High volume capacity&#10;D)Increase responsiveness&#10;

Accepted Answer

Increase capacity is a mitigation approach that focuses on low-cost, decentralized capacity for predictable demand and builds a centralized capacity for unpredictable demand. It increases decentralization as the cost of capacity drops.

Question 9

A/An___________ approach favors centralizing redundancy for low- volume products in a few flexible suppliers.&#10;A)Acquire redundant suppliers&#10;B)High redundancy for low-volume products&#10;C)Acquire short life cycle products&#10;D)None of these.&#10;

Accepted Answer

An acquire redundant supplier approach favors centralizing redundancy for low-volume products in a few flexible suppliers. It favors a more redundant supply for high-volume products and therefore less redundancy for low-volume products.

Question 10

What type of mitigation approach favors responsiveness over cost for short life cycle products?&#10;A)Accelerating responsiveness.&#10;B)Increase responsiveness.&#10;C)Cycle responsiveness.&#10;D)None of these.&#10;

Accepted Answer

An increase responsiveness mitigation approach favors cost over responsiveness for a commodity and responsiveness over cost for short life cycle products.

Deck 12: Risk