Supply Chain Risk Management
Certification Examination Questions
And Correct Answers (Verified Answers)
Plus Rationales 2026 Q&A | Instant
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Question 1
Which of the following best defines supply chain risk?
A. The probability of a disruption occurring in the inbound logistics function only
B. The potential for any event that adversely affects the achievement of supply
chain objectives
C. The financial loss due to supplier price increases
D. The variation in customer demand that leads to stockouts
Answer: B. The potential for any event that adversely affects the achievement of
supply chain objectives
Rationale: Supply chain risk is broadly defined as any potential event or
condition that can negatively impact the supply chain’s ability to meet its goals,
including operational, financial, reputational, and strategic objectives. Options
A, C, and D are too narrow and represent specific types of risk rather than the
holistic definition.
Question 2
Which type of risk arises from disruptions in the flow of materials, information, or
finances across tier-1 and tier-2 suppliers?
A. External risk
,B. Internal risk
C. Network risk
D. Demand risk
Answer: C. Network risk
Rationale: Network risk pertains to disruptions in the interconnected web of
suppliers, logistics providers, and customers. It specifically involves failures in
the flow of materials, information, or payments across multiple tiers. External
risk is broader, internal risk is firm-centric, and demand risk focuses on demand
variability.
Question 3
What is the primary purpose of a risk register in supply chain risk management?
A. To record all supplier contact information
B. To document identified risks, their likelihood, impact, and mitigation actions
C. To track inventory levels across warehouses
D. To calculate the total cost of ownership for each supplier
Answer: B. To document identified risks, their likelihood, impact, and mitigation
actions
Rationale: A risk register is a foundational tool in risk management that
systematically captures risk details, including probability, severity, ownership,
and response plans. It is not used for supplier contacts, inventory tracking, or
cost calculations, although those may be linked indirectly.
Question 4
Which of the following is a proactive risk management strategy?
A. Purchasing business interruption insurance after a disaster
B. Conducting a supplier financial health assessment before contracting
C. Using safety stock to recover from a sudden demand spike
D. Implementing a crisis communication plan only after a recall
,Answer: B. Conducting a supplier financial health assessment before contracting
Rationale: Proactive strategies are implemented before a risk event occurs to
prevent or reduce its impact. Assessing supplier financial health is preventive.
Insurance (A) and safety stock (C) are reactive or mitigating after the fact; crisis
communication after a recall (D) is reactive.
Question 5
In the context of supply chain resilience, what does redundancy refer to?
A. Eliminating all single points of failure by duplicating critical assets
B. Reducing the number of suppliers to increase efficiency
C. Standardizing parts across product lines
D. Outsourcing logistics to a single 3PL provider
Answer: A. Eliminating all single points of failure by duplicating critical assets
Rationale: Redundancy involves having backup capacity, inventory, or suppliers
to ensure continuity if primary assets fail. It is a key resilience tactic. Options B,
C, and D reduce redundancy and increase concentration risk.
Question 6
Which framework is commonly used for classifying supply chain risks into
categories such as supply, demand, operational, and external?
A. COSO ERM
B. ISO 31000
C. SCOR model
D. APICS CPIM
Answer: C. SCOR model
Rationale: The Supply Chain Operations Reference (SCOR) model categorizes
risks into supply, demand, operational, and external (e.g., natural disasters,
geopolitical). COSO and ISO 31000 are general risk frameworks, and APICS CPIM
is a certification for production and inventory management.
, Question 7
What is the main risk associated with a single-source supplier strategy?
A. Higher unit costs due to lack of competition
B. Complete disruption if that supplier fails
C. Increased complexity in supplier relationship management
D. Longer lead times for custom components
Answer: B. Complete disruption if that supplier fails
Rationale: Single sourcing creates a single point of failure; if that supplier
experiences a disruption, the buyer has no alternative source. While higher costs
and complexity can occur, the most critical risk is total supply interruption.
Question 8
Which quantitative technique assigns probabilities to different risk scenarios and
computes expected monetary values?
A. Failure mode and effects analysis (FMEA)
B. Decision tree analysis
C. Pareto analysis
D. Root cause analysis
Answer: B. Decision tree analysis
Rationale: Decision trees model sequential decisions and uncertain events,
assigning probabilities and payoffs to compute expected values. FMEA prioritizes
failure modes by severity/occurrence/detection, Pareto identifies vital few
causes, and root cause seeks underlying reasons.
Question 9
A company sources raw materials from a region prone to earthquakes. Which risk
treatment is most appropriate?
A. Avoidance – relocate all sourcing to another continent
B. Reduction – implement seismic-resistant packaging and diversify suppliers
Certification Examination Questions
And Correct Answers (Verified Answers)
Plus Rationales 2026 Q&A | Instant
Download Pdf
Question 1
Which of the following best defines supply chain risk?
A. The probability of a disruption occurring in the inbound logistics function only
B. The potential for any event that adversely affects the achievement of supply
chain objectives
C. The financial loss due to supplier price increases
D. The variation in customer demand that leads to stockouts
Answer: B. The potential for any event that adversely affects the achievement of
supply chain objectives
Rationale: Supply chain risk is broadly defined as any potential event or
condition that can negatively impact the supply chain’s ability to meet its goals,
including operational, financial, reputational, and strategic objectives. Options
A, C, and D are too narrow and represent specific types of risk rather than the
holistic definition.
Question 2
Which type of risk arises from disruptions in the flow of materials, information, or
finances across tier-1 and tier-2 suppliers?
A. External risk
,B. Internal risk
C. Network risk
D. Demand risk
Answer: C. Network risk
Rationale: Network risk pertains to disruptions in the interconnected web of
suppliers, logistics providers, and customers. It specifically involves failures in
the flow of materials, information, or payments across multiple tiers. External
risk is broader, internal risk is firm-centric, and demand risk focuses on demand
variability.
Question 3
What is the primary purpose of a risk register in supply chain risk management?
A. To record all supplier contact information
B. To document identified risks, their likelihood, impact, and mitigation actions
C. To track inventory levels across warehouses
D. To calculate the total cost of ownership for each supplier
Answer: B. To document identified risks, their likelihood, impact, and mitigation
actions
Rationale: A risk register is a foundational tool in risk management that
systematically captures risk details, including probability, severity, ownership,
and response plans. It is not used for supplier contacts, inventory tracking, or
cost calculations, although those may be linked indirectly.
Question 4
Which of the following is a proactive risk management strategy?
A. Purchasing business interruption insurance after a disaster
B. Conducting a supplier financial health assessment before contracting
C. Using safety stock to recover from a sudden demand spike
D. Implementing a crisis communication plan only after a recall
,Answer: B. Conducting a supplier financial health assessment before contracting
Rationale: Proactive strategies are implemented before a risk event occurs to
prevent or reduce its impact. Assessing supplier financial health is preventive.
Insurance (A) and safety stock (C) are reactive or mitigating after the fact; crisis
communication after a recall (D) is reactive.
Question 5
In the context of supply chain resilience, what does redundancy refer to?
A. Eliminating all single points of failure by duplicating critical assets
B. Reducing the number of suppliers to increase efficiency
C. Standardizing parts across product lines
D. Outsourcing logistics to a single 3PL provider
Answer: A. Eliminating all single points of failure by duplicating critical assets
Rationale: Redundancy involves having backup capacity, inventory, or suppliers
to ensure continuity if primary assets fail. It is a key resilience tactic. Options B,
C, and D reduce redundancy and increase concentration risk.
Question 6
Which framework is commonly used for classifying supply chain risks into
categories such as supply, demand, operational, and external?
A. COSO ERM
B. ISO 31000
C. SCOR model
D. APICS CPIM
Answer: C. SCOR model
Rationale: The Supply Chain Operations Reference (SCOR) model categorizes
risks into supply, demand, operational, and external (e.g., natural disasters,
geopolitical). COSO and ISO 31000 are general risk frameworks, and APICS CPIM
is a certification for production and inventory management.
, Question 7
What is the main risk associated with a single-source supplier strategy?
A. Higher unit costs due to lack of competition
B. Complete disruption if that supplier fails
C. Increased complexity in supplier relationship management
D. Longer lead times for custom components
Answer: B. Complete disruption if that supplier fails
Rationale: Single sourcing creates a single point of failure; if that supplier
experiences a disruption, the buyer has no alternative source. While higher costs
and complexity can occur, the most critical risk is total supply interruption.
Question 8
Which quantitative technique assigns probabilities to different risk scenarios and
computes expected monetary values?
A. Failure mode and effects analysis (FMEA)
B. Decision tree analysis
C. Pareto analysis
D. Root cause analysis
Answer: B. Decision tree analysis
Rationale: Decision trees model sequential decisions and uncertain events,
assigning probabilities and payoffs to compute expected values. FMEA prioritizes
failure modes by severity/occurrence/detection, Pareto identifies vital few
causes, and root cause seeks underlying reasons.
Question 9
A company sources raw materials from a region prone to earthquakes. Which risk
treatment is most appropriate?
A. Avoidance – relocate all sourcing to another continent
B. Reduction – implement seismic-resistant packaging and diversify suppliers
