Which of the following stages would come first within a risk assessment?
Answer : D
analyse is the correct answer. The full process is: establish context- identify- analyse - evaluate - treat - monitor and review. This is from p.122
Question 2
A financial instrument used by airlines to fix the price of fuel over a period of time is known commonly as a what?
Answer : B
This is a 'swap' and is explained on p.94. This is a type of 'hedging' but there is no such thing as 'a hedge'. For a more in-depth look at Swaps see: https://www.mercatusenergy.com/blog/bid/77634/an-introduction-to-airline-fuel-hedging-strategies-swaps
Question 3
Kieran works in the manufacturing industry and his company have just implemented LEAN production processes. Will this increase or decrease the risks in relation to security of supply?
Answer : B
2 'increase security of supply risks as there is less buffer stock held on site' is the correct answer. With Lean manufacturing there is little or no buffer stock held. This means that if a supplier doesn't deliver on time, the whole manufacturing process will have to come to a stop until new supplies arrive. A risk of Lean Manufacturing is that you become too reliant on suppliers, and if there is a scarcity of resources or an issue with the supply chain, you are more exposed. See p.26-27 for more information on Security of Supply Risks.
Question 4
Which of the following insurances would provide cover in the eventuality that your supplier's place of business flooded and this affected your deliveries?
Answer : B
This is 'contingent business interruption' insurance. This protects you if anything were to happen to your suppliers' premises. Business Interruption Insurance would cover you if something were to happen to your premises. See p.99
Question 5
Which of the following is an internal risk for a company?
Answer : D
Lack of personnel is an internal risk- the others are external risks. Internal and external risks is a known topic for the exam so see p.116-117 for more information
Question 6
Dave is a procurement manager for a chocolate factory who is running a tender to source cocoa from a new supplier. The tender is a huge opportunity for suppliers and the contract would be worth millions of pounds. Dave has passed some information about the tender to one of the bidders in exchange for a free holiday to Barbados. Which of the following types of fraud has Dave committed?
Answer : D
This is an example of bribery. The trip to Barbados is the bribe. For more information on these types of fraud see p.19
Question 7
Logistics Risks are caused by...
Answer : C
Extended supply chains create logistic risks. This is from p. 29. Types of risks is a popular exam topic but the questions are usually quite straightforward like this.
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