L5M2 CIPS Managing Supply Chain Risk Free Practice Exam Questions (2025 Updated)

Explanation

The correct answers are as follows:

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The consequences of this risk are huge, therefore the risk should be terminated. This means the cause of the risk is taken away (i.e. the animal testing).

Explanation

analyse is the correct answer. The full process is: establish context- identify- analyse - evaluate - treat - monitor and review. This is from p.122

Explanation

Trade secrets are used for recipes- they're suitable for confidential information that gives an organisation a competitive edge. For a detailed explanation of the four types of IP cover see p. 64 of the study guide

Explanation

This is from ILO- the International Labour Organisation - see p.49 of the textbook. You should recognise all four of these acronyms as they come up in this module UN= United Nations - they have the Guiding Principles, ISO = produce standards for business practices and ETI = Ethical Trading Initiative - they have a base code for labour practices.

Explanation

The correct answers are as follows:

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Cashflow issues can lead to serious financial problems and the company going bust. Therefore this risk must be treated.

Explanation

Risk Management = ISO31000. Learn the ISOs for the exam as it's a popular exam topic. 31000 is explained on p. 140. As well as the numbers, you should also learn the guiding principles of each ISO for the exam.

Explanation

The correct answers are as follows:

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CSR= Corporate Social Responsibility

Explanation

The hurricane is the force majeure event. Natural disasters such as this, or any events outside of the parties' control could be considered force majeure. This is a popular exam topic - see p. 66 in the study guide

Explanation

This is an internal risk. A procurement risk would be issues with a supplier or contract, and economic risk would be exchange rate fluctuations etc. See p.118 for more information on internal risks- it's a known exam topic

Explanation

The correct answer is 3. Firstly you can half the number of responses by looking at the yes / no. The UK Bribery Act is further reaching than the FCPA. Therefore the statement is False. You can therefore discount the options that start with yes. Of the two remaining statements only one of them is true and that is number 3- the Bribery Act extends to third parties and the FCPA does not. Option 4 is incorrect as the Bribery Act DOES account for facilitation payments. Its to FCPA that doesn't. This is explained on p. 36 of the study guide

Explanation

Contingency plans won't increase your profit, but they will do the other three things. This is from p.109-110 of the study guide

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A forward contract would fix the exchange rate at a certain level, allowing for cost certainty. This mitigates the risk of the currency getting any weaker.

Explanation

The risk has been transferred to the insurance company. This question is based on the 4Ts from p.32- this is a popular exam topic, for both the multiple choice questions and the drag and drop

Explanation

Answers 2 and 4 are correct. A Business Continuity Plan is held at the top level, not a disaster recovery plan. This can be held at the department level- or whoever would have the ability to enact this if a disaster were to happen. A company is likely to have several Disaster Recovery Plans for different departments and different scenarios so several people within the organisation may be accountable for these. Option 3 is incorrect as the focus is on recovering systems (e.g. getting people back online) not on profit. P.155