1. What is the primary goal of risk mitigation in supply chain management?
A) To eliminate all risks
B) To reduce the likelihood and impact of potential risks
C) To increase inventory levels
D) To maximize profit margins
Answer: B) To reduce the likelihood and impact of potential risks
2. Which of the following is a common risk mitigation strategy in supply chains?
A) Centralizing suppliers in a single location
B) Diversifying the supplier base
C) Reducing the workforce
D) Increasing product prices
Answer: B) Diversifying the supplier base
3. What is the purpose of having safety stock in inventory management?
A) To increase storage costs
B) To mitigate the risk of stockouts
C) To reduce product variety
D) To enhance marketing efforts
Answer: B) To mitigate the risk of stockouts
4. How can dual sourcing help in risk mitigation?
A) By relying on a single supplier for all needs
B) By ensuring supply continuity from multiple suppliers
C) By centralizing production facilities
D) By increasing product complexity
Answer: B) By ensuring supply continuity from multiple suppliers
5. Which strategy involves relocating production facilities to multiple geographical locations?
A) Just-in-time (JIT) production
B) Geographical diversification
C) Vertical integration
D) Centralized distribution
Answer: B) Geographical diversification
6. What is the role of contingency planning in supply chain risk management?
A) It reduces the need for regular audits
B) It prepares the organization for unexpected disruptions
C) It focuses on long-term growth strategies
D) It decreases the number of product lines
Answer: B) It prepares the organization for unexpected disruptions
7. How can implementing a robust supplier relationship management (SRM) program mitigate risks?
A) By limiting communication with suppliers
B) By fostering collaboration and transparency
C) By increasing dependency on a single supplier
D) By reducing quality control measures
Answer: B) By fostering collaboration and transparency
8. What is the benefit of having an agile supply chain in risk mitigation?
A) It reduces the flexibility to respond to changes
B) It increases the risk of supply chain disruptions
C) It allows for rapid response to market and environmental changes
D) It focuses solely on cost reduction
Answer: C) It allows for rapid response to market and environmental changes
9. Which risk mitigation strategy involves using technology to enhance supply chain visibility?
A) Manual tracking
B) Digital transformation and IoT integration
C) Reducing the number of suppliers
D) Limiting data sharing
Answer: B) Digital transformation and IoT integration