QUESTION: 9

Which of the following are technological risks to an organisation? Select TWO

cyber-security issue
supply chain security issue
supplier management issue
network failure
quality failure

Answer(s): A,D

Explanation:

Cyber security and network failure are two types of security risks. See. P. 154. There aren't a lot of questions on chapter 3.4 as it's a very short chapter and a lot of the material is repeated in earlier chapters. A brief look over this chapter is all you'll need before the exam.

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QUESTION: 10

Maple Tree Limited is a Canadian company who has recently signed a new contract with a supplier who is based in Chin

Maple Tree Limited will be buying a raw material with a reputation for severe price fluctuations.
Which of the following would help mitigate the risk that this poses? Select TWO options
quote in the supplier's currency
quote in the buyer's currency
use a forward exchange contract
fix the exchange rate at the current rate

Answer(s): C,D

Explanation:

The correct answers are 3 + 4. To mitigate the risk, you want to ensure price stability for the duration of the contract- you don't want the prices to keep going up and down. Therefore options 1 and 2 wouldn't help- the prices would still go up and down regardless of which currency was used for quotes. Using a forward contract, or fixing the exchange rate, however, would give price certainty,

and therefore mitigate the risk. See p.23 for more information on currency risks and how to overcome these

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QUESTION: 11

Neruda Incorporated is evaluating potential suppliers' financial standings as part of a tender.
Which of the following companies is the most financially stable?

Company A has a high gearing ratio, high liquidity and few fixed assets
Company B has low liquidity, a high gearing ratio and increasing sales trends
Company C has low liquidity, low gearing and increasing sales trend
Company D has high liquidity, low gearing and lots of fixed assets

Answer(s): D

Explanation:

Company D is the strongest. You want a company with high liquidity (this means they can easily pay any debts) and low gearing (meaning that their company isn't financed by debt). This question comes from p.24 of the CIPS study guide. It doesn't go into a lot of detail on financial ratios and gearing, as this was covered in Level 4. If you're rusty on financial ratios and gearing I recommend revising these before the exam.

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QUESTION: 12

Which of the following statements is true about ISO9001? Select TWO.

it is based on the principle of continuous improvement
it encourages businesses to see quality from the viewpoint of the customer
it aims to ensure sustainability within the supply chain
It complements ISO 20400
it helps businesses to identify areas of potential risk and mitigate these accordingly

Answer(s): A,B

Explanation:

ISO 9001 is Quality Management- answers 1 and 2 are correct. ISOs are a popular topic on this exam so be sure to revise them - and not only what the names of them are, but also the principles behind each ISO. ISO 9001 is discussed on p. 25 of the CIPS study guide.

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Free L5M2 Exam Braindumps (page: 3)

QUESTION: 9

Explanation:

QUESTION: 10

Explanation:

QUESTION: 11

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QUESTION: 12

Explanation: