Company DDD has recently seen a drop in share price and has high levels of Work-in-Progress (WIP) due to late supplier deliveries. Which of the following is the type of risk the business facing?
Answer(s): A
This is a financial risk. A drop in share prices is a huge financial risk for a company. Having lots of items as WIP is also a financial risk as this signifies that a lot of money is tied up in stock being held on site. Types of risk are very popular exam questions for this module- for a full list of these and s see p.11
Which of the following models would be used to explore internal and external risks to a business?
Answer(s): C
SWOT is used for this. S + W is strengths and weaknesses, which are internal risks. O+T are opportunities and threats which are external risks. See p. 12 for more information
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(s): 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
Risk should be a 'golden thread' that links all of the organisation's strategies, communications, policies and training. The LILAC model describes how a risk-aware culture can be created. Which of the following form part of the LILAC model?
The LILAC Model is; Leadership, Involvement, Learning, Accountability and Communication. P. 149
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