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NEW QUESTION 29
Which of the following is an example of force majeure?

A. The supplier asks for an uplift in pricesB. The supplier delivers materials late due to a breakdownC. The supplier's factory is hit by a hurricaneD. The supplier is under criminal investigation for fraud

Answer: C

Explanation:
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

 

NEW QUESTION 30
Which of the following is an example of hedging?

A. insuranceB. risk assessmentsC. auditsD. dual-sourcing

Answer: A

Explanation:
Explanation
Insurance is a form of hedging. Hedging is using a financial instrument to offset the potential risk of an adverse loss (p.93) none of the other options mentioned are financial instruments.

 

NEW QUESTION 31
Rabbit Manufacturing operates several factories which create stuffed animals. As these stuffed animals are mainly bought for children, it is extremely important that the quality of the product is assured, and there are no dangerous or small parts which could become choking hazards. Which of the following are appraisal costs that the company should undertake in order to mitigate the risk of poor quality products entering the market?

A. introduce a 0 defect approachB. staff training to ensure higher quality products are madeC. quality control inspectionsD. using a pro-active quality management system

Answer: C

Explanation:
Explanation
Of these four answers only one is an appraisal cost and that is answer 1. The other three options are prevention costs. There is a table of appraisal costs and prevention costs on p. 26 Appraisal costs are reactive- they're done after the product is manufactured. Preventative costs are actions taken in quality assurance.

 

NEW QUESTION 32
Which of the following statements about FIDIC Contracts are true? Select TWO:

A. Early warning notices are given when risks ariseB. They are more collaborative than NEC contractsC. Change control is called a 'Compensation Event'D. Each party manages their own risks separatelyE. They are used in the construction industry

Answer: D,E

Explanation:
Explanation
1 and 3 are correct answers. Options 2,4, and 5 are true for NEC contracts - NEC is more collaborative than FIDIC, early warning notices are given and change controls are called 'Compensation Events'. See p.74 for more information on FIDIC and NEC Contracts. This does come up in the exam

 

NEW QUESTION 33
Which of the following statements is true about ISO9001? Select TWO.

A. it aims to ensure sustainability within the supply chainB. it helps businesses to identify areas of potential risk and mitigate these accordinglyC. It complements ISO 20400D. it is based on the principle of continuous improvementE. it encourages businesses to see quality from the viewpoint of the customer

Answer: D,E

Explanation:
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.

 

NEW QUESTION 34
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