The CBCI (Certificate of the Business Continuity Institute) and DBCI (Diploma of the Business Continuity Institute) are professional qualifications awarded by the Business Continuity Institute (BCI). The BCI is the leading global professional body for business continuity and resilience. These certifications are designed to validate an individual's knowledge and expertise in implementing and managing business continuity management (BCM) systems, which are critical for organisational resilience against disruptions. The CIPS L5M2 module on managing supply chain risk directly covers the principles of business continuity, making these qualifications highly relevant to the subject area.

A. supply chain management: While business continuity is a vital component of supply chain risk management, these are specific qualifications for the business continuity discipline, not the entire SCM field.

B. ethical business practices: These qualifications focus on operational resilience and recovery strategies, not the broader principles of corporate ethics.

C. environmental improvements: This pertains to sustainability and environmental management (e.g., ISO 14001), which is a separate discipline from business continuity (e.g., ISO 22301).

1. The Business Continuity Institute (BCI). (2023). BCI Certifications. The BCI officially defines the CBCI as the "internationally recognised credential in business continuity" and the starting point for a career in the field. This documentation directly links the qualifications to the business continuity profession. Available at: https://www.thebci.org/training-qualifications/bci-certifications.html

2. Herbane

B. (2010). The evolution of business continuity management: A historical review of practices and drivers. Business History

52(6)

978-1002. This academic paper discusses the professionalisation of business continuity

referencing the role of professional bodies like the BCI in establishing standards and qualifications (p. 995). DOI: https://doi.org/10.1080/00076791.2010.511185

3. International Organization for Standardization (ISO). (2019). ISO 22301:2019 Security and resilience — Business continuity management systems — Requirements. The body of knowledge underpinning the CBCI and DBCI qualifications is based on this international standard for business continuity management. The standard's scope is explicitly defined as business continuity

not general SCM

ethics

or environmental management.

SWOT analysis is a strategic planning framework used to evaluate an organisation's competitive position. It stands for Strengths, Weaknesses, Opportunities, and Threats. The framework is explicitly divided into two dimensions: internal and external. Strengths and Weaknesses are internal factors that originate within the organisation itself. Opportunities and Threats are external factors arising from the macro-environment. By identifying internal Weaknesses and external Threats, this model provides a comprehensive structure for exploring both internal and external risks to a business.

A. Porter's 5 Forces: This model is used for industry analysis, focusing exclusively on external competitive pressures and does not assess a company's internal factors.

B. STEEPLE: This is a macro-environmental analysis tool that examines only external factors (Social, Technological, Economic, etc.) and does not consider internal risks.

D. Poisson Distribution: This is a statistical tool used to model the frequency of events over a specific period, not a strategic framework for identifying the sources of business risks.

1. Chartered Institute of Procurement & Supply. (2018). Managing Supply Chain Risk (L5M2). CIPS Profex Study Guide. Chapter 2: Risk and the Supply Chain

Section 3: Risk Identification. The guide details SWOT as a tool for assessing internal strengths/weaknesses and external opportunities/threats.

2. Johnson

G.

Whittington

R.

Scholes

K.

Angwin

D.

& Regnér

P. (2017). Exploring Strategy (11th ed.). Pearson Education. Chapter 3

Section 3.5

"SWOT

" pp. 82-84. The text explicitly states

"SWOT summarises the key issues from the business environment and the strategic capability of an organisation that are most likely to impact strategy development." It clearly delineates Strengths/Weaknesses as internal and Opportunities/Threats as external.

3. Hill

C. W. L.

& Jones

G. R. (2012). Strategic Management: An Integrated Approach (10th ed.). Cengage Learning. Chapter 3

"Internal Analysis: Distinctive Competencies

Competitive Advantage

and Profitability

" pp. 99-101. This chapter describes SWOT as a methodology to align a company's internal resources and capabilities (Strengths and Weaknesses) with the external opportunities and threats in its environment.

The Stakeholder Salience Model, developed by Mitchell, Agle, and Wood (1997), is a framework for identifying and classifying stakeholders. It assesses stakeholders based on three key attributes: power, legitimacy, and urgency. Power refers to the stakeholder's ability to influence the organisation. Legitimacy is the perceived validity or appropriateness of a stakeholder's claim. The third attribute, urgency, relates to the degree to which a stakeholder's claim demands immediate attention. The combination of these attributes determines a stakeholder's "salience" or importance to the organisation. From the options provided, power and legitimacy are two of these three core attributes.

C. interest: This is a key variable in the Power/Interest Matrix (Mendelow's Matrix), a different stakeholder mapping tool, not the Salience Model which uses 'urgency' instead.

D. level: This term is too general and is not a specific, defined attribute within the Stakeholder Salience Model framework.

E. attitude: While a stakeholder's attitude (e.g., supportive, opposed) is important for management strategy, it is not one of the three defining attributes of the Salience Model.

1. Mitchell

R. K.

Agle

B. R.

& Wood

D. J. (1997). Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts. The Academy of Management Review

22(4)

853–886. In the abstract and throughout the paper (e.g.

p. 865-869)

the authors define and elaborate on the three key attributes: "We suggest that stakeholders can be identified by their possession or attributed possession of one

two

or all three of the following attributes: (1) the stakeholder's power to influence the firm

(2) the legitimacy of the stakeholder's relationship with the firm

and (3) the urgency of the stakeholder's claim on the firm." DOI: https://doi.org/10.2307/259247

2. Neville

B. A.

Bell

S. J.

& Whitwell

G. J. (2011). Stakeholder Salience Revisited: Refining

Redefining

and Refueling an Underdeveloped Conceptual Tool. Journal of Business Ethics

102(3)

357–378. This paper reviews and builds upon the original model

confirming the foundational attributes as power

legitimacy

and urgency. DOI: https://doi.org/10.1007/s10551-011-0814-9

The 'Tolerate' approach, also known as risk acceptance, is a valid and common strategy in risk management. It involves a conscious decision to accept the potential consequences of a particular risk without taking any specific action to mitigate it. This approach is typically chosen when the potential impact of the risk is low, or the cost of implementing a mitigation strategy outweighs the potential loss. The organisation acknowledges the risk and agrees to bear any resulting losses. This is one of the '4 Ts' of risk response, which also include Treat, Transfer, and Terminate.

B. translate: This is not a recognized term in risk management methodology. It refers to converting information from one form or language to another.

C. transport: This term is incorrect. While 'transfer' is a valid risk response (shifting risk to a third party), 'transport' relates to logistics and movement.

D. take out: This is informal language and not a standard term. The correct term for eliminating the source of the risk is 'terminate' or 'avoid'.

1. CIPS (Chartered Institute of Procurement & Supply). (2018). Managing Supply Chain Risk (L5M2). Profex Publishing. In the section on risk response strategies

the '4 Ts' model is detailed

explicitly listing 'Tolerate' as a primary option for managing identified risks.

2. Waters

D. (2011). Supply Chain Risk Management: Vulnerability and Resilience in Logistics. Kogan Page. Chapter 6

"Responding to Risks

" outlines the main response strategies

including risk acceptance or tolerance

where an organization decides to live with the risk.

3. Slack

N.

Brandon-Jones

A.

& Johnston

R. (2016). Operations Management (8th ed.). Pearson. In the chapter on risk management (Chapter 18)

the concept of 'accepting the risk' (tolerating) is presented as a viable response when other actions are not justified.

To effectively detect sensitive and often concealed issues such as child labour, social audits must employ methods that prevent deception and encourage truthful disclosure. Unannounced, on-the-spot visits (B) are critical as they prevent factory management from hiding non-compliant practices or coaching workers. Advance warnings would render the audit ineffective for such issues.

Furthermore, conducting private meetings with a selection of workers (D) is a best-practice technique. This ensures confidentiality, allowing workers to speak openly about their conditions, ages, and treatment without fear of reprisal from management or coercion from peers, which is a significant risk in group settings.

A. organised well in advance to allow the factory managers to prepare for the audit: This approach is counter-productive for uncovering hidden violations like child labour, as it gives the supplier time to conceal evidence and coach employees.

C. conduct group interviews with workers to ensure that all voices are heard: Group interviews are unsuitable for sensitive topics. Workers are unlikely to speak truthfully about violations due to peer pressure or fear of managers overhearing.

1. CIPS L5M2 Managing Supply Chain Risk Official Course Book: The principles of effective supplier auditing are discussed

emphasizing the need for thorough and sometimes unannounced checks to verify compliance

especially concerning ethical standards. The text highlights that for serious risks like modern slavery or child labour

a simple pre-arranged visit is insufficient to uncover the truth. (Note: Specific page numbers vary by edition

but this content is typically found in chapters on managing supplier performance and risk).

2. International Labour Organization (ILO): The ILO's guidance on combating child labour emphasizes the need for credible monitoring. It notes that unannounced inspections and confidential worker interviews are core components of effective verification processes

as they provide a more accurate picture of workplace realities than pre-arranged

management-controlled audits. (See: ILO

Combating child labour: a handbook for employers and business

Section 4: 'Monitoring and verification').

3. Lund-Thomsen

P.

& Lindgreen

A. (2014). Corporate social responsibility in global value chains: A governance perspective. Journal of Business Ethics

125

1-5. This and similar academic articles on CSR and ethical supply chains consistently identify unannounced audits and confidential worker interviews as essential methodologies for credible social auditing

contrasting them with less effective

pre-announced "show-and-tell" audits. DOI: https://doi.org/10.1007/s10551-013-1949-5 (The principles are discussed in the broader context of effective governance mechanisms).

Airlines typically enter into jet-fuel commodity swap contracts. In a swap the airline pays (or receives) a fixed price for fuel and receives (or pays) the floating market index, thereby locking-in—or “fixing”—its fuel cost for a defined period. Swaps are therefore the specific derivative instrument used; “hedging” is the overall risk-management strategy, not the contract itself.

A. commodity – Describes the underlying good (fuel) rather than the financial contract.

C. exchange – A trading venue or mechanism, not an instrument that fixes price.

D. hedge – Refers to the strategy or position; it is not the specific contract that delivers the fixed price.

1. Hull

J. C. Options

Futures and Other Derivatives

10th ed.

Pearson

2018

Chapter 7 “Swaps

” pp. 146–148 – explains commodity swaps used to lock in jet-fuel prices.

2. Carter

D.; Rogers

D.; Simkins

B. “Does Fuel Hedging Make Economic Sense? The Case of the U.S. Airline Industry.” Financial Management

2006

35(1)

pp. 53–55. DOI:10.1111/j.1755-053X.2006.tb00147.x – documents airlines’ use of fuel swap contracts to fix future costs.

3. MIT OpenCourseWare

15.437 Options and Futures Markets

Lecture 12 slides “Commodity Swaps

” slide 9 – gives example of airlines employing jet-fuel swaps to lock in prices.

The diagram illustrates a standard risk categorisation matrix. Box 1, defined by external PESTLE factors, represents Strategic risk. Box 2, concerning internal resources, people, and processes, represents Operational risk. The remaining two primary risk categories are Financial and Hazard.

The matrix positions Box 4 on the same horizontal axis as Box 2, which is explicitly labelled 'Internal'. Therefore, Box 4 must represent a risk category that is primarily viewed as internal in this model. While financial risks have external drivers (e.g., market volatility), this framework categorises them as internal, focusing on risks managed within the organisation, such as ineffective financial controls, poor budgeting, or credit management failures.

A. hazard: While Hazard/Compliance is a valid risk category, in this specific matrix, it is more likely placed in the external quadrant (Box 3) to represent external events like natural disasters.

C. strategic: This category is already represented by Box 1 (External/PESTLE). Placing it in Box 4 would be redundant and contradict the matrix's structure.

The LILAC model, developed by the Institute of Risk Management (IRM), outlines five essential components for embedding a positive risk-aware culture within an organisation. The acronym stands for Leadership, Involvement, Learning, Accountability, and Communication. The model posits that strong leadership commitment and a culture of continuous learning are foundational. Leadership must visibly champion risk management, while the organisation must learn from experiences to improve its risk processes. Option A correctly identifies two of these five core pillars of the model.

B: 'Investment' is not a formal component of the LILAC acronym, although it is necessary to support the framework's elements.

C: 'Appraisal' is not a specific component of the LILAC model, though it is a mechanism for enforcing accountability.

D: 'Information' is not a component of the LILAC model; the correct corresponding element in the acronym is 'Communication'.

1. CIPS. (2019). Managing Supply Chain Risk (L5M2). CIPS Official Course Book. Profex Publishing. Chapter 3: The Need for a Risk Management Culture

Section on 'Models for developing a risk culture'.

2. The Institute of Risk Management (IRM). (2012). Risk Culture: Resources for Practitioners. Page 7

Section: 'The LILAC approach'. Available from IRM publications.

3. Hopkin

P. (2018). Fundamentals of Risk Management: Understanding

Evaluating and Implementing Effective Risk Management. 5th Edition. Kogan Page. Chapter 15: Risk Culture

pp. 229-231. (This text details the IRM's LILAC framework as a key model for developing risk culture).

The principle of contribution applies when an insured party has multiple insurance policies covering the same risk. It dictates that the insured can only claim for the actual value of their loss and cannot profit by receiving full payment from each insurer. The insurers will share the cost of the claim, usually in proportion to the sum insured under each policy. This upholds the fundamental principle of indemnity, which is to restore the insured to the financial position they were in immediately before the loss, not to provide a windfall.

A. Utmost good faith: This principle requires the insured and insurer to disclose all material facts honestly when entering the contract, not how claims are settled.

B. Insurable interest: This principle requires the policyholder to have a financial stake in the insured item, making the policy valid, but doesn't govern claim payouts.

D. Subrogation: This principle allows an insurer, after paying a claim, to pursue the third party who caused the loss to recover the payment.

1. CIPS L5M2 Managing Contractual Risk

Official CIPS Course Book (2019). Chapter 5: ‘Legal Issues’

Section on ‘Principles of Insurance’

pp. 115-117. The text defines contribution as the sharing of a loss between insurers when more than one policy covers the same risk

preventing the insured from recovering more than their total loss.

2. Clarke

M. A. (2017). The Law of Insurance Contracts (8th ed.). Informa Law from Routledge. Chapter 28

‘Contribution’

Section 28-1A

clearly states

"Contribution is the right of an insurer who has paid a loss under a policy to recover a proportionate amount from other insurers who are liable in respect of the same loss."

3. Lowry

J.

& Rawlings

P. (2014). Insurance Law: Doctrines and Principles (3rd ed.). Hart Publishing. Chapter 11

‘Contribution and Subrogation’

pp. 289-292. This chapter explains that contribution is an equitable doctrine that prevents multiple recovery by the insured and distributes the burden of indemnity among the relevant insurers. DOI: https://doi.org/10.5040/9781472561009.ch-011

The image displays the Kraljic Portfolio Purchasing Model. Box 8 represents the 'Strategic' quadrant, which is characterized by high profit impact and high supply risk. Items in this category are critical for the organisation's success and have a complex supply market. The recommended purchasing strategy for this quadrant is to ensure long-term supply availability and manage the relationship closely. A forward contract is a financial instrument that locks in the price and quantity of a commodity for future delivery. This directly mitigates both price volatility (profit impact) and supply uncertainty (supply risk), making it a highly appropriate strategy for managing strategic items.

A. new technology: This is a broad enabler or a potential long-term project, not a direct purchasing strategy for managing an existing high-risk, high-impact supply category.

C. outsource: This is a make-or-buy decision. While it could be part of a larger strategy, it is not in itself a purchasing tactic for managing a specific spend category.

D. insurance: This is a risk transference tool that provides financial compensation after a loss occurs but does not proactively secure the continuity of supply, which is the primary objective.

1. Kraljic

P. (1983). Purchasing Must Become Supply Management. Harvard Business Review

61(5)

pp. 109-117. (The seminal article describes strategies for the strategic quadrant focusing on long-term availability

including long-term contracts and vertical integration).

2. CIPS (Chartered Institute of Procurement & Supply). (2018). Managing Supply Chain Risk (L5M2). CIPS Official Course Book. Profex Publishing

pp. 55-59. (The official CIPS text outlines strategies for the strategic quadrant

emphasizing the need for collaboration

long-term relationships

and securing supply

for which forward contracts are a key tool).

3. Van Weele

A. J. (2018). Purchasing and Supply Chain Management. 7th Edition. Cengage Learning. Chapter 5

Section 5.4

"The Purchasing Portfolio Matrix." (This academic text details the Kraljic matrix and explicitly links strategies like long-term contracts and forward buying to the strategic quadrant to ensure supply security).