AI Vendor and Supply Chain Management AAISM Practice Questions (Page 3)

Questions 11–15

1. 11foundation · easy

   What is the focus of vendor due diligence?

   • AConducting background checks on the vendor's financial stability, reputation, and security posture
   • BNegotiating the contract terms and conditions
   • CMonitoring the vendor's performance after the contract is signed
   • DImplementing the vendor's software into the organization
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2. 12application · medium

   An insurance company has been using an AI vendor for claims processing for two years. The vendor recently updated its platform, and the company noticed a decline in accuracy. The contract includes a service level agreement (SLA) but no specific performance metrics. What should the company do?

   • AImplement continuous monitoring of the vendor's performance and security controls, and schedule a review meeting to discuss the decline.
   • BWait for the vendor to fix the issue on its own.
   • CTerminate the contract immediately due to the decline in accuracy.
   • DAsk the vendor to provide a discount on the next invoice.
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4. 13foundation · easy

   Why is a vendor's financial stability an important consideration in due diligence?

   • AIt determines the vendor's marketing budget
   • BIt ensures the vendor will comply with all security regulations
   • CIt guarantees the vendor will provide the best technology
   • DIt indicates the vendor's ability to remain operational and support the AI system over time
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5. 14expert · hard

   A hospital is contracting with an AI vendor for patient diagnosis. The vendor will have access to sensitive health data. The hospital's legal team requires that the vendor comply with health data regulations and report any breach within 24 hours. The vendor is willing to comply but wants to limit liability. What is the BEST way to address this in the contract?

   • AInclude a clause that requires the vendor to comply with health data regulations and report breaches within 24 hours, while also defining liability limits that are acceptable to both parties.
   • BTerminate the negotiation and find a different vendor.
   • CAccept the vendor's liability limits without requiring breach reporting.
   • DRefuse to include any liability limits for the vendor.
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6. 15expert · hard

   A government agency's AI vendor has experienced a ransomware attack that has encrypted some of the agency's data. The vendor is unable to restore the data from backups. The agency's incident response team is working with the vendor to manage the incident. What is the MOST important consideration?

   • AWait for the vendor to resolve the issue on their own.
   • BPay the ransom to the attackers to restore the data quickly.
   • CCoordinate with the vendor to determine the scope of the breach and initiate recovery procedures, while also assessing the impact on the agency's operations.
   • DImmediately terminate the contract with the vendor to prevent further damage.
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