APICS Certified in Logistics, Transportation and Distribution (CLTD) — Question 13

When a company decides not to purchase insurance to cover a risk, it is pursuing what type of risk strategy?

Answer options

• A. Retention
• B. Transfer
• C. Mixed
• D. Mitigation

Correct answer: C

Explanation

The correct answer is C. Mixed, as it indicates a combination of strategies, including retaining some risk while possibly transferring others. A. Retention means keeping the risk without any action, B. Transfer involves shifting the risk to another party, and D. Mitigation focuses on reducing the impact or likelihood of the risk.