APICS Certified Supply Chain Professional (CSCP) — Question 172

A shipping company investing to reduce damages due to weather conditions is an example of:

Answer options

• A. risk tolerance.
• B. risk exposure.
• C. risk mitigation.
• D. risk resilience.

Correct answer: C

Explanation

The correct answer is C, risk mitigation, as the company is taking proactive steps to minimize the potential for damage. Option A, risk tolerance, refers to the level of risk that an organization is willing to accept, while B, risk exposure, is about the potential for loss without taking action. D, risk resilience, relates to the ability to recover from risks rather than reducing them.