APICS Certified Supply Chain Professional (CSCP) — Question 42

Which of the following actions is most likely to increase total supply chain risk?

Answer options

• A. Standardizing components used in a product family
• B. Expanding operations to multiple locations
• C. Consolidating manufacturing locations
• D. Reducing the supplier base for commodity-type components

Correct answer: D

Explanation

Reducing the supplier base for commodity-type components increases total supply chain risk because it creates a dependence on fewer suppliers, which can lead to significant disruptions if one supplier fails. The other options, such as standardizing components or expanding operations, generally enhance efficiency and reduce risk by diversifying sources or streamlining processes.