APICS Certified Supply Chain Professional (CSCP) — Question 430

A firm is assessing the risk of business disruption due to several types of natural disasters. When determining the risk of each type of disaster, the firm should consider the probability of each type of disaster and the:

Answer options

• A. consequences of the disruption.
• B. cost of mitigating the disaster.
• C. firm’s capability to mitigate the risk.
• D. forecaster’s confidence in the risk probability.

Correct answer: A

Explanation

The correct answer is A because understanding the consequences of a disruption is crucial for assessing overall risk. While options B and C address mitigation strategies, they do not directly evaluate the impact of the disaster itself. Option D relates to risk assessment but does not encompass the full scope of potential consequences from a disaster.