Certified Supply Chain Professional (CSCP) Practice Exam

What does risk assessment in supply planning involve?

1. Identifying potential cost-saving measures

2. Spelling out risks of a supply plan for decision makers

3. Creating strategies to maximize resources

4. Forecasting future market demands

The correct answer is: Spelling out risks of a supply plan for decision makers

Risk assessment in supply planning is crucial for understanding the potential pitfalls that might affect the supply chain's effectiveness and reliability. It involves evaluating the various risks associated with a supply plan and clearly communicating these risks to decision-makers. This process helps stakeholders make informed choices about how to manage and mitigate uncertainties that may impact supply operations, such as supplier reliability, market fluctuations, or logistical challenges. By outlining the risks associated with a supply plan, organizations can develop contingency plans and proactive strategies to address these vulnerabilities. This allows for better resource allocation and risk management practices, ensuring that the supply chain can withstand potential disruptions. While identifying potential cost-saving measures, maximizing resources, and forecasting market demands are important elements of supply chain management, they are not the primary focus of risk assessment in supply planning. These activities might be informed by the insights gained from a thorough risk assessment, but they do not encapsulate its core purpose, which is fundamentally about identifying and communicating risks to facilitate better decision-making.