Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following best describes supply risk?

1. Capacity constraints

2. Counterfeiting

3. Supplier performance fluctuations

4. Market demand shifts

The correct answer is: Counterfeiting

Supply risk refers to the potential disruptions in the supply chain that can adversely affect the availability and quality of materials or products necessary for operations. Among the provided options, counterfeiting best encapsulates a significant aspect of supply risk. Counterfeiting represents an issue where fake or substandard products are introduced into the supply chain, potentially leading to serious quality concerns, increased costs, legal ramifications, and damaged reputation for companies. This type of risk can undermine trust in suppliers and create ongoing problems throughout the procurement process, as businesses may unknowingly acquire counterfeit goods instead of genuine ones. In contrast, capacity constraints, supplier performance fluctuations, and market demand shifts are important considerations in supply chain management but they do not prioritize the integrity of the product itself in the same way that counterfeiting does. These factors may affect operations or planning but do not inherently involve the deception associated with counterfeit goods. Thus, counterfeiting stands out as a clear representation of a supply risk that encompasses substantial potential harm to both the supply chain and the overarching business operations.