Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following is NOT a response to risk that an organization can take?

1. Accept

2. Avoid

3. Transfer

4. Ignore

The correct answer is: Ignore

The option that is identified as not being a formal response to risk is "ignore." In risk management, organizations generally aim to address risks in a systematic and proactive manner. The recognized strategies for responding to risk typically include accepting the risk, avoiding the risk, and transferring the risk to another party. Accepting risk involves acknowledging the existence of the risk and deciding to proceed despite it, often because the potential impact is deemed acceptable or manageable. Avoiding risk entails taking steps to eliminate the risk or withdrawing from situations that present it. Transferring risk involves shifting the impact of a risk to another entity, often through contracts or insurance arrangements, allowing the organization to manage its exposure to risk more effectively. In contrast, ignoring a risk does not align with effective risk management principles. Ignoring a risk can lead to a lack of preparedness, as potential issues are left unaddressed. Effective risk management requires that organizations assess their risks and take action rather than neglect them. Therefore, ignoring a risk is not considered a viable or responsible response within the framework of risk management.