Certified Supply Chain Professional (CSCP) Practice Exam

Which type of assessment is performed after identifying and classifying risks?

1. Expost facto assessment

2. Qualitative assessment

3. Quantitative assessment

4. Analytical assessment

The correct answer is: Quantitative assessment

After identifying and classifying risks, conducting a quantitative assessment is a critical step in the risk management process. This type of assessment involves numerically analyzing the potential risks to determine their potential impact and likelihood, allowing organizations to prioritize risks based on their severity and probability of occurrence. Quantitative assessments utilize statistical methods and models to provide measurable outcomes. This may involve techniques such as calculating the potential financial loss associated with a risk, analyzing historical data, or using simulations to forecast the effects of various risk scenarios. By quantifying risks, organizations can make informed decisions regarding which risks to mitigate, transfer, or accept based on their overall risk tolerance and strategic objectives. In contrast, qualitative assessments focus more on subjective, non-numerical evaluations of risks, which, while valuable, do not provide the same level of measurable insights as quantitative assessments. It's also important to note that ex post facto assessments are retrospective analyses and analytical assessments typically do not specifically refer to risk analysis in a numerical sense, hence distinguishing the unique role that quantitative assessments hold in effective risk management.