Certified Supply Chain Professional (CSCP) Practice Exam

What can environmental risks in a supply chain be associated with?

1. Natural disasters

2. Market trends

3. Country regulations and customs

4. Supplier reliability

The correct answer is: Country regulations and customs

Environmental risks in a supply chain can indeed be associated with country regulations and customs. Governments often establish regulations aimed at protecting the environment, which can affect how companies conduct their operations. For instance, certain countries may have stricter emissions standards, waste disposal requirements, or restrictions on resource extraction. Failure to comply with these regulations can lead to legal penalties, disruptions in supply chain activities, or increased operational costs. Additionally, customs regulations related to environmental standards can impact the import and export of goods, requiring firms to adapt their logistics and supplier selection processes to adhere to local laws. While natural disasters can certainly pose risks, they are more tied to unforeseen events rather than regulatory requirements. Similarly, market trends and supplier reliability, while important factors, do not directly relate to environmental regulations. The connection between environmental risks and compliance with regulations underscores the significance of understanding and navigating the legal landscape of the regions in which a company operates.