Certified Supply Chain Professional (CSCP) Practice Exam

What is an "unknown risk"?

1. A risk that has been mitigated

2. A risk that exists but is not known

3. A risk that everyone is aware of

4. A risk that has been documented

The correct answer is: A risk that exists but is not known

An "unknown risk" refers to a risk that exists but is not known or identified by the organization. This type of risk is particularly challenging because organizations cannot prepare for or mitigate risks they are unaware of. Unknown risks can arise from various sources, including unforeseen events or changes in the market realities, and they often pose a significant threat to supply chain operations since the organization has no strategy in place to address them. In contrast, risks that have been documented, mitigated, or are widely known are considered known risks. These risks can be assessed, managed, and monitored effectively. The very essence of an unknown risk is that it lies outside the current knowledge base of the organization, making it critical for supply chain professionals to implement strategies that enhance visibility and adaptability in their operations to better prepare for unforeseen challenges.