Certified Supply Chain Professional (CSCP) Practice Exam

What is the primary focus of hazard risks in supply chains?

1. Market competition

2. Regulatory compliance

3. Natural and man-made disasters

4. Supplier relationship management

The correct answer is: Natural and man-made disasters

The primary focus of hazard risks in supply chains revolves around natural and man-made disasters. Hazard risks refer to events that can disrupt the normal operations of a supply chain due to unforeseen occurrences. These can include natural disasters such as earthquakes, floods, or hurricanes, as well as man-made disasters like industrial accidents, terrorist attacks, or cyber-attacks. Understanding hazard risks is crucial for supply chain management because these events can lead to significant operational disruptions, financial losses, and can even threaten the very existence of businesses. By identifying and mitigating these risks, organizations can enhance their resilience, ensuring continuity of operations despite adverse conditions. Options such as market competition and regulatory compliance do not specifically address the unpredictable nature of hazard risks, as they primarily relate to strategic and compliance-related aspects of business operations. Similarly, while supplier relationship management is important for maintaining partnerships and ensuring reliability, it is not directly focused on the risks associated with unexpected disasters or hazards that can impact supply chains.