A manufacturing firm identified that it would have difficulty sourcing raw materials locally,so it decided to relocate its production facilities.According to COSO,this decision represents which of the following response to the risk?
A)Risk reduction.
B)Prospect theory.
C)Risk sharing.
D)Risk acceptance.

Question

Quizplus · Accepted Answer

Relocating production facilities is a form of risk reduction as it aims to minimize the impact of the risk (difficulty sourcing raw materials locally) by relocating to a more favorable location.

A Manufacturing Firm Identified That It Would Have Difficulty Sourcing