Why do supply chains complicate the ERM process?
A) They lead to higher human resource risk.
B) They lead to higher speculative risks.
C) A disruption somewhere in the supply chain affects the operations of a firm.
D) They do not complicate the ERM process at all.

Question

Quizplus · Accepted Answer

Supply chains involve various interconnected entities and dependencies. Any disruption to one of these entities can affect the operations of a firm, leading to operational, financial, and reputational risk. Managing these risks effectively requires a coordinated approach across the supply chain. Hence, supply chains complicate the ERM process. Choices A and B are incorrect because human resource risk and speculative risks do not necessarily stem from managing supply chains. Choice D is incorrect as supply chains do add complexity to the ERM process.

Why Do Supply Chains Complicate the ERM Process