In reviewing his company's operations,a risk manager noticed that all of the company's finished goods were stored in a single warehouse.The risk manager recommended that the finished goods be divided among three warehouses to prevent all of the finished goods from being destroyed by the same peril.Dividing the finished goods among three warehouses illustrates
A)duplication.
B)separation.
C)insurance.
D)noninsurance transfer.

Question

Quizplus · Accepted Answer

Dividing the finished goods among three warehouses is an example of separation, which is a risk management technique that involves spreading assets, operations, or personnel over multiple locations to minimize the potential impact of a loss.

In Reviewing His Company's Operations,a Risk Manager Noticed That All