Which of the following actions is most likely to increase total supply chain risk?
Which of the following actions is most likely to increase total supply chain risk?
Reducing the supplier base for commodity-type components increases total supply chain risk because it creates dependency on fewer suppliers. If any of these suppliers face issues like production delays, quality problems, or financial instability, the entire supply chain can be significantly disrupted. By having a diverse supplier base, a company can mitigate risks by having alternative sources of supply in the event of any supplier-related disturbances.
why not B?
I answer this question by myself: geopolitical reason cannot be migrated.
Agree with you
Expanding operations to multiple locations increases total supply chain risk because it introduces additional complexities and uncertainties in managing the extended supply chain. Each location may have its own set of risks, such as transportation disruptions, regulatory compliance issues, labor disputes, and geopolitical risks, which can impact the overall performance and resilience of the supply chain.
Generally, expanding ops to multiple locations is to mitigate the risk associated with external factors that might affect production.