Which of the following situations is an example of a process risk?
Which of the following situations is an example of a process risk?
Process risk is defined as the potential for loss or damage arising from errors or omissions in the execution of a business process. Human error directly aligns with this definition, as it represents mistakes made by individuals within a process. Supplier quality and counterfeit material are typically classified as external risks or supply risks, while forecast error is a demand risk. Therefore, human error is the most accurate example of a process risk.
Forecast error is a demand risk. The answer is D (Process risks are typically internal risks)
Process risk is defined as the potential for loss or damage arising from errors or omissions in the execution of a business process.
B:Process risk is defined as the potential for loss or damage arising from errors or omissions in the execution of a business process. Forecast error represents a risk associated with the forecasting process within supply chain management. Forecasting involves predicting future demand for products or services based on historical data, market trends, and other relevant factors. Forecast errors occur when actual demand deviates from the forecasted demand, leading to discrepancies between planned production or inventory levels and actual requirements. Both forecast error and human error are valid examples of process risks within the supply chain. However, if we consider the scenario in which the focus is primarily on the accuracy and reliability of processes within the supply chain, the most appropriate choice would be: Forecast error
Forecast Error
The correct answer is: D. Human error Reasoning: Process risk refers to risks that arise from flaws or failures in internal processes. Human error is a classic example of process risk because it involves mistakes made during the execution of tasks, affecting the efficiency or outcome of the process. A. Supplier quality and C. Counterfeit material are examples of supply risks, as they deal with issues related to external suppliers. B. Forecast error is an example of demand risk, as it involves inaccuracies in predicting customer demand. Therefore, human error is the best example of process risk in this context.