A company returned several shipments of contaminated raw material. Which risk classification best describes this event?
A company returned several shipments of contaminated raw material. Which risk classification best describes this event?
This event best fits the description of a supply risk. Supply risk involves the possibility of disruptions or quality issues with a company's suppliers. In this case, the company received contaminated raw materials, which indicates a problem in their supply chain. Although product liability refers to the risk of a product causing harm to consumers, this situation was managed before the contaminated raw materials were used in production, therefore, it does not fall under product liability.
IMO option A is correct because supply risk refers to the possibility of disruptions or problems with a company's suppliers, which may include receiving poor quality or contaminated raw materials. B is incorrect because this type of risk refers to the possibility of a product causing harm or injury to consumers. Although raw material contamination could lead to this type of risk if undetected and contaminated products are allowed to reach the market, in this case the problem was identified and handled before this happened.
Supply