Problem 2-12 (Static) Match the following common risks with the appropriate mitigation strategy: Use Exhibit 2.4. A. Detailed tracking, alternate suppliers B. Careful selection and monitoring of suppliers C. Contingency planning, insurance D. Good legal advice, compliance E. Currency hedging, local sourcing Country risks Regulatory risk Logistics failure Natural disaster Major quality failure
Problem 2-12 (Static) Match the following common risks with the appropriate mitigation strategy: Use Exhibit 2.4. A. Detailed tracking, alternate suppliers B. Careful selection and monitoring of suppliers C. Contingency planning, insurance D. Good legal advice, compliance E. Currency hedging, local sourcing Country risks Regulatory risk Logistics failure Natural disaster Major quality failure
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Transcribed Image Text:Problem 2-12 (Static)
Match the following common risks with the appropriate mitigation strategy: Use Exhibit 2.4.
A. Detailed tracking, alternate suppliers
B. Careful selection and monitoring of suppliers
C. Contingency planning, insurance
D. Good legal advice, compliance
E. Currency hedging, local sourcing
Country risks
Regulatory risk
Logistics failure
Natural disaster
Major quality failure
Transcribed Image Text:Risk Mitigation Strategies
RISKS
Natural disasters (e.g., climate change, weather)
Country risks
Supplier failures
Network provider failures
Regulatory risks (e.g., licensing and regulation issues)
Commodity price risks
Logistics failures
Inventory risks
Major quality failures
Loss of customers
Theft and vandalism
Outsourcing
Sole sourcing
Lean practices
Distribution hubs
High
impact
Moderate
impact
Natural/
human-made
disasters
No
impact
Country
risks
Supplier
failures
RISK MITIGATION STRATEGY
Contingency planning (alternate sites, etc.), insurance
Currency hedging, locally producing/sourcing
Multiple suppliers
Support of redundant digital networks
Up-front and continuing research; good legal advice, compliance
Multisourcing, commodity hedging
exhibit 2.4
Safety stock, detailed tracking, and alternate suppliers
Pool inventory, safety stock
Careful selection and monitoring of suppliers
Service/product innovation
Insurance, security precautions, knowledge of likely risks, patent.
protection, etc.
Network
provider Regulatory
failures.
risks
Commodity
price risks
Logistics Inventory
failures
risks
Quality
risks
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