Is Chloe correct?

Chloe is a procurement manager at Ruby Company. She has been asked to join a cross-functional team to review the company’s risk appetite, potential risks within the supply chain and brainstorm mitigating actions. Chloe has suggested that the cross-functional team should first draw up a list of potential supply chain risks and potential strategies to overcome the risks.

Is Chloe correct?
A . yes- the first thing the team should look at are the risks and categorise these by topic
B. yes- the team should focus on creating a risk register and strategies for mitigating risks as quickly as possible
C. no- the team should review the company’s risk appetite before creating a risk register
D. no- Chloe should first speak with suppliers before drawing up the list of potential supply chain risks

View Answer

Answer: C

Explanation:

The correct answer is 3 ‘no- the team should review the company’s risk appetite before creating a risk register’. This questions tests to see if you understand what risk appetite is and when this should be reviewed. Risk appetite is the first stage in developing any plan as it will influence the next stages. For example if the company has a large risk appetite, this would affect how they would classify risks and what mitigating actions they would take. Risk appetite is explained in chapter 1.1 (p.4) but it also comes up in Learning Outcome 3