One way to mitigate liability risk in the supply chain is to:

One way to mitigate liability risk in the supply chain is to:
A . negotiate lower component cost.
B . require traceability for components.
C . push inventory to supplier locations.
D . use less-than-truckload (LTL) shipments more frequently.

View Answer

Answer: B

Explanation:

One way to mitigate liability risk in the supply chain is to require traceability for components. Liability risk is the risk that a party may be held responsible for certain types of losses caused by its actions or products to third parties1. Traceability is the ability to track the origin, history, location, and movement of a product or a component through the supply chain2. Requiring traceability for components can help to mitigate liability risk in the supply chain by enabling the identification and verification of the quality, safety, and compliance of the components, as well as the detection and prevention of counterfeit, defective, or hazardous components. Traceability can also facilitate the recall, repair, or replacement of faulty components, and the allocation of responsibility and accountability among the supply chain partners in case of a liability claim34.

References: 1

What is a Liability Risk? – Definition from Insuranceopedia 5 2 Traceability – Wikipedia 6 3 Supply Chain Liability in the Corporate Sustainability Due Diligence … 7 4 CPIM Exam References – Association for Supply Chain Management 8