Which of the following actions is most appropriate?

A company’s supply chain depends heavily on sourcing from international suppliers. Conditions increasingly threaten supply continuity.

Which of the following actions is most appropriate?
A . Source from domestic suppliers.
B . Conduct a risk assessment.
C . Carry additional safety stock.
D . Spread logistics across multiple carriers.

View Answer

Answer: B

Explanation:

When supply continuity is threatened due to heavy dependence on international suppliers, the most appropriate action is to conduct a risk assessment. This involves systematically identifying potential risks, evaluating their impact, and developing strategies to mitigate them. The risk assessment provides a comprehensive understanding of vulnerabilities and helps in making informed decisions on sourcing strategies, inventory management, and logistics.

Sourcing from domestic suppliers may reduce some risks but might not be feasible or cost-effective without a thorough assessment.

Carrying additional safety stock is a mitigation strategy but does not address the root cause of supply risk.

Spreading logistics across multiple carriers can help manage transportation risks but does not cover the broader supply chain risks.

Reference: Christopher, M. (2011). "Logistics & Supply Chain Management."

Waters, D. (2011). "Supply Chain Risk Management: Vulnerability and Resilience in Logistics."