Answer to Question #176217 in Economics of Enterprise for Sibabalwe

Question

Describe the major categories of supply base risks

Answer 1

The major categories of supply base risk involve the following;

Environmental risks. This category consists of natural catastrophes like storms, floods, fires which reduce the supply of goods and services.

Political risks. This category involves factors such as country or regional stability, corruption, terrorism, and legal systems. They affect the level of supply of goods and services.

Market risks. This category considers factors such as competitors, product life cycle, and emerging technologies that affect supply.

Financial risks. This category deals with the potential cost of the company including the cost of inventory, carriage, materials handling, and taxes.

Sourcing risk. This category involves looking at the number of suppliers in the industry.it focuses on supplier competition, costs, and difficulties in supply chain management.