Risk Evaluation and Management involved in a supply chain

This research paper will explore the risk evaluation and management involved in a supply chain. The paper will define what is meant by risk and discuss how it can impact a business. It will also look at how businesses manage risk through different methods including insurance, hedging and contracts. Finally, the paper will discuss the role of government in managing risk within a supply chain.

Risk is defined as an uncertain event or set of events that, if it occurs, could have a positive or negative effect on a business (Investopedia, 2017). Risk can come from many sources, including suppliers, customers, competitors, natural disasters and political instability. Businesses must identify and assess risks in order to be able to manage them effectively.

There are many ways that businesses can manage risk. One way is through insurance. Insurance can protect a business from losses that may occur as a result of risks such as fire, theft or natural disasters. Another way to manage risk is through hedging. Hedging is a technique used to offset the potential losses that may be incurred as a result of price changes or fluctuations in the market. businesses can also use contracts to manage risk. Contracts can be used to transfer the risk of loss from one party to another. For example, a business may require its suppliers to provide it with goods that meet certain standards in order to reduce the risk of receiving defective products.

The government also plays a role in managing risk within a supply chain. The government can do this by providing incentives for businesses to invest in risk management strategies. It can also create laws and regulations that require businesses to take certain steps to protect themselves from risks.

In conclusion, risk evaluation and management is an important part of a supply chain. Businesses must identify and assess risks in order to be able to manage them effectively. There are many ways to manage risk, including insurance, hedging and contracts. The government also plays a role in managing risk within a supply chain by providing incentives for businesses to invest in risk management strategies and creating laws and regulations that require businesses to take certain steps to protect themselves from risks.