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Company DDD has recently seen a drop in share price and has high levels of Work-in-Progress (WIP) due to late supplier deliveries. Which of the following is the type of risk the business facing?
Suggested Answer: A
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This is a financial risk. A drop in share prices is a huge financial risk for a company. Having lots of items as WIP is also a financial risk as this signifies that a lot of money is tied up in stock being held on site. Types of risk are very popular exam questions for this module- for a full list of these and s see p.11
12 comments · newest first
PR
Princess
2 months ago
I lean towards A) financial. Share price drop indicates financial risk too.
TY
Ty
2 months ago
Agreed, B) logistical makes sense. It directly affects production.
TA
Tambra
2 months ago
I think it's B) logistical. Late deliveries cause WIP issues.
LI
Lizette
2 months ago
Not sure if it's just logistical; could be a mix of financial and reputation issues.
OM
Omega
3 months ago
Wait, are they really facing a reputation risk too? That seems surprising!
PR
Precious
3 months ago
Agreed, it's all about the logistics here.
IL
Ilene
3 months ago
I think it's more of a financial risk with the drop in share price.
AH
Ahmad
3 months ago
Definitely a logistical risk. Late deliveries are a big issue.
GE
Genevive
3 months ago
Reputation risk could be a factor too, especially if customers are unhappy with delays. It's hard to choose just one!
HA
Hayley
3 months ago
Opportunity risk sounds like it could fit, but I feel like that's more about missed chances rather than current issues.
ME
Meaghan
4 months ago
I remember a practice question about supplier delays affecting operations. That might relate to logistical risk here.
EU
Eugene
4 months ago
I think the drop in share price suggests a financial risk, but I'm not entirely sure if it's just that.