What mathematical equation most closely defines supply chain risk? Supply chain

Question

What mathematical equation most closely defines supply chain risk?

Supply chain risk = Dollars spent on prevention * Event probability

Supply chain risk = Supply risk + Demand risk + Process risk + Control risk - Environmental risk

Supply chain risk = sqrt (Probability of an event * Liklihood of an event) ^ Chances of an event * 2

Supply chain risk = Probability of an event * Impact of that event

Supply chain risk = Dollars spent on prevention * Event probability

Supply chain risk = Supply risk + Demand risk + Process risk + Control risk - Environmental risk

Supply chain risk = sqrt (Probability of an event * Liklihood of an event) ^ Chances of an event * 2

Supply chain risk = Probability of an event * Impact of that event

Explanation / Answer

Supply risk is defined as the probability of an incident associated with inbound supply from individual supplier failures or the supply market occurring, in which its outcomes result in the inability of the purchasing firm to meet customer demand or cause threats to customer life and safety.

Such external supply chain risks can be categorized as per following :

        Demand risks - caused by unpredictable or misunderstood customer or end-customer demand

Supply chain risk for each of such attributes can be calculated as probability of such risk/ incident occurring x Impact of sch occurrence on the entity/ company

SUPPLY CHAIN RISK = PROBABILITY OF AN EVENT X IMPACT OF THAT EVENT

SUPPLY CHAIN RISK = PROBABILITY OF AN EVENT X IMPACT OF THAT EVENT

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