Business Continuity Professional Exam Prep

Category - Risk Evaluation & Control

A retail chain decides to outsource integration of its POS system with inventory tracking system. This is an example of risk ___________:
  1. Reward
  2. Sharing
  3. Avoidance
  4. Retention
  5. Identification
Explanation
Answer. B. Outsourcing is generally an example of risk sharing. Who bears what risk is often determined in the contracting process.

Key takeaway: Since the accountability is passed onto the vendor (at a cost), the risk gets shared amongst contracting parties. Since the firm hired generally has expertise, the overall risk is lower.
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