Which risk category addresses laws and regulations affecting supply chains?

• A. Demand variability
• B. Regulatory/compliance
• C. Transportation disruption
• D. Financial

Answer: (B)

Regulatory and compliance risk focuses on laws, regulations, and standards that govern supply chains. This includes things like import/export controls, sanctions, product safety and labeling requirements, environmental rules, and labor laws. When laws change or regulatory expectations tighten, they can alter sourcing, manufacturing, or distribution needs, and failing to comply can lead to fines, recalls, delays, or shutdowns. That direct link to legal requirements is why this category is the best fit for questions about laws and regulations affecting supply chains.

Other risk areas cover different issues: demand variability deals with fluctuations in customer orders, transportation disruption with risks to moving goods, and financial with money-related concerns like costs and credit.