A production manager is looking for new sources of raw material because he is cocerned about the effects of a long term drought. this anager is engaging in _________
offshore oursourcing
scenario analysis
enterprise risk management
dversification planning
diversification planning
The production manager is engaging in diversification planning.
The production manager is engaging in diversification planning.
To understand why, let's break down the different options:
1. Offshore outsourcing: This refers to the practice of sourcing goods or services from a foreign country. It involves hiring a company located outside of the home country to produce goods or provide services. While this may be a viable option for reducing costs or accessing new markets, it doesn't directly address the concern about the effects of a long-term drought on raw material availability.
2. Scenario analysis: This is a technique used to evaluate the potential outcomes of different scenarios or situations. It involves considering various possible future events or conditions and assessing their impact on the organization. Although scenario analysis could be part of the decision-making process, it is not the specific activity the production manager is engaging in.
3. Enterprise risk management: This is a process by which organizations identify, assess, and prioritize risks and develop strategies to mitigate them. While the production manager's concern about the effects of a long-term drought falls within the realm of risk management, it does not encompass the broader concept of enterprise risk management, which covers all types of risks throughout the organization.
4. Diversification planning: This refers to the strategy of expanding the sources of raw materials, suppliers, or markets to reduce dependence on a single source. By actively searching for new sources of raw materials due to concerns about a long-term drought, the production manager is engaging in diversification planning. This approach allows the manager to mitigate the potential risks associated with relying solely on a single source.
In conclusion, the most appropriate term for the production manager's action is diversification planning.