Expensive and technically complicated supplies generally carry high financial risk, but low supply risk for...

In CIPS L4M6, supply risk is analysed alongside financial risk. Expensive and technically complex items are frequently bespoke or highly specialised, meaning that:

There are few alternative suppliers

Switching suppliers is difficult, costly, or impossible

This significantly increases supply risk, not reduces it. While financial risk is high due to value and complexity, supply risk is also high due to dependency and limited market availability.

The incorrect options misunderstand supply risk:

Single sourcing increases supply risk

Easy switching is rarely possible for complex supplies

High-value complex items never carry low combined risk

L4M6 Reference:

Learning Outcome 2: Understand supply chain risk and resilience

Topic: Financial risk vs supply risk

CIPS L4M6 Study Guide – Risk positioning and Kraljic portfolio thinking