Which of the following will you put into box 7?

The question, though missing the visual diagram, points to a standard risk management model used in supply chain management. "Box 7" would logically represent an example of a specific risk response strategy. Outsourcing is a primary example of a Risk Transfer strategy. By contracting a business function to an external provider, an organisation transfers the associated operational risks (e.g., performance, quality, labour issues) to that third party. This is a fundamental technique for managing risks that are outside the organisation's core competencies or for which another party has superior risk management capabilities.

A. new technology: This is typically a strategy to 'Reduce' or 'Treat' risk by improving process efficiency or control, not to transfer it to another entity.
B. forward contract: This is a specific financial instrument used to transfer price volatility risk. It is a narrower form of risk transfer than the broad operational strategy of outsourcing.
D. insurance: This transfers the financial consequences of a risk event to an insurer but does not transfer the operational management of the risk itself, which outsourcing does.

1. Lysons, K., & Farrington, B. (2020). Procurement and Supply Chain Management. Pearson. In Chapter 21, 'Risk management and supply chain vulnerability,' the authors categorise risk responses. Under the 'Transfer' strategy, they state, "Risk can be transferred by means of... outsourcing activities to a third party who is better able to manage the risk" (p. 551).

2. Waters, D. (2011). Supply Chain Risk Management: Vulnerability and Resilience in Logistics. Kogan Page. Chapter 7, 'Responding to risk,' outlines four main responses: risk avoidance, risk transfer, risk mitigation, and risk acceptance. Outsourcing is presented as a key method for risk transfer (pp. 134-135).

3. Christopher, M. (2016). Logistics & Supply Chain Management (5th ed.). Pearson. Chapter 10, 'Managing risk in the supply chain,' discusses strategies for mitigating supply chain risk. It identifies that risk can be transferred through mechanisms like outsourcing, where a third party assumes responsibility for a specific function and its inherent risks (p. 238).