The scenario describes a drop in share price and high levels of Work-in-Progress (WIP). A drop in share price is a direct manifestation of financial risk, as it impacts the company's market valuation and shareholder wealth. High WIP also represents a significant financial risk because it ties up working capital, increases holding costs, and can lead to obsolescence, negatively affecting cash flow and profitability. While the trigger is a logistical failure (late deliveries), the resulting consequences described for the business are primarily financial in nature.

B. logistical: This is the source or cause of the problem (late supplier deliveries), not the resulting risk category that includes a drop in share price and capital being tied up.

C. opportunity: This risk relates to the potential loss from forgoing an alternative course of action, which is not the direct problem described in the scenario.

D. reputation: While ongoing supply issues can eventually harm a company's reputation, the question highlights immediate and quantifiable financial impacts, making 'financial' the most precise answer.

1. CIPS (Chartered Institute of Procurement & Supply). (2018). Managing Supply Chain Risk (L5M2). Stamford

UK: Profex Publishing. In the section on 'Categories of Risk

' financial risks are defined as those pertaining to the financial health and viability of the organisation. This includes risks to profitability

cash flow

and shareholder value (which is directly impacted by share price). High WIP is a working capital issue

which falls under financial risk management. (Specific chapter on risk categorisation).

2. Waters

D. (2011). Supply Chain Risk Management: Vulnerability and Resilience in Logistics. London: Kogan Page. Chapter 2

"Types of Risk

" categorises risks and explains how operational disruptions (like late deliveries) translate directly into financial risks

such as increased costs (from holding WIP) and reduced revenue

ultimately affecting company valuation.

3. Chopra

S.

& Sodhi

M. S. (2004). Managing Risk to Avoid Supply-Chain Breakdown. MIT Sloan Management Review

46(1)

53-61. This article discusses how supply chain disruptions (a form of logistical risk) create significant financial consequences for a firm

including impacts on stock price and increased working capital requirements

reinforcing the link between the logistical cause and the financial effect.