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    Risk Probability of Event X Cost of Event

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    muneerpp
    Risk can be defined as the perceived extent of possible loss. There are various types of risks including human, procedural, natural, technical, political, project, and financial risks. The steps for risk analysis include: 1) identifying threats, 2) estimating the risk by determining the likelihood and impact of threats, and 3) managing risks by using existing assets, contingency planning, and investing in new resources. Regular reviews of risk analysis and management are also important.

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    Risk Probability of Event X Cost of Event

    Uploaded by

    muneerpp
    289 views7 pages
    Risk can be defined as the perceived extent of possible loss. There are various types of risks including human, procedural, natural, technical, political, project, and financial risks. The steps for risk analysis include: 1) identifying threats, 2) estimating the risk by determining the likelihood and impact of threats, and 3) managing risks by using existing assets, contingency planning, and investing in new resources. Regular reviews of risk analysis and management are also important.

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    Risk Analysis

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    Risk can be defined as the perceived extent of possible loss. There are various types of risks including human, procedural, natural, technical, political, project, and financial risks. The steps for risk analysis include: 1) identifying threats, 2) estimating the risk by determining the likelihood and impact of threats, and 3) managing risks by using existing assets, contingency planning, and investing in new resources. Regular reviews of risk analysis and management are also important.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    289 views7 pages

    Risk Probability of Event X Cost of Event

    Uploaded by

    muneerpp
    Risk can be defined as the perceived extent of possible loss. There are various types of risks including human, procedural, natural, technical, political, project, and financial risks. The steps for risk analysis include: 1) identifying threats, 2) estimating the risk by determining the likelihood and impact of threats, and 3) managing risks by using existing assets, contingency planning, and investing in new resources. Regular reviews of risk analysis and management are also important.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 7

    Risk

    ■ Risk can be defined as 'the perceived extent of possible loss'.


    Different people will have different views of the impact of a
    particular risk - what may be a small risk for one person may
    destroy the livelihood of someone else.
    ■ One way of putting figures to risk is to calculate a value for it as

    Risk = probability of event X cost of


    event
    Steps for Risk Analysis
    1. Identify Threats

    • Human - from individuals or organizations, illness, death, etc.


    • Procedural - from failures of accountability, internal systems
    and controls, organisation, etc.
    • Natural - threats from weather, natural disaster, accident,
    disease, etc.
    • Technical - from advances in technology, technical failure, etc.
    • Political - from changes in tax regimes, public opinion,
    government policy, foreign influence, etc.
    • Project - risks of cost over-runs, jobs taking too long, of
    insufficient product or service quality, etc.
    • Financial - from business failure, stock market, interest rates,
    unemployment, etc.
    • Others
    2. Estimate Risk:

    ■ Once you have identified the threats you face, the next step is to
    work out the likelihood of the threat being realized and to assess
    its impact.
    ■ One approach to this is to make your best estimate of the
    probability of the event occurring, and to multiply this by the
    amount it will cost you to set things right if it happens. This gives
    you a value for the risk.
    3. Managing Risk

    Once you have worked out the value of risks you face, you can
    start to look at ways of managing them. When you are doing
    this, it is important to choose cost effective approaches - in most
    cases, there is no point in spending more to eliminating a risk
    than the cost of the event if it occurs. Often, it may be better to
    accept the risk than to use excessive resources to eliminate it.
    Risk may be managed in a number of ways
    • By using existing assets:
    Here existing resources can be used to counter risk. This
    may involve improvements to existing methods and systems,
    changes in responsibilities, improvements to accountability
    and internal controls, etc.
    • By contingency planning:
    You may decide to accept a risk, but choose to develop a
    plan to minimize its effects. A good contingency plan will
    allow you to take action immediately, with the minimum of
    project control.
    • By investing in new resources:
    Your risk analysis should give you the basis for deciding
    whether to bring in additional resources to counter the risk.
    Reviews

    Once you have carried out a risk analysis and management


    exercise, it may be worth carrying out regular reviews. These
    might involve formal reviews of the risk analysis, or may involve
    testing systems and plans appropriately.

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