I have a three documents and one tablet and I want to merge the three documents
I have a three documents and one tablet and I want to merge the three documents together. The main one it’s operation rescue policy is the main one and I need to merge with the group operation Risk management and the other documents Operation appetite so basically I don’t change anything. The first documents policy. I need to copy paste Policy on you to write a new word just The documents
For the purposes of this activity, please pick two countries, outside of the Uni
For the purposes of this activity, please pick two countries, outside of the United States, which you
would like to learn more about. Below is a list of several resources which can be used to assess country
risk as you are working on this activity. Prepare a list of characteristics about each country which you
can share in a small group and potentially with the class, answering the questions below. You will
submit the information which you have assembled individually for a grade on this assignment. You
should include the following for each of the two countries:
1. Name of each country
2. Currency or currencies used by each country
3. Language(s) of each country
4. Exchange rate for the currency/currencies to the U.S. Dollar for each country (Give Date, Time,
& Source of the exchange rates)
5. What is the trend of the exchange rate for each currency compared to the U.S. Dollar over the
past month? How about the past year? How about the past 5 years?
6. Based upon review of three or more sources below, what is your assessment of the Country Risk
for each country?
7. Optional: Cite one or two cultural factors in each of the countries which you think might be
relevant to doing business in the country.
8. Which of the two countries, if applicable, would you see as potentially having more risk in terms
of an investment for a multinational corporation based in the United States? Is there some
variation depending upon which sources you used or the nature of the business? If so, explain.
How would this risk for each country compare to doing business in the United States?
9. What are some methods you could use in order to mitigate country risk and/or factor country
risk qualitatively and quantitatively into your analysis of potential investment?
List of Resources to Assess Country Risk
2023 Corruption Perceptions Index: Explore the… – Transparency.org
Business Ready (B-READY) (worldbank.org)
Doing Business Legacy (worldbank.org)
Home | Worldwide Governance Indicators (worldbank.org)
Credit Rating – Countries – List (tradingeconomics.com)
Country Risk Classification (oecd.org)
International Property Rights Index
Social, Emotional, And Behavior Risk Screening
The purpose of this study is to evaluate students’ social, emotional, and behavioral risk by using a universal screening tool within a multitiered system of supports. Identifying students who are at risk has become of vital importance. Still, although, it is critical, many schools have not implemented universal screening procedures, instead rely on more responsive methods of student identification. A common concern of universal screening includes the potential for the over-identification of at-risk students and the exhaustion of already limited school resources. This research proposal discusses the importance of universal screening for all students for social, emotional, and behavioral risks. Through research, the results suggest screening is an essential tool for helping school personnel come up with preventative measures for addressing student barriers to learning.
Social and emotional development during the early childhood is an essential foundation for a child’s success (Raver, 2002). It has been reported by the National Academy of Sciences that 60% of children go into school with the cognitive skills that are necessary to be successful. Still, it has been reported that only 40% have the necessary social-emotional skills to succeed in kindergarten (Raver, 2002). Research has undoubtedly shown that students’ emotional and behavioral adjustment is significant for their chances of early school achievement. Educational systems tend to put importance of cognitive and academic readiness yet, ignore the value of a child’s social-emotional growth (Raver, 2002). When students have a postive outlook on their social and emotional being, they can develop positive relationships with others. Students who know how to manage their feelings are more likely to be ready to learn. A significant amount of research reveals that the early years are very influential in later development (Shonkoff & Phillips, 2000). For some young children, the existence of challenging behavior is a significant hindrance to their success in early childhood settings and even systematic social and academic problems throughout school (Carter, Briggs-Gowan, & Davis, 2004). While presenting some challenging behaviors during rapid childhood development is normal, some children display challenging behaviors that are more long-lasting and result in considerable difficulties for the student. Therefore, it is vital to have focused on early intervention services available to them and their families to help prevent long-term problems (Gorey, 2001). The critical step towards recognition of such issues and the prevention of more significant effects is to perform screenings across developmental areas to help identify those children that would benefit from early and specialized intervention strategies. Universal screening enables teachers, school counselors, and others provide along with families to promptly identify problems and implement plans that are likely to reduce the chance of long-term detrimental results, including severe persistent challenging behaviors. Screening does not only helps identify social and emotional needs but also allows counselors, teachers, and other service providers better understand the child.
As students range from kindergarten until the twelfth grade, they come to school with a variety of academic, social, and behavioral abilities. As students attain an abundance of skills, students are prepared to meet the many demands and challenges that lie ahead for a successful educational experience. However, many students struggle in one or more of these areas during their educational careers. Research has indicated that although educators feel confident in meeting the needs of their students academically, they do not feel adequately prepared to meet their social and emotional needs (Christofferson & Sullivan, 2015).
Early identification of at risk-students represents a significant prevention method. One of the central means by which schools can engage in early prevention is through universal screening. The Individuals with Disabilities Education Improvement Act (2004) supports the use of universal screening in schools, indicating it represents a proactive method of detecting students who require additional supports to be successful. Universal screening for social-emotional and behavioral risk is on the rise, with the percentage of schools engaging in the practice doubling over the last decade (Kilgus, Taylor, & Embse, 2016). According to the study done by Kilgus, Bowman, Crystal, & Taylor (2017), it states that ‘despite promising advances in the science of school-based universal screening, it is rare to find schools that use universal screening to detect students at risk for behavioral concerns’ (p.246). Therefore, when conducting my research, I needed to determine how important it is that students be screened for social, emotional, and behavioral risks. According to research done by the Collaborative for Academic, Social, and Emotional Learning (CASEL) identified ‘social and emotional factors’ as the most powerful influence over students’ achievement in schools (CASEL, 2012).
A section in the article stated that ‘students are routinely screened for physical health issues (e.g., hearing and vision). However, emotional and behavioral health issues are generally detected after they have already emerged. It is time for that to change’ (CASEL, 2012). Students who walk through the doors of their school have more to them than just their backpacks. Each child brings other factors of life that shape their learning and development. These influences range from family issues, health concerns, culture, and learning abilities. All these factors can impact their mental health, which includes their social, emotional, and behavioral beings. ‘As education professionals, school staff need to understand the role mental health plays in the school context because it is so central to our students’ social, emotional, and academic success’ (CASEL, 2012). According to research done by Magellan Health insights (2013), approximately less than 20% of children and adolescents with a diagnosable mental health issue receive the treatment that they need. If we had screening done within schools, then we would be able to diagnose students sooner and help them gain the help and supports that they need. Thus, the importance of universal screening for social, emotional, and behavioral risk. To best help support the use of universal screening, according to the study done by Kilgus, Eklund, von der Embse, Taylor, & Sims (2016), schools are increasingly adopting a multitiered system of support (MTSS) as the foundation of their social-emotional and behavioral delivery models. MTSS models represent a prevention-orientation to addressing student needs, with a foundation of ecological theory, data-based decision making, and problem-solving logic (p. 21). Through this system, it is focused on supporting the ‘whole child’ and is a support to promote positive student academic and behavioral outcomes and is driven from data based on SAEBRS (Ziomek-Daigle, Goodman-Scott, Cavin, & Donohue, 2016). ‘MTSS consists of a continuum of three tiers of prevention: primary, secondary, and tertiary’ (Kilgus and et.al., 2016). Based on the scores of their SAEBRS assessment will determine which of the three tiers that the students will receive interventions in. The CASEL (2012) article stated that Universal screening for these concerns, mainly when implemented within a multitiered model of behavioral support, may help these students receive earlier services than they otherwise would and may prevent the need for more intensive special education or therapeutic services.
The sample of students used will be all students from each class, K-5. Although the purpose of this study will be focused on elementary students, SAEBRS can be used throughout grades K-12. The questionnaire will be provided to students during school hours using an iPad, laptop, or Chromebook and, if necessary, paper and pencil and later entered in the computer system by a counselor. The universal screener will be used two times throughout the school year. The questionnaire will need to be done by the end of the first month and then again filled out before spring break by both student and teacher.
SAEBRS. SAEBRS is a brief instrument supported by research for use in universal screening for behavioral and emotional risk. Students and Teachers will complete the SAEBRS using a 4-point Likert scale (0 = never, one = sometimes, 2 = often, and 3 = almost always) to indicate how frequently the student displays certain behaviors within a month. Scores are then totaled within each subscale and combined to produce a score. Higher scores are symptomatic of more adaptive functioning. Screening may be conducted up to five times per year with individual students or across a classroom, grade level, school, or district (SAEBRS, 2019). For this study, the screening will be conducted twice throughout the school year. Testing is completed in roughly one to three minutes per student using an iPad or Chromebook. If needed, the questionnaire can be used with paper and pencil and entered in by the counselor. The amount of time required for the screening depends on the student’s understanding and comprehension of the questions asked.
The Behavioral and Emotional Screening System is a 19-item universal screener. Scores will be developed from four areas (Internalizing Problems, Externalizing Problems, Academic problems, and Adaptive Skills), and are combined to generate one score suggestive of behavioral and emotional risk. Students and teachers complete behavioral and emotional screening items using a 4-point Likert scale. Item scores will then be totaled to produce a total raw score, which is converted to a T score (M =50, SD= 10). Higher scores are indicative of more concerns involving general behavioral and emotional performance. T scores will be categorized into three levels of risk. Studies have supported Behavioral and Emotional screener with reliability, validity, and diagnostic accuracy (Jenkins et al., 2014).
SAEBRS analytical accuracy will be assessed using a curve analysis. Within the curve analysis, two sets of statistics can be calculated. The first set is linked to the area under the curve statistics. The Curve analyses will be used when defining the degree to which the predictor measure creates similar rates of sensitivity between groups as compared with a reliable means of the same trend, which then produces the area under the curve.
Two sets of statistics will be used to evaluate the diagnostic accuracy of scores from each SAEBRS scale relative to the emotional and behavioral assessment total score. The first of these are statistics that are defined as the probability that a randomly selected truly at-risk student (according to the Emotional and Behavioral assessment total score) would have a lower score on the SAEBRS than a randomly chosen not at-risk student. The second set of statistic diagnostic accuracy indicators are probability statistics, as well as additional statistics resulting from the short-term probability standards. Descriptors used on the scale will determine the need for each score. Students who are identified as at-risk will be indeed at risk, positive values that the students identified as at-risk defined by SAEBRS who are genuinely at risk. Negative values are the number of students identified as not at risk determined by the SAEBRS, who was indeed not at risk. These scores will help determine those students who genuinely need interventions and supports.
There are several variables within the study. The dependent variable will be the student’s social, emotional, and behavioral risk. The independent variable would be the student’s understanding of the questionnaire and the student’s emotional and behavioral state. If the student has a difficult time understanding and comprehending the 19- items presented and if the student is unable to answer the questions based on their emotional and behavioral state can alter the information. The questionnaire will help counselors and teachers determine the students who are at risk for social, emotional, and behavioral risks. Once this is determined, proper interventions can be set in place to help support the child to their needs.
To determine the results of the SAEBRS screener, it is based on a curve analysis. The data below the curve analysis (positive values) are those who are at risk, and those who are within the curve analysis (negative values) are those students who are not truly at risk. Once the results are based on the 19-item questionnaire that the students and the teachers have both taken, then it will determine if the student is a risk or within the normal range. Based on each student’s results, the counselor will meet with them and discuss possible interventions and supports to help meet the needs of the students socially, emotionally, and behaviorally through the MTSS system.
This study would be essential to identify those students who are in the school systems who would need supports but are often undetected due to the students not showing the visible signs of social, emotional, and behavioral problems. While counselors often work with the students who do have apparent signs of struggle, this tool will help identify other students who need supports. Through counselors overwhelming schedules and working with the students who need interventions, the students who do not show apparent signs of struggle are missed. This leads to the problems of students not receiving mental health interventions who need them, leading to a more significant problem of mental health issues. Through using SAEBRS, we can screen each student for social, emotional, and behavior risk and start to provide them with supports so that their education and well-being can thrive.
Limitations of this study would be the support of the educators. Not all educators understand the importance of mental health; therefore, they do not support universal screening. Educators need to be educated and understand why every student should be screened for social, emotional, and behavioral risks. It needs to be made a priority in schools. Another limitation of this study would be access to the use of technology. Some schools do not have many IPADs, Chromebooks, or laptops for students to use for screening students. Lastly, another limitation of the study would be the student’s comprehension and honestly on the assessments. If the students understand why they are being assessed, they may not answer honestly, and this would change the results of the data evaluated. Also, if students do not have good reading comprehension and are not able to understand the test can alter the results.
For future research on this subject, it would be beneficial to look at other screening tools. The study could be repeated with another screening tool and use that to compare to SAEBRS to determine if this is an appropriate screening tool for the students and school. Each school may use a variety of universal screening tools. The most important thing to know and understand is that each student must be screening for social, emotional, and behavior risk.
Determinants Of Risk Management Efficiency Of Private Commercial Banks In Ethiopia
The most important challenge faced by the banking industry today is the challenge of understanding and managing the risk in the banking business where a threat of risk is imbibed in it. A well-functioning financial system facilitates efficient intermediation of financial resources to the economy. The more efficient the financial system in resource generation and allocation is the greater in its contribution to economic growth and sustainability (Mohan, 2005). Financial institutions play a key role in economic growth and development because they supply money for individuals, business sectors, lend government organizations etc. Moreover, financial institutions help the government in assessing and bearing out the monetary and economic policies, and provide a wide variety of economic services such as money transfer, foreign exchange, facilitate international trade, market stabilization and other related activities.
To investigate the status of risk management practice in Ethiopian commercial banks a survey were conducted on November 2009. Questionnaires were distributed for a sample of 15 Ethiopian banks. The report revealed that credit, liquidity and operational risks were key bank risks over the last two years and would continue to be so over the next five years. But, the study did not identify the factors that affect risk management efficiency of Ethiopian banks. Therefore, identifying the factors that affect risk management efficiency of Ethiopian banks is open for empirical analysis.
In Ethiopia, private commercial banking system has been witnessing a significant expansion over the past ten years than before even though the Ethiopian banking industry was still Underdeveloped. A survey made by National Bank of Ethiopia (NBE) (2010), believes that such growth should be matched with strong risk management practices. This is because with the fastest economic growth of the country, societal demand of various banking service also increase and this situation may increase level of risks on the banks unless and otherwise banks have introduced effective risk management program.
A number of relevant studies regarding risk management in banks were made across the world. A study by Piyananda et al (2015) were made considering capital adequacy as a dependant variable and aims to identify the significant bank specific determinants of risk management efficiency of the listed commercial banks in Sri Lanka. The study revealed that the credit risk, liquidity risk, ROA, operational efficiency and banks’ size are the important factors of determining the degree of (CAR) capital adequacy ratio of commercial banks in Sri Lanka. Capital adequacy ratio (CAR) generally represents the safety moderate which can understand any unexpected loss that banks might face when operating in a highly uncertain environment. It represents the solidarity and stability of financial institutions.
The issue of risk management was concern of researchers such as Emira(2013) that have conducted research on Comparative Analysis of Risk Management in Conventional and Islamic Banks (The Case of Bosnia and Herzegovina). This research paper tries to determine the dependence of banks’ financial performance on the risk management. The results of this research reveal that still practices of risk management are developing worldwide. Anas & Fauziah (2014) also studied the impact of financial risk on Islamic banks’ profitability. However, their findings found to be different across country, bank nature and ownership structure.
Determinants of the risk management efficiency can be two fold; mainly internal and external. Internal factors are the bank specific factors whereas the external determinants are macroeconomic factors, which can be the growth rate of Gross Domestic Product (GDP), changes in interest rates and inflation rates etc.
In Ethiopia a number of risk management related studies were undertaken in commercial banks ignoring the issue of determinants of risk management efficiency and trying to study points like the relationship between risk management and profitability; credit risk issues and risk management practices. In this regard a study by Eneyew(2013) examines the impact of financial risk on profitability of commercial banks in Ethiopia. Fasika(2012) has investigated selected Ethiopian commercial banks operational risk management and Tibebu (2011) has studied on the impact level of credit risk management towards the profitability of commercial banks in Ethiopia. Emawayih(2017) assesses the determinants of financial risks in private commercial banks using credit risk and liquidity risk indictors. Endawek (2015) deals with the impact of risk management on performance of banks. Yalemzewd(2013), Girma(2010), conducted on credit risk and performance of banks and Fikremariam(2018) conducts a research on factors affecting credit risk management practices in private commercial banks. In all the available research works there is no specific study on risk management efficiency of commercial banks in Ethiopia which shows as there is a knowledge gap to show clear cut determinants of risk management efficiency in Ethiopian commercial banks. This initiates the researcher to investigate on the problem.
In this regard a study by Tilahun Amiro & Dugasa Afisa (2014) on the bank specific determinants of credit risk in Ethiopian commercial banks, only bank specific determinant variables such as bank size, profitability, capital adequacy, liquidity, credit growth, operating efficiency and ownership were used. This study differs from the previous studies in that it is addressing the problem for the first time in Ethiopian Commercial banks and considers bank specific and macroeconomic variables in the study. The dependant variable of this study is Capital adequacy ratio (CAR) as a proxy to risk management efficiency in banks and the bank specific variables were credit risk, liquidity risk, profitability, bank size, operation efficiency and market risk. The macroeconomic variables used in this study were GDP growth, inflation, lending interest rate and foreign exchange rate.
The main purpose of the study is to follow a comprehensive approach towards identifying determinant factors of risk management efficiency taking into account some private commercial banks in the country. In the context of this study, the risk management efficiency, as indicated above, was measured through the CAR while investigating the internal and external factors that may affect risk management efficiency in private commercial banks in Ethiopia.
In the enormous field of Information Technology, the term ‘Hazard Management’ alludes to the various systems to diminish and avert potential risks to an organization/association. This is finished by people who recognize, survey and control potential security dangers. These threats could emerge from a various scope of sources, including budgetary insecurity, methodical mistakes and lawful liabilities. For some, driving organizations, security dangers and information related dangers being top need has enabled organizations to progressively reinforce their benefits.
A hazard is whatever could possibly affect your venture’s course of events, execution or spending plan. Dangers are possibilities, and in a task the executives setting, on the off chance that they become substances, they at that point become delegated ‘issues’ that must be tended to. So hazard the executives, at that point, is the way toward recognizing, sorting, organizing and arranging for dangers before they become issues.
Each business and association face chance anyway with Risk Management usage set up, organizations can limit the exposures to peril and can deal with circumstances before they happen to counteract abundance costs, threat to notoriety and guarantee security of people included. It is the methodology used by errand chiefs to restrict any potential issues that may conversely influence an endeavor’s timetable. Danger is any unexpected event that may impact the people, methodology, advancement, and resources related with an errand. As opposed to issues, which make certain to happen, perils are events that could occur, and you will undoubtedly be not able tell when. In view of this weakness, adventure danger requires certifiable course of action to manage them viably.
Having a Risk Management plan is vital. By executing through with this, organizations are thinking about the different potential occasions which may occur. This can enable business organizations to get ready and act proficiently and successfully. A full-bodied arrangement will enable an organization to set up activities, limit the effect of the circumstance and make do with the end result. Taking into account the association to comprehend and control the factors of hazard included can take into consideration entrepreneurs to feel guaranteed, positive and certain about their business choices. It will likewise permit solid corporate organizations to uphold rules that attention explicitly on counteractive action of dangers and can help organizations accomplish their ideal headways. Effective peril the administrators systems empower you to recognize your undertaking’s characteristics, weaknesses, openings and threats. By masterminding unanticipated events, you can be set up to respond if they rise. To ensure your endeavor’s thriving, describe how you will manage potential risks so you can recognize, reduce or evade issues when you need to do. Powerful errand chiefs see that peril the board is huge, on the grounds that achieving an endeavor’s goals depends after orchestrating, arranging, results and appraisal that add to achieving fundamental target other benefits of having a risk management plan in place ensures to create a safe and secure workplace environment for staff members and other interactions with others, increase stability of business activities taking into account decreasing legitimate obligation. It is likewise giving assurance from occasions that are harming to the organization’s notoriety, resources from potential damage and permit to set aside cash from extra expenses through pointless premiums when experiencing protection
A risk is alluded as a conceivable peril to PC security which may abuse defenseless data to rupture security. A case of a danger incorporates, infections, Trojans and programmers hacking into a product. The risk is generally followed up on a thought process. A danger source is portrayed as an episode or condition where there is probability to destruct an IT framework. Guaranteeing tricky business data in movement still is a measure couple of endeavors directly can’t get a handle on, despite its sufficiency. The social protection industry handles sensitive data and understands the gravity of losing it – which is the explanation HIPAA consistence requires every PC to be encoded. In Information Security risks can be many like Software attacks, thievery of authorized development, information extortion, theft of equipment or information, harm, and information pressure.
Danger can be whatever can exploit a defenselessness to rupture security and contrarily adjust, eradicate, hurt item or objects of intrigue.
One of the significant strides in recognizing the wellspring of danger should be possible through recognizing the previous sources. This can consider IT framework to evaluate the PC security. The 3 basic danger sources are isolated into either Natural dangers, Human dangers and Environmental dangers. Regular dangers, for example, a cataclysmic event like floods, may destroy the hardware, for example, the PC causing harm, and may cause loss of information. Human dangers can occur in 2 distinct manners, it can occur coincidentally, for instance an individual may have entered information wrong making it be mistaken. It additionally might be purposefully, for instance, downloading Trojans to break through to delicate and private data to use in a wrongly doing act. A huge amount of the time, the articulation ‘hazard understanding’ is used to delineate the wellsprings of this data, yet in reality they’re noble motivations of data that must be taken care of before they can be seen as information. As computerized perils become logically progressed, yet what’s more progressively open (you can buy malware code from the dull web for two or three dollars), the ought to be responsive with against disease affirmation, anyway altogether more so proactive is growing always. Peril learning fuses gathering significant and important data and dealing with this information together to update an affiliation’s advanced security
A couple of bodies set out the gauges and principles for the system of peril the board. The methods included proceed as before basically. There are little assortments related with the cycle in different sorts of risk. The perils being referred to, for example, in assignment, the officials are particular conversely with the threats included reserve. These records for explicit changes in the entire risk the administrators’ system. Anyway, the ISO has set out explicit steps for the strategy and it is all around material to a wide scope of danger. The principles can be applied for the term of the life of any affiliation and a wide extent of activities, including methods and decisions, exercises, structures, limits, adventures, things, organizations and assets. All Risk Management Plans pursue comparative stages to make the general procedure to help guarantee that it is fruitful. The accompanying advances included are:
– Establish Context: Understanding the conditions in which the procedure will be applied in. The measures that will be utilized to assess dangers ought to be considered and the examination of the structure ought to be plot.
– Identifying Risks: Aiming to appreciate the basic potential dangers that may contrarily effect organizations, or ventures.
– Analysing Risks: Once the hazard elements are recognized, it is the duty of the association to keep this from re-happening. This stage likewise thinks about what hazard could be included and how it might adversely affect the target and activities.
– The Risk Assessment and Evaluation: The fundamental result from this stage is to further improve information and execute activities to help stop this kind of circumstance and different circumstances like it reoccurring. The organization can than assess whether the choices with the dangers included are justified, despite all the trouble.
– Risk Justification: In this stage, organizations evaluate their highest grouped hazard and build up an arrangement to improve their hazard the board plan. Utilizing explicit strategies and assessing the plausibility of this circumstance happening again and back up plans.
– Risk Monitoring: Part of the Justification stage incorporates following up on both the dangers and
The arrangement to screen and track both new and existing dangers. The Risk Management plan is then modified and defended in like manner. In IT related organizations this alludes to the new infections or bugs included.
– Consultation and Communication: In this progression, it is resolute that both staff, investors included are addressed and mindful of the accompanying issue. It is good in the event that they are incorporated and their perspectives and thoughts are heard to help guarantee a consequence of what should be possible to the entire procedure. For models inquiries might be posed:
• What is the probability of this circumstance perhaps reoccurring?
• How is this influencing the notoriety of the business?
• What changes can be made to the current programming?
• How will it influence the association and the relations with different partners?
Risk Management Approaches:
Each endeavor appearances a ton of peril straightforwardly from the earliest starting point till its end. A peril could possibly be sudden and can act itself like an opportunity or a threat to the endeavor. Perils may be business threats (with increases or hardships) or unadulterated risks (only setbacks) in light of the circumstance. In nature, they may be degree perils (with specific, execution or quality issues), external threats, and various leveled risks or just adventure the official’s threats. At the point when the dangers have been recognized and everything is talked about the time has come to concentrate on the various methodologies’ associations do to help forestall different issues. Some of them can be:
– Avoiding Major Risks: It is hard to destroy hazards be that as it may; this methodology is planned to dispose of whatever number dangers as could be expected under the circumstances so as to maintain a strategic distance from outcomes.
– Reduction of Risks: Organizations can reduce the level of impact certain dangers can have on organizations and ventures. This might be accomplished through specific parts of plans and might be balanced on what they may not require.
– Risk Sharing: Due to legitimate obligation, a few results of a hazard might be shared among the distinctive venture’s donors and diverse colleagues, for instance outsiders.
– Retaining from Risks: This is unpredictable, every once in a while an association may embrace a hazard accepting that the hazard merits the esteemed understanding being made. Organizations as a rule remember that if a venture’s evaluated benefit is bigger than the expense of the potential misfortune.
It supposedly is useful for associations to have a Risk Management plan set up anyway it has disservices also. To make a hazard the executives plan, it is essential that there is sufficient required information and research known to help order whether it is a hazard factor or not, and how it might affect the association. It might be costly to accumulate a lot of information and structure a forecast. It might likewise not go to design and might be problematic and mistaken.
Furthermore, the utilization of this information may be seen uniquely in contrast to alternate points of view. Thus, settling on basic leadership procedures may have various results if various pointers are not considered in complex circumstances, prompting startling outcomes. Peril the board incorporates complex considers far as supervising risks. Without the modified instrument, each and every estimation concerning risks ends up problematic. Despite whether the ambiguity is out of hardship, by then people need to cover it inside the orchestrated size of mishaps of the cutoff points and even the idea into unnecessary security limits. Risk the board puts aside a long exertion to gather information as for key plans. It has comprehensive standards that are directed and recognized by the cash related characteristics. It matches with a hard understanding without progressing learning without compensation of the fundamental measure of data.
Absence of examining capability and time can likewise cause limits and confinements. PC programming applications have been progressed to help move scholars to perceive what impact certain circumstances can have a negative/positive effect on the business. While this is exorbitant, it likewise requires prepared proficient who have been prepared analysists effectively and have information to comprehend the exact outcomes.
There might be a misguided feeling of consistent quality, for instance with a hazard the executives plan set up, an association may have a sense of security and may go out on a limb and not understand that they may have various intricacies and may not go easily, which makes disappointment comprehend the aggregate dangers included. Managing the risks gives the pointless activity to compensate for the errands. It incites the endeavors that react to improve the advantages in the association. It is spent on the inventive work of the assigned issues that hold to ensure adventure the officials. These potential threats are to be maintained up carefully in control to make and evaporate from the market. This use diminishes the level of risk and generally fabricates the direction over it. Any kind of technique will have its own repressions and points of interest of endeavor chance organization. Thusly to develop an effective peril, the board one needs to focus on the mitigated fundamental plans of threats that are suitable on the challenging individuals. It is to perceive the cutoff of the entire organization to overcome pending hazards. Risk the official’s transforms into the critical circumstance when the affiliation has concentrated on results isolated from potential perils, damages, and vulnerabilities.
People associated with the Risk Management group are generally part of the Management Team. It includes:
– Senior Management: Senior organization, under the standard of due thought and extraordinary commitment must ensure that the essential resources are effectively applied to help develop the limits expected to help accomplish the objectives. They ought to in like manner assess and combine eventual outcomes of the peril examination activity into the essential initiative procedure. A convincing threat the administrators’ program that assesses and mitigates IT- related urgent requires the assistance and consideration of senior organization.
– Chief Information Officer: The CIO is subject for the association’s IT organizing, arranging, and execution including its information security fragments. Decisions made in these domains should be established on an incredible risk the board program.
– System and Information Owners: The structure and information owners are liable for ensuring that fitting controls are set up to address uprightness, protection, and openness of the IT systems and data they guarantee. Consistently the system and information owners are at risk for changes to their IT structures. Thusly, they generally need to help and endorse changes to their IT systems (e.g., structure improvement, huge changes to the item and gear). The structure and information owners ought to therefore fathom their activity in the risk the official’s strategy and totally support this method.
– Business and Functional Managers: The chiefs obligated for business undertakings and IT procurement strategy must play a working activity in the risk the board system. These chiefs are the individuals with the power and commitment in regards to choosing the tradeoff decisions fundamental to mission accomplishment. Their commitment in the danger the board system engages the achievement of authentic security for the IT structures, which, at whatever point regulated properly, will give vital practicality with an inconsequential utilization of benefits.
– ISSO: IT security program chiefs and PC security authorities are careful for their affiliations’ security programs, including peril the administrators. Thusly, they expect the principle work in exhibiting a fitting, composed framework to help perceive, survey, and limit threats to the IT systems that help their affiliations’ missions. ISSOs furthermore go about as huge masters in favor of senior the board to ensure that this activity occurs on an advancing reason.
– IT Security Practitioners: IT security experts (e.g., arrange, structure, application, and database administrators; PC specialists; security inspectors; security counsels) are liable for genuine utilization of security necessities in their IT systems. As changes occur in the present IT structure condition (e.g., improvement in framework organize, changes to the current
structure and definitive plans, introduction of advancements), the IT security authorities must assistance or use the peril the boarding strategy to perceive and assess new potential threats and execute new security controls true to form to shield their IT systems.
– Security Awareness Trainers: The affiliation’s workforce is the customers of the IT systems. The use of the IT systems and data according to an affiliation’s approaches, standards, and rules of lead is fundamental to mitigating dangers and verifying the affiliation’s IT resources. To constrain peril to the IT structures, it is essential that system and application customers be given with security care getting ready. As such, the IT security mentors or security/point specialists must fathom the risk the boarding strategy so they can make legitimate getting ready materials and join peril evaluation into planning undertakings to teach the end customers.
In end chance administration methodologies to any business relationship with or without facing risks. A convincing peril the board plan should have early and mighty distinctive verification of threats through incorporation and participation of appropriate accomplices. Peril the administrators depicts affiliation decisions on how they deal or will stand up to various risks if they occur. It moreover chooses different ways and measures to control those threats and offering attestation to the affiliation that it can make and realize an effective organization plan to confine or foresee loses occasion. A not too bad risk the officials plan should state clearly procedures frameworks to be used to see and go facing perils and vulnerabilities facing the association and offer possible response for the issues.
Analysis of Risk Management Techniques
Preparing for the worst is essential to running a successful food business. Before anyone can open the doors to a new business, it is imperative to reduce the likelihood of a serious accident or a liability lawsuit by conducting a restaurant risk analysis. A comprehensive risk management plan can reduce the likelihood of these risks because every business endeavor comes with some element of risk. Thus, the ability to manage these risks, will not only affect the company’s profitability, but it could also mean the difference between staying in a business or not. As such, we will implement the techniques listed below to manage the risks identified.
Employees are the heart of any business, so protecting them from harm in the work place should be top priority. Also, since employees handle day-to-day operations, they can often help avert potentially disastrous situations – if they have the proper training. Some of the trainings include: work safety – these training sessions include proper lifting for heavy equipment and mandating footwear and attire that minimizes risks of injuries, safety procedures – walk customers through the food business’s safety protocols, such as how to properly handle, store, and prepare food, and also what to do in case of a fire or robbery, and lastly customer service.
To reduce the odds of property damage or someone getting hurt on the property, we will ensure that: the kitchen is kept clean, clean the clutter – keeping it clear of obstacles will reduce the chance of a trip-and-fall hazard, and install indoor and outdoor railings.
We heavily rely on all the restaurant’s equipment to store and prepare food. Without proper maintenance, the equipment could break down, potentially putting both the business and customers at risk. We will ensure to regularly check the refrigeration units, heating equipment, and consider to have a commercial property insurance – which this policy can help to pay or repair or replace any equipment that has been stolen, vandalized or experience a kitchen fire.
Running a business in the digital age presents its own sets of risks. For instance, if we store customer information, such as credit card numbers on a computer, we are at risk of cyber theft. Nevertheless, we can use technology to help safeguard our business against such risks. We will use anti-virus software – to keep malware, phishing, and viruses at bay with appropriate firewalls and software, password protection for Wi-Fi network – offering internet access is a good way to get customers attracted to our business, but we endeavor to keep the network safe too, thus we will only use secure networks and only provide Wi-Fi password to paying customers, and lastly, security cameras – although security cameras aren’t exactly cutting-edge technology, they however still help to detect and deter criminal activity and theft. If the system is hacked and sensitive information like customer credit card numbers stolen, cyber liability insurance can help with the cost of customer notification and credit monitoring.
It is necessary for all employees to familiarize themselves with health and safety codes, so that the establishment is not caught off guard by a routine inspection form a health inspector. Some health and safety codes include: employee hygiene – employees will always wash their hands and wear disposable gloves before handling food, and also to wear hairnets when around food, health inspections – our business will definitely have to pass health inspection conducted by a local personnel before it can be open to the public and we will also have our restaurant inspected twice a year, and also, facilities and surfaces – persons in charge of cleaning can only use certain detergents to clean equipment that comes in contact with the food. Not only will adhering to safety codes help prevent our restaurant from being charged with violations, it will also create safer conditions for employees and customers and reduce our chances of getting sued.
Food allergies affect millions of persons worldwide, and a restaurant business operator, it is our duty to be aware of all different food allergies and diets. Thus we will update both our food and dietary disclosures. Disclosing this information will help us to avoid a costly lawsuit.
Despite employing the best restaurant risk management strategies, there may be times when an unpreceded accident may occur such as a fire or staff injuries. For such situations, you should be armed with insurance that provides a complete cover for the business as well as for our staff. The workers in this industry are more susceptible to workplace injuries than in any other sector. Hence, providing insurance will ensure better work environment and also reduce the chances of our business falling into any legal troubles.
Connections Between Generation Games and Risk Management
There are thousands kind of risks in the world of business and finance, risk management is a one term of them about the logical to establish the definition of the context, it consists of a wide range of sources including also financial threats from the business and legal authorities. The capacity to comprehend and evaluate chance, is absolutely critical. This is something that can be utilized to characterize the exact ways that hazard ought to be able to be overseen and on full scale level. An assortment of risks related definitions are applied to development ventures, and no standard definitions or systems existing for what comprises a hazard evaluation. In the development business, risk management is frequently linked to the closest potential or genuine treats or chances that impact the goals of an undertaking during development, charging, or at time of utilization. It is significant that the risk management must be comprehended for this situation, as there are numerous potential exposure regions that the company running the event should manage. Generally, you would consider dangers inferring a negative result to a business undertaking or programming item, anyway this isn’t supposed to be the situation. Risk management can likewise pass on potential chances to an undertaking process and decision-making to events. In this essay I will inform and clarify about two regions of event the executives frequently incorporated into the risks’ management territory that are considered in details: legitimate consistence and agreement the executives.
Bowdin and the others declared that risk management is “the process of identification, carrying out the threats of the business to deal with them”. Furthermore, it is a framework which expects to recognize and measure all dangers to which the business or task is uncovered with the goal that a cognizant choice can be taken on the best way to deal with the dangers, Bowdin also stated that exaggeration of the event by showcasing or over promotion is another kind of risk. Every one of these dangers may bring about security and budgetary issues at the occasion. Risking the board can be characterized as the way toward recognizing these issues, surveying them and managing them. Risk management is considered to be defined as the not fulfilling its objective when holding an event/festival. Risks are probably going to happen whether to decides it brings pros and cons. Moreover, it is crucial to specify the good risk management strategies, when the operational companies who run the event can reduce. The initial phase in making the efficient risk management upon executive’s framework is to comprehend the subjective differentiations among the kinds of dangers that associations face. Events’ risks from any class can be deadly to an organization’s methodology and even to its endurance (Kaplan, Robert S.& Mikes A. ,2012).
First of all, so far on the risk management we have learnt, to the real experiences in Generation Games, we considered it to be a free and local community plus tourists events, being sponsored by local stores in Lillehammer, creating an active atmostphere for the people in Lillehammer as well as tourists can participate in sports. Considering the event risks are ways to get people not harmed from all the activities, making the strategies for the risk management also means that protecting people, guaranteeing people with safety and fun activities. Then, the risks could be classified to different types, matching to each sports and the whole event, when you can identify the risks before holding an event, it also helps to encourage people to play especially kids. Afterwards, when you have recognized dangers, we can altogether examine the potential impacts that each will have on our plans on making the sports enough safe and available to people’s satisfaction, your organization and other current undertakings. Controlling the risks, finding a solution so that it is high probability that people will join the event. Presenting our experiences in the Generation Games: when we held the Dart sport, we have to know that the risks about playing Dart are getting hurts when others are throwing darts. Maybe the best method of the event risk management is to roll out little improvements to singular things on a continuous premise, as the progressions has happened, and afterward to complete a progressively extensive survey of the archive on Generation Games a less continual, yet at the same time standard timetable. The 3 extensive surveys that the Dart groups have made would incorporate returning to the means we canvassed in the prior pieces of this arrangement for plans on the days the event will occur, conceptualizing pretty much every one of the threats your event is dependent upon, adding new things to the rundown, and positioning them by significance. At that point do likewise with your current risks noticed, we made an idea, choosing the venue of our sports to be at the end of the spot for all the other sports, it stays as an area where people can freely throw the darts without hurting anyone else. Moreover, we also made baloons for throwing for kids so we are making sure that we made a line so that they dont stand too closed to it and hear the sounds when balloons are all being blown up, that might scare kids. That’s our strategy and how we monitoring our risks, we have to conclude every risk that could be occurred when the event is taking place. Noticing people for the risks we have specify before the event also help people who join feel more comfortable and secure.
This essay has presented the connections between the risks management strategies and how its impacts could reduce the risks on Generation Games. There are no difficulties and distincts of how we manage our risk management strategies, the main keys are to devote the right plans, to identify the accurate risks that the event we are holding have to face against, and also taking surveys to get responses and experiences from the communities who have participated in the event. The majority of the risks will less likelihood to happen when we organize our steps like a operational system, that will create a huge impacts on the performance and purposes of the event as well as the achievement after the event ends. In any case, it is reasonable and great practice to guarantee that risks shaped indispensable pieces of the executives and getting ready for the entire organization and its crews’ plans. These factors have solidly explained about the influential causes risk management to events, specially in the Generation Games event, it helped a lot in the use of group works to solve all the critical problems.
Connections Between Business Continuity Management and Risk Management
In the present generation all company and organisations that have an value in society for practicing its major activities in a profitable or non-profitable manner should have an ability to confront in the difficult situations to preserve the position and maintain its activities. Moreover, building a response to negative events from day to day basis, from the expected to the unanticipated has become a heart of organisations and governments around the globe. This essay will discuss on risk management and business continuity management in a distinctive perspective, applying theories and practices relating with organisational examples and finally the differences and similarities.
Undertaking these risks require an unified and holistic framework with the ability to classify appropriate responses to the circumstances. For further organisations, this means complying with an Enterprise risk management model. ERM approaches to evaluate all threats inclusive of strategic, financial, market, personnel, technology, legal, geopolitical, environment and compliance that would sceptically effect an organisation.
For having an efficient management and resisting issues, this guides into two distinctive roles recognised as Business continuity management and risk management.
Business continuity management is an integrated management process that analysis the critical impacts that intimidates an organisation and contributes a structure for maintaining a flexible and effective response that secures the concerns of its stakeholders, position, brand and potential activities ( Elliott, Swartz and Herbane, 2010). As a matter of fact, BCM supports the possibility of an entity under coercion. According to (. gov ) to implement the business continuity in the organisation, it is vital to understand the key products and services, the critical functions and resources required to deliver, the risk of these critical functions and finally the process to maintain these critical functions in an unpredictable incident to have access to premises and essential utilities.
In response of BCM process there is an crucial concern with the growth and application of pertinent business continuity plans and preparation to secure the management of an incident for the continuity and recovery of critical activities that reinforce general products and services. In this manner the BCM plans have a distinctive number of plans and content which vary from disparate organisations and should reflect the culture and structure of the organisation and the intricacy of its critical functions. Complying with these factors, it is fundamental to adopt a separate incident management, business continuity and business recovery plans which cover a particular segment of the organisation.
Following a preceding legitimate cyber-attack case of business continuity from Talk Talk a telecommunication company in the UK, discussing the contempt of computers forming issues into most sectors of the businesses over the last two decades. Similarly, it mentioned that majority of organisations does not have an business continuity planning and suffer from long term issues in its operations. The former CEO Baroness Harding of talk talk provided a essential keynote at the Info Security Europe event on 2018, explaining the cyber-attack (hack) on the telecom company 2 years ago. This attack had triggered the Talk Talk technical team to be cautious and sure if the issues was resolved to be back on its daily operations.
This case had an outcome for Talk Talk to transform their activities with a business continuity management plan, whereby the non-technical business leaders participating in technical issues that are essential to deliver business satisfaction.
Recent activities around the globe have seen risks in higher circumstances. These circumstances include terrorism, weather conditions and financial issues globally. This links with higher number of risks confronting the society and commerce in its daily operations. In a general overview, all organisations have projects, portfolios, and programmes that are genetically risky in terms of its mission and vision. This is because they are based on expectations, performed by people and matter the external influences. Risks can distress the goals of an organisations achievement either positively or negatively, in a further definition risks consist of an equal opportunities and threats, which are believed to be managed over the risk management process.
In addition, Risk management is a set of exercises to safeguard the most appropriate result after the event or attain the best predictable consequences. by considering this approach risk management operations will. Make an enormous participation to the accomplishment of an organisation with enclosing in its strategic, tactic, operations and compliance activities. Mentioning a crucial consideration for risk management is to minimise the scope of potential outcomes, proceeding with an example demonstrating by ( ) Volkswagen lost its investment opportunity because it consumed more playing within the markets than manufacturing cars.
In this example overviewed, risk management can play a major role in risk assessment and serving the organisation to achieve a particular profit margin for a trading occasion, whereby the organisation will manage measures that could derive a possibility in lower predictable profit line along with sustaining the profit within a convinced collection. Risk management tools and technique such as hedging exchange rates can help worthy investments in a profit volatility.
According to multiple researches, business continuity and risk management are acknowledged as distinctive functions, subsets of each other or some similarities which reside. For instance the prevention, preparedness, response and recovery approach to risk management or PPRR is conferred as risk management. Nonetheless, when all roles are combined they put results together, which conclude presenting a business continuity plan. Certainly, they have an relevant difference in applying the risk identification and business impact analysis to form a long-term business continuity.
In this manner, the term business continuity had emerged on acknowledgement after risk management. Risk management can be compiled as evade, pacify, deliver or accepting risk. Business continuity harmonizes to evade, pacify, deliver risk more than pacifying or accepting it. In this anticipation, it is viewed as a subset of risk management. However, there is a counter controversy that risk management is not limited to protect an organisation as a whole, it is mainly possible in a case of individual plan and transactions. In a organisation perspective the risk management examples are credit check on borrowers, and exchange rate hedging. In general every check and hedge are parts of risk management process, but it is implausible to influence the continuity of the organisation.
Risk Management Approach Used in Non-Financial Corporations
All over the world, companies have to face new challenges, opportunities and risks because of globalization, intense competition, new technology improvement and market structures changes.
As financial institutions before, non-financial corporations have just realized that risk management is becoming essential and be part of the good financial health of firms. Non-financial corporations core business involves the production of goods and services to sell them on the market, it doesn’t deal with financial processes like financial assets or liabilities. For instance, non-financial institutions could be retailers, manufacturers, business service providers. These companies are threaten by a wide range of strategic, business, credit, market and operational risks and they try to deal with them thanks to governance structures, risk measurement, management processes and risk transfer strategies. These risks have an influence on the companies health. In fact, they can generate financial loss and damage a company’s brand. But, risk management improve financial performance through identification, anticipation, reporting, management and control. Moreover, when significant firms confront economic issues due to risks, the whole economy can be affects. For instance, GDP may decrease, price stability may be alter and the rate of unemployment may increase.
In this essay we will describe what risks companies have to deal with? Moreover, what kind of process they set up to manage them ? We will exemplified these questions with the Microsoft’s case study.
First of all, when companies want to deal with risks management, they have to define these risks to anticipate and control them. Authors have different point of views regarding their repartition.
Hopkin argue that risks are divided into three categories. The first one is hazard (or pure) risks, this category has always negative outcomes and have to be mitigate by the company with adequate security procedures such as segregation of financial duties. The second category is control (or uncertainty) risks, for the author, companies have an aversion for them and they have to manage them. For instance, when companies make projects, there is an uncertainty about the delivery of the project on time. The last category of risks is opportunity (or speculative) risks. They are taken with the intention of obtaining positive outcomes but this is not assured. Hopkin (2014) argues that enterprises have to embrace these risks. In opposite, Lam recognize seven major types of risks. Strategic risk, business risk, market risk, credit risk, liquidity risk, operational risk, and compliance risk. In my opinion, the business risk classification of Wolke (2017) is the more detailed and consistent, he classifies them into two large categories : financial risks and performance risks. Then, he divides them into five subcategories depending on their type. They are many debates about risks repartition, but the most important issue is that an organization adopt the risk classification system that is most suitable for its own circumstances.
Secondly, companies follow some processes and use tools in order to deal with risks. There are several risk management standards and frameworks but they all have similarities. Lam (2014) argues that to face risks, companies firstly have to do an identification and assessment of them. They can use a risk mapping which join risk severity and frequency. Risk’s position on the map indicate if the risk is well-managed, managed or poor managed to companies. Then, quantification and reporting of risks is a crucial step too. Finally, they have to manage and control these risks depending on the company’s objectives and the type of risk. Hopkin (2014) is in accordance with Lam (2014) regarding the Risk Management Process, he follows the same step: risk assessment, risk reporting, risk treatment, residual risk reporting and monitoring. Organizations have to establish themselves their own method for risk analysis. Actually, individualized risk management method is more relevant and useful for companies (Hori, Sakurai, Syalim, 2009). Microsoft Corporation has to deal with risks in a changing landscape of attacks and exposures. Firstly, Scott Lange, the former director of risk management, identified a dozen broad categories of risks such as financial, reputational, technological… in order to create a complete inventory of the organization’s risk. Secondly, they started using risk maps developed by the senior management Mr. Lange and Jean-Francois Heitz the Microsoft’s treasurer. This risk map allows Microsoft to know which risk could be a threat and has to be managed as a priority. Moreover, an other tool is used to help the company facing risks, it is the risk grid which is very easy to use and to understand by the employees. It matches elements of the risk management process as the first column and the other columns indicated the current process for managing that risk, the ideal process, and what actions are required to move toward the goal. Then, the firm has created an Intranet to improve the communication about risk between the employees, this tool permits them to save time and be more connected to the risk management staff. Based on Microsoft’s presentation (2019), nowadays the company manages risks thanks to the Information Risk Management Council which follows a Risk Decision Matrix. In accordance to Hori, Sakurai and Syalim (2009) this matrix identifies which stakeholder is the most appropriate to make the decision and to manage the risk depending on his category and level.
The research philosophy represents the way in which data will be collected, analyzed and used into the research. I choose to use positivism because it highlights objective knowledge and supports hard and measurable data that match with my quantitative approach.
Moreover, there are three approaches : deduction, induction and abduction. The deduction goes from theories to data, in the opposite the induction goes from data to theories and the abduction try to collect enough information to formulate solid enough theories. We have chosen the deductive approach because we based our analysis on theories through the desktop research in order to collect data.
There are three major methods to do research : quantitative, qualitative and mixed method. A quantitative study is realized as a survey or a questionnaire which give us quantifiable results in the form of numbers, variables, objects. Quantitative analysis is used to make comparisons, measure, test hypotheses. On the contrary, the qualitative study’s goal is to understand and analyze the behavior and the characteristics of a group of people which is a representative’s sample of the studied’s population. The collect data takes the form of words such as descriptions, opinions, feelings from interview transcript, field notes or audiovisual material (Walliman, 2011). The mixed method combines these two kind of research. In my opinion, it is more suitable for this topic to use a quantitative research method in order to collect data and evaluate the efficiency of the risk management process into Microsoft.
We can collect two types of datas : primary data and secondary data. Primary data is gather by the researcher from his own researches and experiments. In the opposite, secondary data already exist and has been collected by researchers through other purpose and is used for another research question. In my opinion, secondary data is the most appropriate for my essay. This kind of data is very useful because it is easily accessible and free of charge. I exploited academic researches and textbooks in order to do my essay. Finally, I did a desktop research which gather data from existing resources.
Monte Carlo Simulation in Financial Risk Management
Monte Carlo simulation is a method used to estimate risk involved in the occurrence of an event. Ideally one will be presented with several alternatives to perform certain task, and by the use of Monte Carlo simulation informed decision can be made choosing the correct or the most convenient course of actions. The mechanism of Monte Carl simulation is a system model will be generated multiple time based on probability models that best suite the key factors. Each time the input value will be changed, on random basis. The model is mostly appropriate on trying to reach a rounded opinion on decision problems like a company profit that is derived from set of factors as associated costs, advertisement and market share. The idea of this simulation tool is to treat basic variables with probabilistic nature instead of the deterministic approach that may misrepresent the real life. Those variables will be assigned a random number that will differ on each run. On performing many runs, probability distributions can fitted on the outcome to study and analysis it. The simulation process helps the decision maker to enumerate various instances where the involved factors may be interrelate. This paper will look into the literature and how scholars made use of simulation tools, in general and Monte Carlo simulation in specific, to help on accessing, mitigating and even reducing the financial risks.
On the paper published by Bandaly, and his colleagues (2014) on financial risk management and how it is considered as an important tool for visualizing and recognizing the real nature and integrative scope of supply chain management; the authors defined supply chain risk management (SCRM) is an evolving discipline in which holistic solutions across the various sectors typically do not harmonize. Since organizational risk management encompasses many areas, such as sourcing, accounting, sales and advertising, risks mitigation strategies in the supply chain, and as it needs to address a lot of the involved fields, Bandaly research aims to reduce the gap between these fields by creating an integrated SCRM methodology utilizing financial instruments and operative processes. Authors investigated an aluminum supply chain, a manufacturer and a retailer. Aluminum cost volatility and speculation about the product market were related to the supply chain. In order to manage the risk along the supply chain, a stochastic optimization framework is created.
Using this optimization framework as a guide, Bandaly and his colleagues compared the performance of an adaptive risk management system with the sequences of a design, under which decisions on financial risk management are taken after decisions on operational risk management are finalized. Through modeling on a simulated basis and using simulations and statistical analyses, they evaluate the output of both models in order to minimize the total expected supply chain opportunity cost. They look at supply chain performance based on three considerations, at different levels: risk tolerance, uncertainty in demand and fluctuations in aluminum prices, the commodity of study. In most instances, they find that their findings on a unified system beats a series model. While the findings often show that its reliability is increased by the conventional supply chain, a criterion is possible that does not require the need of higher levels of risk. Of various business situations evaluated, management lessons are given from past experts opinions on how to build a better holistic approach.
In the fifth chapter of his book “Supply chain risk management”, Olson (2014) described particularly how nature is uncertain; hence, whatever model they are trying to build based on deterministic approach may be unrealistic. So every model that they build incorporates some level of risk due uncertainty. In addition, the more they are aware of the associated risk in their models and accounting for it, the more accurate their work will be. Risk in supply chain models can arise from unpredicted weather conditions like a natural disaster that can hinder certain logistical operation. Political unrest, economic situations, and major industrial accidents are other factors that can affect well-established supply chain models. Mostly, to account for these risks, they have to use probability to change the deterministic nature of their models. This mandates the use of Monte Carlo simulation in supply chain professionals’ work.
One of the topics discussed by Oslon (2014) is the idea of an inventory. He began with a brief description of what inventory can be; which was defined as, the resources that are stored that is exceeding current usage to be used in the future. Inventory is important because demand and supply are not always matching. The probability of a stock out event decreases with a higher inventory level. Stocking out is not favorable because its cost is not just represented in lost sales. It can lead to customers’ dissatisfaction and for them to start looking after alternative products, a matter that can put sales mission under unfavorable risk. On the other hand, building inventory means more cost and tied up capital, this is a risk on its own, because now the chances of bankruptcy, given that sales isn’t meeting their targets, is higher due to the large amount of money invested in keeping higher inventory levels. The problem is like a balancing problem that should be maintained to a certain level with the introduced variability. Inventory costs can be broken down, for further analysis, into holding costs, ordering cost, shortage cost, and purchasing cost. Holding cost is the cost associated with keeping commodities in my inventory and special treatment expenses that should be accounted for, like refrigeration. Ordering cost represented in the administrative work and expenses associated with requesting an order from the suppliers. Shortage cost, is represented in the amount of back order that can be accumulated due to inability to satisfy all the demand in a given period, or worse it can be the cost of lost sales, which will typically be identified on qualitative basis by sales experts. Finally, purchasing cost is the cost will be paid to the suppliers to pay for certain materials. So, Monte Carlo simulation can be used to quantify the risk involved here with the four different parameters. The trade off in the model will be to reach the optimal level minimizing the expected cost and the probability of stocking out.
The built hybrid SCRM system describes by Bandaly showed how the supply chain risk management mechanism involving the cooperation of supply chain stakeholders and the coordination of these members’ operational units. The system incorporates functional and financial risk management actions to reduce the expected total expense of a beer, the commodity of study, supply chain. The authors’ results show that the integrated model’s value efficiency is better than the sequential model as decisions are made separately by functional units, and it is more resilient as well, if exposed to evolving business environments. The results further illustrate the business environment where the unified design led to better results. A less volatile supply chain, for instance, can have some merit over a conservative supply chain while working with low demand volatility or low price volatility. The unified model is more convincing for conservative supply chains as the reduction in overall opportunity cost relative to the sequential template is important.
Nonetheless, a more dynamic supply chain can still leverage a hybrid model by increasing the opportunity cost for high price volatility events. The form of risk management approach used is relatable to how conservative the supply chain model and the volatility in request. When faced with increased demand volatility, the analyzed supply chain handled risks more using operative functions methods and less using financial tradeoffs. But since the supply chain is more aggressive or dynamic in nature, it uses organizational and financial instruments less to manage risk. The model has been improved by taking into account stochastic simulation lead times for null outputs and variations in the exchange rates in foreign currencies when a foreign supplier buys aluminum as per the stock market spot rates. In different organizational and financial context of risk management, the integrated supply chain risk management model can be further expanded. The design can include a large range of commodity items and several suppliers. The decisions incorporated can be formed as a dynamic process. Applying this approach, it may be more appropriate to use future or forward contracts rather than options.