2. What is Risk ?
• Risk is any uncertain event or condition that
might affect your project.
• Not all risks are negative – there are some
opportunities
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3. How to deal with the risks
• Avoid
• Mitigate
• Transfer (Insurance / Off shoring)
• Accept
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4. Reactive Strategy
• Don’t worry, I’ll see what to do when it
comes
• I’m always lucky and nothing will happen
• Fire Fighting
• Chaos
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5. Why RM is necessary ?
• It protects from losses and keeps opportunities
open
• It is always better to strike a balance between
risks & rewards / opportunities
• Different organizations have different tolerances
for risks
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6. Why RM is necessary ?
• Avoiding risk means getting out of business
• Intelligent thinking makes some people more
confident to take risks
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7. Risk Types
• Static Risks (Fire, Storm, Accident..)
• Dynamic Risks (Stock Market, Gambling)
where the occurrence is either a loss or a
Profit
• Production Risks
• Marketing & Distribution Risks
• Financial Risks
• Personal Risks
• Environmental Risks
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9. Risk Management
• Risk is handled by different people in different
ways based on their preference and attitude
towards risk
• Each one has different risk tolerance
• Some people are “Reactive – when risk occurs”
and some “Proactive”
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10. Risk Management
• Risk Identification
• Risk Analysis – Occurrence, Impact,
Frequency, Timing
• Risk Assessment – Loss on occurrence,
Risk Exposure
• Risk Planning and Resolution – Approach,
Diff. steps
• Risk Monitoring – Impact and implications
• Risk Mitigation – How to meet the
challenges
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17. Risk Resolution
• Act on the trigger
• Execute the risk action plan
• Monitor the action plan
• Access the new risk scenario
• Control the risk exposure
Risk Exposure = Probability X Impact
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18. Expected Monitory Value - EMV
• What is Expected Monitory Value of your risk –
High Winds 35% $48 for
Replacement
Mudslide 5% $750 damage cost
Usable Winds 15% $800 saved as battery
cost
Truck Rental 10% $350 as last minute
Unavailable rental
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19. EMV
• 35 % X - 48 = - 16.80
• 5% X -750 = - 37.50
• 15% X 800 = + 120.00
• 10% X -350 = - 35.00
• Total EMV - - 30.70
• IF you add 30.70 into the budget then it should
be enough to account for these risks
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