Risk Assessment
Risk assessment is an important component of any management decision. When considering risk, managers rarely have perfect and complete information. There is an entire science of Risk Assessment, but for our purposes in this class, we will not be exploring this subject at that level.
Risk is measured by considering the potential amount of loss and the probability of the loss occurring. A manager will identify and analyze all the risks associated with a given option being considered. The next step is to use information available to assess the potential amount of loss if the decision does not result in the desired outcome. This is done for each risk associated for each option (Using a chart is a good way to quantify these options and risks). With this information, the manager will make a final decision on the best path to follow based upon the probability of the loss occurring weighed against the potential gain. Naturally, options that have a high potential loss and a high probability of failure are not the optimal decision unless the payoff is great and the loss can be absorbed if the action fails.
NOTE: Research is required for this paper. You must have a minimum of two sources neither of which can be Wikepedia.
MUST BE 3-5 PAGES NOT INLCUDING TITLE OR REFERENCE PAGE
Style Guidelines for the paper:
• Use a header on every page, including the title page.
• A title page with the title, author, class, class section, professor, and date should be on the title page, centered on the page. This title page does NOT count toward your 3-5 page requirement.
• Margins are 1 inch on all sides.
• All content is double-spaced and left-justified.
• Indent the first line of every paragraph five spaces or use the TAB key. Do not leave extra space between paragraphs.
• Use Times New Roman 12-point font.
• An abstract it not required; abstracts are NOT used in business reports or proposals.
• References should be on a separate page at the end of the paper.