Introduction to risk principles
Table of contents 1.0 Introduction 1 2.0 Statement of case 1 3.0 Identification and classification of risks 1 4.0 Risks analysis 2 5.0 Risks evaluation 4 Competition 4 Reputation 4 Stock turnover and financial leverage 5 Quality assurance 6 Performance of employees 6 Payment system interruption 7 Supplier and natural disaster 7 6.0 Risk register 7 7.0 Risk treatment 9 Risk treatment schedule 9 Risk treatment action plans 10 8.0 Recommendations 11 9.0 Conclusion 12 10. References 13
According to AS/NZS ISO 31000:2009, risk management consists of 6 components which are …show more content…
4.0 Risks analysis
After the classification of risks, the next stage is to analyze each of them. Based on HB 4360:2004, risk analysis is about providing a mechanism to decide whether these risks need to be treated and relevant cost-effective treatment strategies. Also, based on AS/NZS ISO 31000:2009, risk analysis needs to consider the source and cause of risks, their optimistic and pessimistic consequences and the likelihood of consequence occurrence. This report will use qualitative method, a risk matrix, to illustrate the level of potential results and the likelihood of the consequences.
Table 2 and 3 provide the detailed explanation for each level of likelihood and consequence respectively.
Table 2—Likelihood Scale
Table 3—Consequence Scale
Table 4 outlines a risk matrix which could be used to measure the magnitude of risks.
Table 4—Project Risk Matrix
After deciding the magnitude of risks based on Table 4, a risk treatment key (Table 5) is then important because it could provide different appropriate actions on different level of risks. For