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…
Resource risk generally refers to people, outsourcing and money. Here, the main resource risk for Woolworths is from its supplier, which means the natural disaster could ruin crops and then finally impact its product provided. A detailed analysis for those risks would be covered in Risk Evaluation part.
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