Having identified and evaluated risk, the next step is to decide how to respond to the risk. Describe risk control and clearly distinguish between the three possible responses to business risks?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Having identified and evaluated risk, the next step is to decide how to respond to the risk.
Describe risk control and clearly distinguish between the three possible responses to business risks?
Risk management refers to the process of controlling and managing the risk through its assessment, evaluation, and measurement and then implying the techniques that will make the risk go away.
Risk control refers to the process of applying the techniques to eliminate the risk evaluated. This refers to the process of implementing the various measures that will eliminate or set-off the risk so that there no or minimum chances of errors.
Three possible responses to the business risks can be:
1. Avoid: This is the situation where the risk is avoided by taking another approach or taking the other way so as to not face the risk.
2. Reduce: This is the approach where the business risks are worked upon and they are minimized to a certain level such that they do not affect the business.
3. Transfer: This refers to the approach where the risk is transferred or shifted to some third participant that will bear the risk or it can be said the risk is allocated to some other element.
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