Risk management is a logical process or approach that seeks to eliminate or at least minimize the level of risk associated with a business operation. Essentially, the process identifies any type of situation that could result in damage to any resource within the possession of the company, includin...
This holistic approach is sometimes calledenterprise risk managementbecause of its emphasis on understanding and managing risk across an organization. In addition to a focus on internal and external risk threats,enterprise risk management(ERM) emphasizes the importance of managingpositiverisks. These are ...
The article discusses strategic risk management (SRM). Topics addressed include a principle-based definition of SRM and its relevance to firms, the relationship between SRM and enterprise risk management (ERM), and a list of practices to further a company's SRM including assessment of ERM with ...
The bank’s lending criteria is based on underwriting guidelines which is a form of credit risk management. The bank may assess the level of risk based on the customer’s credit profile. The interest rates may be raised due to a higher risk loan. For example, home equity lines of credit...
Lean Project Management This methodology is all about avoiding waste, both of time and of resources. The main idea is to create more value for customers with fewer resources. When managing a project with this approach, the goal is similar to that of thelean enterpriseproduction principle. The ...
What Is a No Arbitrage Principle? No-arbitrageis a theoretical concept that states thatif markets are efficient, then there are no opportunities for risk-free profits (i.e.,arbitrage). Or, if mispricings do arise, they are immediately eliminated by market participants. ...
Accountability is the first principle, and it makes the person working on a specific task accountable for the success or failure of that task. Accountability puts more pressure on the assignee, the project manager, and the whole team. Thus, the requirements are met better, and the project man...
Create a main category hierarchy: Such a hierarchy ensures that the most valuable or profitable categories of goods are tracked most closely, minimizing the risk of losing business to stockouts. This is known as ABC analysis. Identify and move deadstock: Deadstock, also known as obsolete inventory...
Principle 1: the trade-off between risk and return - additional risk is needed to compensate for additional risks. Principle two: time of moneyvalue Today's dollar is more than a dollar in the future.valuable 。 Principle three: value should be considered in terms of cash rather than profit...
Risk mitigation is the process of planning for disasters and having a way to lessen negative impacts. Although the principle of risk mitigation is toprepare a business for all potential risks, a proper risk mitigation plan will weigh the impact of each risk and prioritize planning around that im...