Assigned Readings:
Chapter 7: Project Risk Identification Tools
Chapter 8: Project Risk Analysis and Identification
Initial Postings: Read and reflect on the assigned readings for the week. Then post what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding in each assigned textbook chapter.Your initial post should be based upon the assigned reading for the week, so the textbook should be a source listed in your reference section and cited within the body of the text. Other sources are not required but feel free to use them if they aid in your discussion.
Also, provide a graduate-level response to each of the following questions:
Background: HavenWood Interiors is a growing, family-owned business specializing in handcrafted furniture, with 48 employees and operations across two workshop facilities and one retail showroom. Over the past five years, the company has experienced steady growth, thanks to a rising demand for bespoke, sustainably made home furnishings.
However, with growth comes increased exposure to risk. Recent eventsincluding a break-in at the warehouse, a worker injury due to machinery malfunction, and a regional flood that delayed supplier shipmentshave prompted the leadership team to reconsider their risk management strategy. In particular, the CFO has suggested exploring comprehensive insurance coverage as a critical tool in protecting the companys operations, finances, and workforce. As the companys newly appointed Risk Manager, you have been tasked with preparing a portfolio for the next board meeting. Your job is to clearly explain:
- What insurance is and how it functions,
- How the proposed insurance policies will protect the business,
- The specific terms and clauses in the policies,
- And how insurance fits into the companys broader risk management frameworkincluding under conditions of extreme, unpredictable events.
Your portfolio must support the boards final decision to purchase the recommended policies and help establish long-term resilience for HavenWood Interiors.
Discussion Questions:
- How can the proposed insurance policies serve as both a risk mitigation strategy and a financial planning tool for HavenWood Interiors? In your response, consider the nature of the risks the company has recently faced (e.g., theft, injury, natural disasters) and how the cost of insurance (including premiums and deductibles) compares to the potential financial impact of those risks if left unmanaged.
- Which areas of HavenWoods operationsproduction, retail, logistics, or personnelare most vulnerable to risk, and how can specific types of insurance policies address those vulnerabilities? Provide examples of how Property & Casualty Insurance or Life & Health Insurance could be applied to mitigate risks in these different areas of the business.
- Why is it important for HavenWood to understand key contract terms such as premium, deductible, policy limit, exclusion, and indemnity when selecting insurance policies? Explain how misunderstanding or overlooking these terms could affect the companys ability to recover from a major loss or disruption.
[Your post must be substantive and demonstrate insight gained from the course material. Postings must be in the student’s own words – do not provide quotes!]
[Your initial post should be at least 450+ words and in APA format (including Times New Roman with font size 12 and double spaced). Post the actual body of your paper in the discussion thread then attach a Word version of the paper for APA review]
Assigned Reading (s):
Chapter 7: Project Risk Identification Tools
Chapter 8: Project Risk Analysis and Identification
Overview:
This weeks material delves deeper into the risk management process and examines best practices in risk identification. Risk identification occurs during the Planning process group and must be done iteratively throughout the project. Additionally, risk identification should not be done in a vacuum and should include input from subject matter experts, the project team, and stakeholders. Tools such as brainstorming, mind mapping, and the Delphi technique are examples of tools commonly used in risk identification. The Work Breakdown Structure (WBS) is a project management tool that allows the project manager and project team to take note of all of the activities involved in the project. The WBS paves the way for the development of the project schedule, allowing the project manager the opportunity to then identify possible scheduling risks. Outputs of the Risk Identification process include the risk register, which categorizes risks by category and severity, and the risk report, which is used to keep stakeholders informed of possible risks.
Once risks have been identified, they can then be evaluated and assessed. Risk assessment is also part of the Planning process group. Qualitative risk analysis involves assessing the probability and impact of identified risks. Probability and impact are rated on a numeric scale (for example 1-10). The probability score for each risk is then multiplied by its impact score to determine the risk score. It is important to note that qualitative risk analysis can be subjective in the sense that while one person may rate a risk at a five for impact, another person may consider it to be a seven. Quantitative risk analysis is used to mathematically assess risks and often includes statistical analysis or historical data. Examples of quantitative risk analysis include tornado diagramming and decision tree analysis. Simulation tools, such as Monte Carlo analysis are also used quantitatively assess risks. While quantitative risk analysis offers more precise analysis than qualitative assessment, it can be difficult for the average person to perform, and the quality of the assessment is only as good as the quality of the data input. Using tools such as risk mapping and the Risk Breakdown Structure (RBS), the Project Manager can rank risks to determine which risks need the greatest attention. Organizations that properly plan for risks typically have a greater capacity for risk.
Learning Objectives:
At the end of this unit of instruction, the student should be able to:
Create a list of tools and methodologies used for risk identification.
Discuss the methodology of grading risk and the separation of those which should be controlled and those which are not worth the effort.
Explain the concept of risk evaluation.
What are the major variables we use in the judgement of a risk and the determination of the remediation process.
Supplementary Readings:
Using decision models in the real world
Qualitative risk assessment
Insuring the project
Risk management at the portfolio level–what we can learn from insurance companies
What Is Property and Casualty Insurance? A Guide
Project risk analysis
Collaborative tools and techniques to build the project risk plan
Tools and techniques for risk management
Requirements: 450 + words
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