Risk Management Analysis

Risk Management Analysis
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1

Table of Contents
Question 1....................................................................................................................................................................................... 3
Introduction to problem............................................................................................................................................................ 3
Decision tree without EMV.......................................................................................................................................................3
EMV with decision tree and discussion....................................................................................................................................3
Final decision and discussion.....................................................................................................................................................3
Byes Rules problem....................................................................................................................................................................3
Byes rules outcomes and discussion..........................................................................................................................................3
Question 2....................................................................................................................................................................................... 3
Question 3....................................................................................................................................................................................... 4
Question 4....................................................................................................................................................................................... 4
Question 5....................................................................................................................................................................................... 5
Reference........................................................................................................................................................................................ 6
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Question 1
Introduction to problem
The main aim of this problem is to implement the risk analysis of ABC Company and
provide 10,000 special computers on the Government contract using the computer aided design.
By analyzing the risk management, they can perform three bid ways and then analyses the risk
for which they can follow the methods on expected monetary value and decision tree of the
company management system. The objective of this problem is to find the complex computers.
ABC's auction decision is complicated by ABC's current working on new ways of making
computers. If this process works successfully, computers can significantly reduce. However,
there are a few possibilities that the new process will be more expensive than the current
production process. Unfortunately, ABC actually cannot use the cost of the new process for
bidding the produce per computer and the same will be investigated.
Decision tree without EMV
The current production of the ABC process cost is 8000 dollarsper computer. The new
manufacturing process of risk cost and probability is 0.50, 0.20 and costs $ 5000 and $ 7,500.The
ADC is 100,000 of the auction for the total cost. Determining the value of anticipated guide to
probability 0.25, the cost of risk is detected at the risk from the chart above $ 8,500, $21,625
USD, 31,125 USD, 24,625, but this would not be appropriate.All these risks are not going to
occur all together, some of them may happen, some of them may not. The risks that occur will be
added to their EMV domain, and the risks of using the money from this pool. Therefore, all risks
identified in the above case will add value to $ 77,375 for the budget.
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EMV with decision tree and discussion
The use of anticipated currency appraisal formula can be used more frequently when
evaluating the risks associated with the dangerous legacy analysis. While there are many options
when used in their own customization analysis, there are important guidelines for determining
the best program when there is a perceived uncertainty of each option.ABC Company offers
10,000 specialized computers in the government contract. ABC Company has already made the
current production process at the potential auction for this contract. Now calculating the expected
cost value and finding the decision tree is denoted by finding the expected monetary value, they
can be used for the mango carol simulation software on the statistically techniques in ABC
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