Risk Elimination

Remember the second Rule of Risk Management from Mehr and Hedges: "Donít risk a lot for a little"!

The risk policy measure of risk elimination has a practical potential mainly for risks in which the expected benefits do not justify acceptance of pertinent risks. This is because any risks are accepted by an enterprise only as far as benefits ensue from carrying the risks. Consequently, where the risk policy measure of risk elimination is implemented, the respective corporate operations that entail the risk(s) are not carried out any further, with the effective result that both the risk(s) and the benefits from carrying the risks are eliminated.

So the challenge for a Risk Manager is to identify these products where the companyís earning is not enough to carry the expectancy value T{R(x)i(mean)}.

 

Our Enterprise Risk Manager Software supports you by calculation of the expectancy value T{R(x)i(mean)} for each product and for each product line.

Risk Elimination

Risk Optimization