Your task is to develop quantified Risk models of two Risks ofinterest to you. This is an academic
exercise and its purpose is to make you familiar with the processof quantified Risk modelling and
to show me you understand the theory and the practice.
a) Write up each Risk as a case study that explains the Risk indetail and describes the proposed
control measures.
b) Estimate/judge the values that could realistically be given tothe various parameters relevant to
modelling Risk and explain your reasoning to me. Don’t spendinordinate amounts of time
trying to justify any of the values that have to beestimated/judged in order to complete the task
(eg. does a death cost $3M or is it $3.2M? Is the Exposure 20 timesa year or 18?). However,
ensure that you do have justification for the values you use as Iam not interested in you simply
using a number with no justification.
c) Use your spreadsheet to estimate the position of the Risk line,using any necessary “reality
checks”. In other words, justify or even make a clear statement ofthe inadequacies of what
you have done and the need for further investigation. Estimate theRisk value.
d) Propose a possible control measure change/improvement andestimate the associated
implications for productivity, recurrent costs and/or capitalrequirements. I am well aware
these may based on judgement unless you have a close knowledge of aparticular case.
e) Provide me with an explanation of the anticipated effect of thisproposed control measure on
each of the parameters that determine Risk and use this to justifya reduction in the Risk value
estimated before this improved control measure is applied.
f) Use this to estimate the effect of the improved control measureon one or both (as appropriate)
of recurrent costs and payback period.