MN4460 Business Risk Management

Addresses the risk management issues that are inherent in business decisions. Students will learn to manage Schedule Risk, Supply Risk, Capacity (Readiness) Risk and Budget Risk; how to use metrics such as Value-At-Risk and Conditional Value-At-Risk to quantify exposure; how to combine risk sources; account for correlation, and use Bayesian Updating to modify risk estimates.  Monte Carlo Simulation will be used extensively, and will be contrasted with other approaches (e.g., Discounted Cash Flow). Descriptive approaches to the study of risk judgments such as prospect theory will be examined, so that students can better predict risk-related behavior of others.

Prerequisite

MN3041 and MN3442 or permission of instructor

Lecture Hours

4

Lab Hours

0

Course Learning Outcomes

• Know how and when to undertake a risk analysis as a part of a business decision.
• Apply risk management principles to the management of supply chain risk, schedule risk, capacity (readiness) risk, and budget risk.
• Be able to use Monte Carlo Simulation in a risk analysis.
• Know how judgmental biases and heuristics can affect risk-related behavior.
• Distinguish threats from risk. Know the goals of, and impediments to Enterprise Risk Management.