There are four steps in risk management: Risk identification , is the careful and systematic discovery of
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Question:
There are four steps in risk management:
- Risk identification, is the careful and systematic discovery of all risks that confront a household or an organization.
- Risk measurement. Each risk can be measured in three basic ways:
- Loss frequency
- Loss severity
- Variability
- Choice and use of alternative methods of treatment. Evaluate both the suitability and the cost of various methods of treating pure risks.
- Risk administration must be carried out in conjunction with each of the first three steps of risk management.
Action Items
- Read the following case and consider how the risk management process might be applied in a family situation.
- Travis and Ruth Jordan, a husband, and wife, have two children: Edward and Penny. Edward is 17 and will begin college as a full-time student in a few months. Penny is 13 and in the eighth grade. Travis is 42, and he is an executive for a chain of grocery stores. He earns $120,000 per year. Ruth, aged 39, works part-time for an orthodontist and earns about $15,000 per year.
- Then, in a document, write out the answers to these questions.
- Identify the risks the family is exposed to.
- Evaluate the identified risks for the probability and severity of the loss.
- Determine the alternatives for managing the risks identified.
- Select the most appropriate alternative for each risk identified.
Related Book For
Interplay The Process Of Interpersonal Communication
ISBN: 9780197501344
15th Edition
Authors: Ronald B. Adler, Lawrence B. Rosenfeld, Russell F. Proctor II
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