CLASS EXERCISE

The Risk Register given below shows the expected risks for a Shoe Manufacturing Industry based in Palapye, Botswana.

Level $0$ Level $1$ Level $2$ Level $3$ Risk Number Probability of occurrence Impact on monetary

Enterprise R

isk Internal Risks Market Probability of competition $1\mathrm{.}1\mathrm{.}10\mathrm{.}550000$

Decrease in demand $1\mathrm{.}1\mathrm{.}20\mathrm{.}350000$

Availability of raw materials $1\mathrm{.}1\mathrm{.}30\mathrm{.}265000$

Technology Technology availability $2\mathrm{.}1\mathrm{.}10\mathrm{.}3575000$

Technology limits $2\mathrm{.}1\mathrm{.}20\mathrm{.}1545000$

Unproven design $2\mathrm{.}1\mathrm{.}30\mathrm{.}236000$

Machinery issues $2\mathrm{.}1\mathrm{.}40\mathrm{.}370000$

Production$/$processing Scheduled delays $3\mathrm{.}1\mathrm{.}10\mathrm{.}3520000$

Warranty exposures $3\mathrm{.}1\mathrm{.}20\mathrm{.}425000$

Performance $3\mathrm{.}1\mathrm{.}30\mathrm{.}2530000$

Human resources Shortage of labour $4\mathrm{.}1\mathrm{.}10\mathrm{.}470000$

Labour strikes $4\mathrm{.}1\mathrm{.}20\mathrm{.}3035000$

Subcontractor failures $4\mathrm{.}1\mathrm{.}30\mathrm{.}2040000$

disputes $4\mathrm{.}1\mathrm{.}40\mathrm{.}150000$

External Risks Financial Lack of funding $5\mathrm{.}1\mathrm{.}10\mathrm{.}5080000$

Estimating errors $5\mathrm{.}1\mathrm{.}20\mathrm{.}1010000$

Exchange rates $5\mathrm{.}1\mathrm{.}30\mathrm{.}4045000$

Natural disasters Floods $6\mathrm{.}1\mathrm{.}10\mathrm{.}2565000$

Fire outbreak $6\mathrm{.}1.30\mathrm{.}52100000$

REQUIRED:

Use the above information to;

i$.$ Prepare an appropriate Risk Matrix explicitly showing the three basic regions $(30$ marks$)$

ii$.$ Determine the appropriate Response to each risk