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Risk Analysis, 2nd Edition by Terje Aven

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Chapter 12Risk analysis process for the entire enterprise

An enterprise performs a risk analysis to describe risk related to all of its activities. The analysis provides a basis for supporting decisions on investments and risk-reducing measures.

12.1 Planning

12.1.1 Problem definition

The risk picture to be established covers all aspects of c12-math-0001, using the notation introduced in Chapter 2. In order to obtain a structure for the risk picture, a distinction is made between various types of risk:

  • Financial and commercial risk, including risk related to foreign exchange rates, interest rate, credit and prices.
  • Operational risk, which includes risk associated with the unavailability of the production system and ICT security.
  • Health, environment and safety (HES).
  • Other risks, including risk associated with political decisions and reputation.

Furthermore, a distinction is made among the various parties involved:

  • The enterprise
  • Important partners, for example, suppliers, banks and financial services
  • Others, for example, the regulators and public opinion.

The main perspective for the risk analysis is the enterprise and its owners.

For the different types of risk, a series of more specific risk analyses are conducted, based on various data sources. For example, comprehensive statistics are available on the prices of the various products, accident events and so on.

12.1.2 Selection of ...

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