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RISK AND DECISIONS oleh : Rizki Rahmayanti (09111840000121) - Coggle…
RISK AND DECISIONS
oleh : Rizki Rahmayanti
(09111840000121)
DEFINITION
DECISION MAKING
process of making choice or selecting one option among the available and known alternatives
COMPONENTS
Decision environment
the collection of information, alternatives, values, and preferences
Quantity of information
human mind process limited data, if more processing is biased towards first part
Decision stream
out of or on the basis of many parallel posssible decision
RISK MANAGEMENT
An evaluation of potential risks can shows at early stage whether or not a proposal is worth pursuing
Risk management means identifying potential risks so that it can be managed on ongoing basis
CONCEPTS OF DECISION MAKING
INFORMATION
this is knowledge about decision, its effects, alternatives, and probabilities of alternatives
ALTERNATIVES
diff. possibilities
CRITERIA
criteria of alternatives
STRATEGIES OF DECISION MAKING
OPTIMIZING
strategy of choosing best possible soon
SATISFICING
choosing staisfactory and sufficient alternatives
MAXIMAX
1) selecting alternative based on their maximum payoff, 2) optimistic, 3) for risk takers, not cosidering loss
MAXIMIN
maximize the minimum
PROCEDURES
Identify decision to make and goals
Rate each alternatives
Get facts
Rate risk of each alternaties
Develops alternatives
Make decision
RISK APPETITE AND TOLERANCE
RISK APPETITE
Willingness and commitment to take a risk
RISK TOLERANCE
boundaries within which a organization has the capacity and capability to take a risk
RISK MANAGEMENT FRAMEWORK
IDENTIFICATION
Key risk symptoms
assumptions
external sources
ICQ analysis
QUALIFICATION
Effects
likelihood
Hideability
RESPONSE CONTROL
Opportunities and threats
Corrective action
Contingency and reserves