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5. Leon is the risk manager for ABC, Inc. He has evaluated the following risks in terms of frequency and severity and asks your opinion
5. Leon is the risk manager for ABC, Inc. He has evaluated the following risks in terms of frequency and severity and asks your opinion as tho which risk management tool(s) to use and why:
probability/frequency | severity per occurrence | |
fire destroys factor | .0001 | $10,000,000 |
loss of property through employee-theft | .1 | $1,000 |
on the job employee disability | .01 | $1,500,000 |
loss due to misplaced inventory (computer) | .1 | $2,000 |
loss due to failure to reduce energy bill (lights off, air conditioner off on weekends) | .02 | $400 |
air conditioning unit failure (compressor) | .01 | $2,000 |
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