Question

XYZ corporation is an Indiana-based corporation and has 5 manufacturing plants. One of the corporation’s objectives is to have 10 manufacturing plants active with the next 5 years. The corporation employs a risk manager to minimum risks faced by the corporation. Collection of information from previous business transactions is crucial to forecasting. The risk manager is using data to analyze the risks for the future additions of manufacturing plants. Data collected was managed to ensure the data was accurate and relevant for manipulation in forecasting loss probability.
1. Do you think the risk manager should entirely depend on the data collection from existing manufacturing plants? Support your answer.

Answer 1

Answer:

No

Explanation:

Because the reason is that there are so many aspects that we should consider during risk management. So the information required comes from different sources, it can be competitor's financial statements to consider the difference on spending and efficiencies. Furthermore there are also some health and safety related issues, repair and maintenance costs analysis and other issues that the company risk manager would consider by relying on the information of manufacturing costs. So the recommendations for risk management is always reliance on wider sources of information.