Manager's Toolbox for Effective Risk Identification, Measurement & Analysis Techniques using EXCEL

Synopsis

Most managers are concerned with the challenge of making important decisions in a very volatile and complex business environment where a wrong decision could lead to disastrous results. Many managerial decisions on business and operational issues must rely on forecasting some uncertain variables. For example a company planning to develop a new product must be forecast customer demand so that it can produce and stock appropriate quantities to support sales. It must also forecast the risk of liabilities due to defects associated with those products to evaluate contingency financing needs and other risk mitigating techniques cost benefits balance. Managers need to understand how risk will influence their ability to deliver positive results and be successful in their organizations. Unfortunately, formal mathematical techniques are often not used due to a lack of knowledge and adequate training. As a result, companies are faced with problems created by inadequate forecasting or guesswork at every level of management.

This workshop provides managers with an understanding of tools and techniques necessary to create forecasts and develop simulations taking the guesswork out of the decision process. This workshop offers an overview of the essential tools of statistical analysis used in the quantitative analysis necessary for the effective assessment and management of risk. When properly mastered, these tools can be used in many practical work situations to support strategic and operational decision-making dramatically improving your performance as an effective Decision-maker.

Learning Objectives

After attending this session, you should be able to:

• Use Statistical Forecasting is a way to predict the future based on current or past data available
• Design Decision trees, fault trees and event trees as visual representations of the decision process with cause and effect links
• Gain insights into modeling random variables using Delphi or Monte Carlo to obtain a statistical breakdown of the possible outcomes based on polled expert assessment or on a simulation model
• Use Sensitivity Analysis to show how each variable affects the Desired Outcome
• Use System diagrams to understand how variable interact in complex systems
• And have applied these tools to real-world situations for effective risk decision-making.

Workshop Outline

• Undertstanding Decision-Making Processes
• An overview of Decision-Making Theory under Uncertainty
• Structuring the elements of a decision
• Using Descriptive Statistics to analyze risk issues
• Risk Forecasting Methods to predict future outcomes
  • Using Regression analysis to predict future outcomes
  • Introduction of probability and Development of Probability Distributions
  • Using Scatter plots to examine Relationships between random variables
  • Using Pareto analysis to identify the key risk issues
• Using Scenario Analysis to understand decision processes, identify variables and cause & effects relationships
  • Decisions Trees, Fault trees and event trees
  • Sensitivity Analysis
• Obtain a breakdown of the possible outcomes to ‘create’ a rpobability Distribution for decision-making
  • Delphi Method
  • Monte Carlo Simulation

Tool Box: A Case Study

• Risk Maturity Questionaire
• Example of Risk Management Framework and Policy
• ERM standard guides

Testimonials

“Very practical, very useful.. I can use the tools learned immediately in my work.” Technology Director, IT Company