optimizing uncertainty in complex industry environment
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Aradhana PandeySaumya Triapthi
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Pay For Mistake :-Current crisis has imposed organization to improve their effectiveness of risk management. It is a time when organization cannot adopt “pay for mistake” , which is commonly adopted by most of the organizations in golden days of Economy.
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Negative Outcome Approach:-The existing methods use the probability of a negative outcome to represent risk. Current representation of risk covers only one subcomponent of risk (i.e., the probability of a negative outcome) and leaves out another important subcomponent (i.e., the level of uncertainty concerning whether the outcome will be positive or negative).
Generic Solutions of existing Methods:-How to estimate the probability of a threat’s occurrence and the overall ISS risk, existing methods only provide general suggestions.
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Events can be represented in both forms either positive or negative. Events with positive impact reflects opportunity & events with negative impact represents risk. This opportunity and risk can be framed into gain frame & loss frame. Decision makers base their verdict depending upon the frames and accordingly they select appropriate controls for risk avoidance and its mitigation .
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But, variance in actual outcome from expected outcome of an event can create a new set of challenges for the organization. In this project , we are attempting to propose a model that will optimize and reduce the Uncertainty.
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Specification of the Model Structure(Eventual Diagram)
Assessment of the proposed model Determination of the Uncertainty and the
overall risk Realization of the Hypothesis- Management
tool- Questionnaire & Polling
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EVENTS
PROFITABLE EVENT REFLECTS
OPPORTUNITY
NON-PROFITABLE EVENT REPRESENTS
RISKUNCERTANITY
EVENTUAL REASONING MODEL
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After having a thorough understanding of different risk assessment approaches, we have tried to analyze the non-centered part of risk i.e. UNCERTANITY.
Uncertainty=1-(Probability of Gain Frame + Probability of Loss Frame)
Hypothesis
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Whether Uncertainty Affects Business Decisions
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THANK YOU!!!