Organizational Risks & Mitigation Methods Essay

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As per our discussion last week I’ve prepared this kind of memo that outlines the potential risks that CWTI faces and methods of minimization for those hazards. The goal of this kind of exercise is to possess a starting point intended for establishing a risk management procedure within CWTI. Below I’ve identified dangers and provided suggested methods of mitigation for each and every.

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I’d love to point out that although most of these hazards have more than one potential mitigation approach, I chose to provide the method In my opinion would be most successful to get CWTI. 1 . )Risk of fluctuation in foreign exchange rates –USD receivables Mitigate using control method ie. ahead contracts, hedge etc . 2 . )Risk of fluctuation in interest rates – USD financial loan Mitigate using control method ie. forward contracts, hedge etc . 7. )Risk of inventory shrinkage due to robbery, damage Mitigate using sharing/transferring technique for instance. Purchase insurance for accumulation of products on hand 8. )Risk of supply delay if perhaps sawmill gear goes down, staff turnover/lack of skilled staff Mitigate applying diversification approach ie.

Include alternative options of production in the case either of those occur 9. )Risk of delay/damage/lost delivery to overseas market Reduce using sharing/transferring technique for instance. Purchase additional insurance that will cover this kind of 10. ) Risk of timber market/supply – what if a thing happens to forest? Fire, insect infestation Reduce using diversification ie.

Find other supplies of hardwood 11. ) Risk of popularity – environmental groups in the event that CWTI doesn’t live up to the clearing/replanting necessity Mitigate using control for instance. Establish good internal controls to ensure most clearing/replanting requirements are getting fulfilled. 12. ) Likelihood of not meeting financial obligations due to delayed/infrequent receivables – CWTI operates year round yet majority of repayment only gets received around December & January (based on 60/90 day terms) Mitigate using diversification for example.

Find more new customers that need timber all year round to balance the cash circulation. We can further more discuss other mitigation strategies should you make sure you. I look forward to your opinions.

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