1 Risk and Uncertainty Management

2 Rather than passively accepting risks, many managers see it as their duty to take actions to reduce them Indeed, many would go further than this and say that their role is also to identify opportunities

3 Sources of uncertainty at Two Valleys company

4 Estimated values for uncertain factors

5 Cumulative probability distributions for annual profits at two sites

6 Results of risk management actions

7 Tornado diagram for Littleton

8 Tornado diagram for Callum Falls

9 Brainstorming Do not criticize ideas Encourage participants to put forward any idea that they can think of Aim to generate large quantities of ideas Encourage people to combine or modify ideas that have already been put forward

10 How can we reduce fixed costs? How can we increase open market demand? How can we reduce variable costs per unit? How can we increase the chances of the contract being signed?

11 The effectiveness of risk management measures