EMA 630 Risk Matrix
Three Risks and Mitigations: Define, quantify, and mitigate the following risks using the risk matrix. Note: There are multiple correct answers possible in this assignment.
1. You hear on the news that there could be political unrest in the country in which one of your key international suppliers resides. The opposition party’s major platform is higher wages for workers in order to gain popularity with the majority of voters. The upcoming national elections are nine months away. What are the risks that this political unrest could possibly affect the production line?
2. Management wants to reduce costs by moving some production facilities to a country where labor costs are cheaper. Even though this move is consistent with current trade agreements, the move is counter to the policies of the new executive administration of the federal government, which is promoting made-in-America products. The move would be legal, but the federal government is threatening increased tariffs and taxes to companies that do not comply with the buy-American initiative. What are the risks to the company and the production line if management decides to move the production facility?
3. The production line is staffed with union workers. The four-year union agreement is coming to an end in 12 months. Previous negotiations have been cooperative, but there have been discussions of union discontent with current worker benefits. On the other hand, raising worker benefits could affect VALID’s profits, which would cause the company’s stock value to drop and adversely affect stockholders. If there were a union strike, the production line would be directly affected. What are the risks?
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Likelihood (L) |
5 |
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4 |
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3 |
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2 |
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1 |
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1 |
2 |
3 |
4 |
5 |
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Consequence (C) |
Figure 1: Risk Matrix
Table 1: Risk Likelihood Criteria
|
Level |
Likelihood |
Probability of Occurrence |
|
5 |
Near Certainty |
90% |
|
4 |
Highly Likely |
70% |
|
3 |
Likely |
50% |
|
2 |
Low Likelihood |
30% |
|
1 |
Not Likely |
10% |
Table 2: Risk Consequence Criteria
|
Level |
Consequence |
|
5 |
Will jeopardize project success |
|
4 |
May jeopardize project success |
|
3 |
Limited impact to project |
|
2 |
Can be tolerated with little or no impact to project |
|
1 |
Minimal to no consequence |
Directions: Study the three risks in the scenario. Then, address the following:
1. Develop an “If this risk occurs, then this could happen to the project” statement in Table 3.
2. Quantify the risk using the Likelihood Criteria (Table 1) and Consequence Criteria (Table 2), and insert corresponding likelihood and consequence numbers in the columns in Table 3.
3. Write a corresponding mitigation plan in Table 3. This step aligns with critical element III.B in Final Project II.
4. Insert the risk number in the corresponding box in the risk matrix in Figure 1. This step aligns with critical element III.A in Final Project II.
Table 3: Risk ID, Quantification, and Mitigation
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Risk # |
L# |
C# |
Risk If Then Statement & Mitigation |
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(Example) |
(1–5) |
(1–5) |
(If this risk happens, then this will happen to the project) |
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Mitigation: (State mitigation plan here.) |
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Assumption: (Insert assumptions associated with your response to the risk.) |
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1 |
If political unrest within the country occurs, then — |
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Mitigation: |
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Assumption: (if needed) |
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2 |
If management moves some of the production facilities to a foreign country, then — |
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Mitigation: |
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Assumption: (if needed) |
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3 |
If the union strike occurs, then — |
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Mitigation: |
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Assumption: (if needed) |
