You are representing an Ambulance service as a contingency planner. Your top 5 r

Question

You are representing an Ambulance service as a contingency planner. Your top 5 risks are:
1. Lawsuits
2. Medical Malpractice
3. Late/Slow Response
4. Ambulance hitting a pedestrian
5. Limited number of staff

Using the Table attached, conduct a risk assessment based on the top 5 risks listed above.

TABLE 1-1 Buildlt's Risks Risk Description Estimated Impact of Its Occurrence Probability of Its Occurrence Expected Value Price of our components drops 10% across the board $2 million in reduced gross operating earnings per year 35% $700,000 in lost gross operating earnings per year Loss of the Gizmo account $4 million in lost revenues per year 50% $2 million in lost revenues per year $300,000 in lost profits Disruption of raw-materials supply due to a transportation strike 15% $45,000 in lost profits

Explanation / Answer

Risk 1- Price of components drops by 10% across the board

The expected impact is reduction of $700,000 per year in operating earning. This could lead to restructuring and staff layoff to improve upon the operating margins. This could ultimately contribute towards slow/late responses and limited number of staff risks.

Risk 2- Loss of Gizmo account

The expected impact is loss of $2 million in revenues. In order to maintain the margins the company might have to either reduced the pay of the staff. Also the staff that was serving the account would not be needed any longer. This would lead to layoffs in the account. These could lead to the staff being worried about their job security and might eventually result in an accident due to diverted attention of the staff. This cause can contribute to three risks- Limited numbers of staff, Slow/late response, Ambulance hitting a pedestrian.

Risk 3- Disruption of raw materials supply due to transportation strike

Expected loss of $45,000, loss being possibly adjustable through other initiatives does not pose threat to the staff. But due to transportation strike the service could be slow. Also due to a shortage maybe the company cannot fulfill a commitment it had made earlier and hence face lawsuit by a client or a patient.

As per the given data the risks can be categorized in the below order (in descending order of risk)

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