Enterprise Risk Management Models

Description

This book offers a comprehensive guide to several aspects of risk, including information systems, disaster management, supply chain and disaster management perspectives. A major portion of the book is devoted to presenting a number of operations research models that have been (or could be) applied to enterprise supply risk management, especially from the supply chain perspective. Each chapter of this book can be used as a stand-alone module on a respective topic, with dedicated examples, definitions and discussion notes. This book comes at a time when the world is increasingly challenged by different forms of risk and how to manage them. Events of the 21st Century have made enterprise risk management even more critical. Risks such as suspicions surrounding top-management structures, financial and technology bubbles (especially since 2008), as well as the risk posed by terrorism, such as the 9/11 attacks in the U.S. as well as more recent events in France, Belgium, and other European countries, have a tremendous impact on many facets of business. Businesses, in fact, exist to cope with risk in their area of specialization. Preface......Page 6 Notes......Page 7 Acknowledgment......Page 8 Contents......Page 9 1: Enterprise Risk Management in Supply Chains......Page 10 Unexpected Consequences......Page 11 Risk Context and Drivers......Page 12 Risk Management Responses......Page 13 Models Applied......Page 14 Risk Categories Within Supply Chains......Page 15 Process......Page 17 Mitigation Strategies......Page 18 Conclusions......Page 20 Notes......Page 21 Risk Management Process......Page 25 Risk Matrices......Page 26 Color Matrices......Page 29 Quantitative Risk Assessment......Page 31 Strategy/Risk Matrix......Page 34 Risk Adjusted Loss......Page 36 Notes......Page 38 Hierarchy Structuring......Page 40 Hierarchy Development Process......Page 42 The SMART Technique......Page 44 Plant Siting Decision......Page 46 Notes......Page 50 Case 1: Zhu, Shah and Sarkis (2018)1......Page 51 Case 2: Liu, Eckert, Yannou-Le Bris, and Petit (2019)2......Page 53 Value Analysis......Page 55 Case 3: Khatri and Srivastava (2016)3......Page 56 Case 4: Envinda, Briggs, Obuah, and Mbah (2011)4......Page 59 Case 5: Akyuz, Karahalios, and Celik (2015)5......Page 60 Value Analysis......Page 61 Conclusions......Page 62 Notes......Page 63 Inventory Systems......Page 64 Basic Inventory Simulation Model......Page 65 System Dynamics Modeling of Supply Chains......Page 69 Pull System......Page 73 Push System......Page 77 Monte Carlo Simulation for Analysis......Page 79 Notes......Page 82 Definition......Page 83 Basel I......Page 84 Basel III......Page 85 Historical Simulation......Page 86 Variance-Covariance Approach......Page 87 Monte Carlo Simulation of VaR......Page 88 The Simulation Process......Page 89 Demonstration of VaR Simulation......Page 90 Conclusions......Page 91 Notes......Page 94 7: Chance-Constrained Models......Page 96 Portfolio Selection......Page 98 Demonstration of Chance-Constrained Programming......Page 99 Maximize Expected Value of Probabilistic Function......Page 100 Minimize Variance......Page 101 Maximize Probability of Satisfying Chance Constraint......Page 102 Real Stock Data......Page 103 Chance-Constrained Model Results......Page 105 Conclusions......Page 109 Notes......Page 110 Basic Data......Page 112 Multiple Criteria Models......Page 114 Stochastic Mathematical Formulation......Page 116 DEA Models......Page 120 Conclusion......Page 122 Notes......Page 123 Bankruptcy Data Demonstration......Page 125 Software......Page 126 Decision Tree Model......Page 128 Logistic Regression Model......Page 131 Neural Network Model......Page 132 Summary......Page 135 Notes......Page 138 10: Balanced Scorecards to Measure Enterprise Risk Performance......Page 139 Small Business Scorecard Analysis......Page 140 ERM Performance Measurement......Page 142 Data......Page 143 Results and Discussion......Page 144 Performance......Page 145 Notes......Page 149 11: Information Systems Security Risk......Page 151 Frameworks......Page 152 Security Process......Page 154 Best Practices for Information System Security......Page 155 Supply Chain IT Risks......Page 156 Tradeoffs in ERP Outsourcing......Page 157 Qualitative Factors......Page 158 Multiple Criteria Analysis......Page 159 Scores......Page 161 Weights......Page 162 Value Score......Page 163 Notes......Page 165 12: Enterprise Risk Management in Projects......Page 167 Risk Management Planning......Page 168 Risk Identification......Page 169 Risk Response Planning......Page 170 Project Management Tools......Page 171 Simulation Models of Project Management Risk......Page 172 Governmental Project......Page 174 Conclusions......Page 176 Notes......Page 179 Emergency Management......Page 180 Emergency Management Support Systems......Page 181 Example Disaster Management System......Page 183 Disaster Management Criteria......Page 184 Multiple Criteria Analysis......Page 185 Scores......Page 186 Weights......Page 187 Natural Disaster and Financial Risk Management......Page 188 Natural Disaster Risk and Firm Value21......Page 191 Systematic and Unsystematic Risk......Page 193 Investment Evaluation......Page 194 Risk Management and Compliance......Page 195 Notes......Page 196 14: Sustainability and Enterprise Risk Management......Page 199 What We Eat......Page 200 The Supply Chains that Link Us to the World......Page 201 Sustainability Risks in Supply Chains......Page 203 Models in Sustainability Risk Management......Page 205 Weight Development......Page 206 Scores......Page 207 Value Analysis......Page 208 Notes......Page 209 15: Environmental Damage and Risk Assessment......Page 212 Specific Features of Managing Natural Disasters......Page 213 Framework......Page 214 Cost-Benefit Analysis......Page 216 Conjoint Analysis......Page 218 Habitat Equivalency Analysis......Page 221 Summary......Page 222 Notes......Page 223