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Operational Risk Quantification : A Risk Flow Approach

Gandolf Finke, Mahender Singh, Svetlozar Rachev
2010 The Journal of Operational Risk  
The topic of operational risk has gained increasing attention in both academic research and in practice. We discuss means to quantify operational risk with specific focus on manufacturing companies. In line with the view of depicting operations of a company using material, financial and information flows, we extend the idea of overlaying the three flows with risk flow to assess operational risk. We demonstrate the application of the risk flow concept by discussing a case study with a consumer
more » ... y with a consumer goods company. We implemented the model using discrete-event and Monte Carlo simulation techniques. Results from the simulation are evaluated to show how specific parameter changes affect the level of operational risk exposure for this company.
doi:10.21314/jop.2010.083 fatcat:mugpxovfrzfp5ose7oznc4rmre