Identify risk and apply risk management process  

Assessment Task 2 –  Project


1. Prepare a summary of the risk management context for this project. You will need to refer to the executive assessments and the briefing papers provided in the previous section. There may be additional points that you feel need to be added to the context, based on you experience.

Chang Lin is planning a risk management project into the final stages of opening up the new BizOps enterprises retail outlet in the Grandville Mall to reduce level of stock loss. it was estimated that there was an $11.3 million negative discrepancy between stock records (purchases minus sales) and the outcome of physical stock takes across the organization. These are aims of the project

  • Keep the right goods and materials that customers want and that business needs
  • Stock goods that sell quickly
  • Keep the right amount of stock – not too much, nor too little
  • Prevent stock from being misplaced
  • Keep stock in good and orderly condition
  • Prevent stock from being lost through theft or breakage
  • Re-order stock at the right time in the right quantity.
  • 2. Using the executive assessments as a starting point, prepare a list of stock security risks that need to be considered with the new Grandeville retail outlet.

    Thieves and shoplifters. Keeping stock secure, where it is located and how much it is worth – so good records are essential. Stock that is portable, does not feature the business’ logo, or is easy to sell on, is at particular risk.

    Theft by staff. Theft by employees can sometimes be a problem so company will come up with inventory record with limited access to the stock.

    3. Prepare a list of other people from the retail outlets who you would need to consult with to ensure that all risks concerning stock losses have been identified. For each person that you need to consult, provide a brief explanation of how you feel their information may be of assistance in this project.

    Stock manager: He will organize and monitor inventory levels to maximize efficiency.

    Stock clerks: He will take merchandise that has arrived, unpack merchandise from the warehouse, check for damage or mislabelling, and get it where it needs to be

    4. This project is touching on several legal issues, including:

  • Potential for theft of stock by staff
  • Identify and mark expensive portable equipment (such as computers). If possible, fit valuable stock with security tags – such as Radio Frequency Identification tags – which will sound an alarm if they are moved.
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    Last updated: Sep 2023

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    quency Identification tags – which will sound an alarm if they are moved.

  • Don’t leave equipment hanging around after delivery. Put it away in a secure place, record it and clear up packaging. It is a good idea to dispose of packaging securely -leaving boxes in view could be an advertisement to thieves.
  • Take regular inventories.
  • Put CCTV in parking lots and other key locations.
  • Potential for fraud and theft of stock by delivery agents
  • Train staff about your security systems and your disciplinary policies and procedures. Training about the cost of stock theft will help, as many people aren’t aware of the implications for company turnover and job security.
  • Set up procedures to prevent theft. Staff with financial responsibilities should not be in charge of stock records.
  • Restrict access to warehouses, stockrooms and stationery cupboards.
  • Regularly change staff controlling stock to avoid collusion or bad practice.
  • If action is taken to dismiss an employee without conducting a proper investigation or without valid evidence and subsequently, the employee’s explanation is found to be reasonable, the employee may have grounds to take action against the company.

    Employers must inform employees of their rights before any interview. These include the right to have a witness present and the right to remain silent. Also, if the employee in question is a minor, ensure that an adult is present with the employee at all times when conducting interviews.

    5. Using the risk management procedures and the risk management plan template, complete the following:

  • Document, analyse, categories and evaluate the risks that are associated with this project.
  • Theft

    Theft is one of the biggest risks with regard to inventory control, specifically when the inventory is higher in value. If internal employees are involved in the theft, it is much more difficult to identify as they know the entire system and would probably be wise enough to erase all their tracks after the theft.

    Inventory Waste & Damage

    Inventory usually tends to get damaged while being used in the normal business processes. Damaged inventory cannot be used and goes to waste, increasing the costs of the business. To avoid inventory from being damaged and to reduce waste costs, companies create inventory control policies to minimize the damage as much as possible as well as issue rules and regulations regarding the effective use of inventory to prevent waste.

    Inventory Loss

    Inventory is a current asset to a firm. A loss of inventory means a reduction in the company equity. Goods in the inventory can get lost if the inventory is not managed properly or if the employees are not careful in handling inventory.

  • Identify and evaluate control measures for all risks.
  • Tracking

    The most basic step in inventory control is maintaining a catalo...

    Last updated: Sep 2023

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