Risk Management

Course Description

Risk identification. Risk classification. frequency of occurrence, consequence analysis. Risk analysis and methods for risk analysis. Probabilistic models and risk quantification as an input to risk management. Risk assessment and risk management. Risk modeling. Decision making. Societal values and acceptable risk. Insurance and risk management. Financial values used in decision making. Project planning and financing in case of uncertainty. Risk management without and with presence of risk perception. Integral risk management: scenarios and consequences. Risk assessment and risk management for new technologies. Risk management applied to global natural resources. Enterprise risk management.

General Competencies

Understanding of basic methods used in risk analysis, risk assessment and risk management. Identification of the problems where risk management can be applied. Ability to prepare suitable risk management programmes for energy companies (decision making, price estimation)

Learning Outcomes

  1. Develop understanding of risk categories in different business sectors.
  2. Identify and describe company risks caused by external and internal drivers.
  3. Calculate risk exposure based on probability and impact.
  4. Define risk matrix for given investment project.
  5. Calculate expected monetary value of the originally identified risks.
  6. Develop risk register and analyse acceptability of the contingency fund.
  7. Create risk managemnet plan.
  8. Evaluate risk informed decision on investment project acceptability.

Forms of Teaching

Lectures

Teaching the course is organized in two teaching cycles. The first cycle contains seven weeks, mid-term exam, and the second cycle contains six weeks of classes and a final exam. Classes are conducted through a total of 15 weeks with weekly load of 2 hours. Each lecture includes wrriten material and slides.

Experimental Exercises

Continuous work with Risk register for an investment project

Other

Several short case studies during semester for group work followed by students' presentation and discussion with lecturers.

E-learning

Homeworks through Moodle e-learning tool.

Other

Relevant vistiting lecturers from business and public sector on the topic of risk management.

Grading Method

Continuous Assessment Exam
Type Threshold Percent of Grade Threshold Percent of Grade
Homeworks 0 % 15 % 0 % 15 %
Class participation 0 % 6 % 0 % 6 %
Attendance 0 % 4 % 0 % 4 %
Mid Term Exam: Written 0 % 30 % 0 %
Final Exam: Written 0 % 45 %
Exam: Written 0 % 75 %

Week by Week Schedule

  1. Risk identification. Risk classification – frequency of occurrence, consequence analysis.
  2. Risk analysis and methods for risk analysis. Probabilistic models and risk quantification as an input to risk management
  3. Risk assessment and risk management. Risk valuation, acceptability, risk measures, risk reduction, option generation and evaluation, cost/benefit approach.
  4. Static and adaptive methods of risk control
  5. Risk modeling – uncertainty, event probability, simulation, "what-if", "decision tree". Case study.
  6. Decision making types. Role of primary information in decision making process. Decision making under influence of uncertainty. Analysis and optimization of the decision. Role of quality control and quality assurance.
  7. Societal values and acceptable risk. Qualitative and quantitative safety goals. Cost-benefit and Risk-Benefit. Insurance and risk management. Sources of risk in financing: exchange rate, interest rate and energy price volatility.
  8. Exam
  9. Evaluating risk: A review of some basic principles in finance. Diversifiable, systematic risk. Hedging irrelevance proposition.
  10. Financial values used in decision making – NPV, IRR, Cash Flow. Project planning and financing in case of uncertainty.
  11. Risk management without and with presence of risk perception. The influence of risk perception on internal and external decisions related to risk management.
  12. Integral risk management: scenarios and consequences. Addition of multiple goals to risk analysis and management.
  13. Risk assessment and risk management for new technologies. Risk management applied to energy resources, global climate changes and other global natural resources.
  14. Enterprise risk management to limit influences of internal and external threats to organizational structures and financial losses. Lecutre given by vistiting lecturers on the topic of risk management.
  15. Exam

Study Programmes

University graduate
Computer Engineering (profile)
Recommended elective courses (3. semester)
Computer Science (profile)
Recommended elective courses (3. semester)
Electrical Power Engineering (profile)
Recommended elective courses (3. semester)
Software Engineering and Information Systems (profile)
Recommended elective courses (3. semester)
Telecommunication and Informatics (profile)
Recommended elective courses (3. semester)
Wireless Technologies (profile)
Recommended elective courses (3. semester)

Literature

Dale F. Cooper, Stephen Grey, Geoffrey Raymond, Phil Walker (2004.), Project Risk Management Guidelines: Managing Risk in Large Projects and Complex Procurements, John Wiley
(2004.), A guide to the project management body of knowledge: PMBOK Guide - 3rd ED., Project Management Institute, Inc.
John X. Wang (2002.), What Every Engineer Should Know About Decision Making Under Uncertainty, Marcel Dekker, Inc

Associate Lecturers

General

ID 34387
  Winter semester
4 ECTS
L1 English Level
L1 e-Learning
30 Lectures
0 Exercises
0 Laboratory exercises
0 Project laboratory

Grading System

90 Excellent
75 Very Good
60 Good
50 Acceptable