Principles of Risk Management

br With an increasingly murky future ahead of them electronics manufacturers have to begin to manage their risk effectively if they are to live long enough to witness the future themselves . An effective risk management strategy will not only help in doing so it might even bring to notice certain activities , event , or possibilities that might be used to the firm 's advantage (QAD , 2004 . To understand the various ways in which it can help the firm , the manufacturers have to understand what effective risk management involves by understanding its principles

ELECTRONICS

MANUFACTURERS MARKET

Globalization has been touted as a means to benefit the economies of all the countries that take part in reducing trade barriers . The consequences of this practice , however , for the electronics manufacturers are the shrinking of product lifecycle , the pricing pressures that the companies face , and the creation of fragmented markets . And the biggest impact of these consequences has been on the forecasting accuracy of demand for the products

It is no longer possible for firms to focus on long-term planning for their companies and so manage their supply chains . As a result these manufacturers are seeking to diversify the risk throughout the chain so as to divert it from themselves , primarily through transferring inventory back up the line , since inventory risk is the most significant type of risk for them . The inventory crisis in the industry is evidence of this type of behaviour occurring throughout the economy (QAD , 2004

Uncertainty Management

In defining risk most enterprises...