Differentiate between risk and uncertainty

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Reference no: EM133573955

Aaron is a young entrepreneur. He saw a business opportunity in making and delivering home cooked meals. His business is called Made For You.

Initially, his target market was only students. However, his business grew quickly, and he secured a contract to provide daily meals for several retirement villages. Initially, he ran his business from his kitchen, but now he is leasing a property in the industrial area. The property consists of an industrial kitchen, a large storage room and a small office. He also owns a delivery vehicle. Aaron is in charge of all the administration and has employed four cooks and one driver.

Aaron was so focused on operations that he did not focus on risk management. He has now realised the importance of risk management, and he has come to you with some questions.

Questions

1. Explain the risk management process to Aaron by applying it to his business. You are to include the six steps. For each step, you are required to give a brief description and a comprehensive application. (Note: The majority of the marks will be allocated to the application).

2. Aaron requires some information on the concept of risk.

1. Explain the difference between pure risk and speculative risk. Provide Aaron with examples that are applicable to his business and industry.

2. Differentiate between risk and uncertainty. Provide Aaron with examples that are applicable to his business and industry.

Reference no: EM133573955

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