Explain how the information about the frequency and severity of accidents at ABC Factory could be used towards making improved risk CONTROL and risk FINANCING decisions
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Explain how the information about the frequency and severity of accidents at ABC Factory could be used towards making improved risk CONTROL and risk FINANCING decisions
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Management at ABC Factory have been carefully been recording the details of each time something went wrong on ‘accident report forms’. The information on each of the forms was then passed to the accounting department where a ‘cost’ was estimated for each accident. As a result of the data collecting process, the Risk Manager for ABC Factory now has much information relating to the frequency and severity of a) asset losses, b) personnel losses and c) liability losses over the past year.
REQUIRED: Explain how the information about the frequency and severity of accidents at ABC Factory could be used towards making improved risk CONTROL and risk FINANCING decisions for the forthcoming period. (50 marks)
