Describe how you would use data and simple quantitative tools (such as historical variability, scenario analysis, or regression/forecasting ideas from Chapter 3) to measure the firm’s exposure to at least two of these risks.
Firm and Risk Profile
In this section,
Identify a real firm (or construct a realistic hypothetical firm), Describe its main lines of business, markets, and revenue sources. Explain the key types of risk the firm faces (for example, demand risk, input price risk, regulatory/political risk, exchange rate risk, or competitive/strategic risk), using concepts from the decision-making under uncertainty chapter. Quantitative Risk Assessment
In this section,
Describe how you would use data and simple quantitative tools (such as historical variability, scenario analysis, or regression/forecasting ideas from Chapter 3) to measure the firm’s exposure to at least two of these risks. Discuss what the size and nature of these risks imply for the firm’s profit volatility and long‑run sustainability. Diversification and Strategy Design
In this section,
Propose at least two diversification strategies the firm could pursue (for example, product diversification, geographic diversification, supplier diversification, or customer-base diversification). Explain how each strategy would reduce or reshape its risk exposure. Connect each proposed strategy to ideas from market structure, global business, or game theory (such as entering new markets, changing competitive positioning, or altering bargaining power with suppliers or buyers). Ethical and Managerial Implications
In this section,
Evaluate the ethical and stakeholder implications of your diversification plan: who is better off who might be worse off how managers should weigh these trade‑offs when making risk‑management decisions Conclude by explaining how your analysis illustrates the role of managerial economics in integrating risk assessment, diversification, and ethical responsibility in real-world strategic decision making.
