In the last twenty years, ERM has gained relevance in business management and was put to test in many “tail” situations, starting from the SARS outbreaks in 2003 up to recent financial crises (subprime and sovereign debt crises) and regional pandemic. Notwithstanding the lesson learnt, prima...

This paper deals with multi-period project portfolio selection problem. In this problem, the available budget is invested on the best portfolio of projects in each period such that the net profit is maximized. We also consider more realistic assumptions to cover wider range of applications than...

We study how investments that require long-term financial commitments are affected by undiversifiable, uninsurable risk in the economic environment in the context of investor preferences characterized by decreasing absolute risk aversion and a desire for consumption smoothing. In our setting, if...

Several firms make business decisions based on risk specifications or estimates provided by domain-experts. But research on whether the format of risk specifications systematically affects decision making in multi-dimensional environments is scarce. Using laboratory experiments, we show that...

This article explores how the EPC contractor's risk of project delays related to the default of a key component supplier can be mitigated contractually. Only a limited number of the remedies that are regulated in standard construction contract forms are designed to support the EPC contractor's...

Significant research on risk management has focused on the development and assessment of risk management models. However, risk management has been often criticized as being inadequate and not achieving its main objectives of bringing greater certainty to projects by minimizing threats and...

This teaching note provides step-by-step instruction for simulating the net present value and the internal rate of return of a five-year project. The uncertainty lie in the initial level of sales, sales growth rates, gross profit margins, operating expenses before depreciation, and the terminal...

Purpose – Logistic service providers (LSPs) are increasingly required to take over the ownership of network-specific inventories and to finance related working capital. The paper examines the nature of associated uncertainties, especially behavioural risks and illustrates the mechanisms of the...