Question 4.

To prioritize the five different risks based on their risk scores, we'll consider both the impact and
likelihood of each risk. Higher risk scores, which result from a combination of higher impact and
likelihood, indicate greater overall risk. Here's the prioritization of the risks along with justifications for
their importance:

1. Risk 3: Pandemic-induced market depression

 Risk Score: 5 (High Impact, Medium Likelihood)

 Justification: This risk has the highest risk score due to its significant impact potential
and the current relevance of pandemic-related challenges. A pandemic-induced market
depression can severely affect sales and motivation for the sales team. It's important to
prioritize this risk to develop strategies for market resilience and maintaining team
morale.

2. Risk 2: Use of old technology saws

 Risk Score: 4 (High Impact, Low Likelihood)

 Justification: While the likelihood of this risk occurring is relatively low, it has a high
impact, including significant financial losses and potential harm to employee branding.
Addressing this risk is crucial as it involves reducing raw material wastage and optimizing
production processes for cost efficiency.

3. Risk 4: New regulations on working shifts

 Risk Score: 3 (High Impact, Medium Likelihood)

 Justification: This risk has a moderate likelihood but a high impact, including potential
layoffs of night shift workers. Given the regulatory changes, it's essential to prioritize this
risk to ensure compliance, minimize workforce disruption, and explore alternative
working arrangements.

4. Risk 1: Data hacking

 Risk Score: 2 (Moderate Impact, High Likelihood)

 Justification: This risk has a high likelihood of occurring, making it important to address.
While it may not have the highest impact in financial terms, the loss of data security and
potential reputational damage can be significant. Mitigating this risk is critical to protect
sensitive data and maintain trust with customers.

5. Risk 5: End customers preferring biodegradable plastic packaging

 Risk Score: 1 (Low Impact, Low Likelihood)

 Justification: This risk has the lowest risk score due to its relatively low impact and
likelihood. While it may not pose an immediate threat, it's important to monitor
 consumer preferences and adapt to market trends gradually to ensure sustainable
growth and brand value.

Prioritizing risks in this manner allows the organization to focus its resources and efforts on addressing
the risks that pose the greatest potential impact and likelihood of occurrence. However, it's essential to
periodically reassess these priorities as the business environment evolves.