The goal of risk management for large corporations is identifying and effectively minimizing operational risk. This research focuses on the influence of internal and external factors on operational risk in manufacturing sites. Scholars, as well as practitioners, have recognized the importance of operational risk in the recent past. I also mentioned the operational risk approaches to measuring the risk of the manufacturing firms. This concept is further extended by considering the risk flow to evaluate operational risk. The application of the risk flow concept is discussed in the context of a case study carried out in a consumer products company. I applied Monte Carlo and discrete-event simulation techniques to develop the model. The simulation results are then compared across the experiments to see how the change in specific parameters led to a change in the level of operational risk exposure for this Company.
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