Page 250 - RISK Management IC 86

Risk Management

input and output analysis shows the critical importance
of the servicing department to the whole business apart
from the forecourt sales.

The two cars sales departments draw on the servicing
department to prepare vehicles for sale, and it also provides
input to the 'accident repairs' side of the business.

The construction of such an input - output matrix is fairly
straightforward if the various production departments are
run as separate profit centres, with the goods and services
produced by each department being transferred to other
departments at 'prices' which include the value added at
this stage of production.

In many organisations, however, products are not valued
at each stage of production, so that interdependencies
cannot be quantified precisely. Yet, even the marking of
the Mac excels highlight the interdependencies.

A useful method of measuring the potential impact of loss
producing events occurring in the future, is to convert
the input - output matrix into one showing coefficient.
The figures in the cells are then shown as coefficients of

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