Type of Risk

Type of Risk and the Analysis
1. Dynamic risk
It is concerned with maximizing opportunities which also means that there will be potential gains as well as potential losses. Because the purpose of business is gaining the profits, the owner of the business is risking its money and capital assets in buying-selling the goods and assets. Thus the differences between the buying price and selling price will determine whether it creates profits or not. But it’s not the only determinant in deciding the business is creating profit. The time value of money is also important. If we can sell the goods is a very short time lag after we buy it, the profits are mentioned as higher and also better. Higher because it creates profits as soon as possible, better it term of the profit received can be used to buy another products or assets.

2. Contingent risk
This risk happens when the company is affected directly by an event in the area beyond its direct control but on which it has a dependency (I.e. weak suppliers). As a reseller company, this company relies on the distribution system which is taking the main issue. Because the fastest the delivery takes places, the better performance the company possess in fullfilling the demand from public.

3. Customer risk
. The dependency on one client creates vulnerability because that client can take its business away or be taken over by a rival. This risk can be managed by creating a larger customer base (having more than one customer). As a reseller company, this type of risk is having a very small chance to be happen because the customers vary in a widespread kind of handicraft makers.

4. Purchasing risk
many businesses are designing and implementing new performance measurement systems and finding a particular challenge in developing measures for some key elements of purchasing contribution which are now regarded as strategic but which have not been historically analyzed and measured in any serious way.

5. Reputation risk : this type of risk arise as a consequence of another risk, such as fraud, a building destroyed, failure to attend to complaints, lack of respect of others.