Indian Institute of Management, Calcutta

Post Graduate Programme 2016-2017

Course Name Risk Management

Term PGDM Term-II (1.5 credit course)
Name of Course Coordinator Prof. Sumanta Basu
Name of the Instructor(s) Prof. Megha Sharma, Prof. Preetam Basu, Prof. Sumanta Basu

Objectives:
Risk indicates possible variability in outcomes of a process/event around some expected value. Risk
Management is the process by which various risk exposures are identified, measured, and controlled.
Business risks are those which a firm willingly assumes to create a competitive advantage and add value for
its shareholders. Business risks pertain to the product market in which the firm operates and include
technological innovations, product design and marketing. This course introduces students to different
aspects of managerial decision-making under risks.

Session Plan:
Session Topics Instructor
1 Overview of Risk management; MS/PB
Introduction to Decision Analysis and Decision Trees
2 Introduction to Bayesian Analysis; Multi-stage Decision Trees MS/PB
3 Utility Theory as a Decision-Making Criterion MS/PB
4 Introduction to Monte Carlo Simulation using MS Excel MS/PB
5 Case Discussion, Risk Analysis and Decision Making using Monte MS/PB
Carlo Simulation
6 Introduction to Markov Chain MS/SB
7 Markov Chain, Transition Probability, Single and Multiple step MS/SB
Transition
8 Classification of States, Properties of Markov Chain, Limiting cases MS/SB
9 Equilibrium conditions, Absorbing states, Introduction to Markov MS/SB
Decision Process
10 Applications of Markov Chain and Markov Decision Processes MS/SB

MS: Prof. Megha Sharma, PB: Prof. Preetam Basu , SB: Prof. Sumanta Basu

Text Book:
A) Quantitative Analysis for Managers by B. Render, R.M. Stair Jr., M.E. Hanna and Badri, PHI, 10th
Edition or latest edition
B) Introduction to Operations Research by Hillier and Lieberman, TMH, Eighth or latest edition

Reference book: Introduction to Probability Models by S.M. Ross, Elsevier, 9 th edition.

Pedagogy
The course would be conducted through lectures, case discussions, and problem solving using Excel.

Evaluation Method
Case Analysis: 10%, Quiz 30%, Final Exam 60%