Determining the Net Financial Risk for Decision Making in Business Interactions

Abstract

In a business interaction, transactional risk highlights the uncertainty associated in not achieving the desired outcomes. The assessment of transactional risk gives the interacting user the different levels of failure in achieving its desired outcomes and the consequences that it can experience. In a business interaction, the consequences that can be experienced pertain to the financial resources invested to achieve the desired outcomes. The level of financial loss that could be experienced plays a very important role in the interacting user's decision to form a business interaction. The level of financial loss is dependent on the different types of uncertain events associated with the business interaction. In this paper, we will propose a methodology by which the interacting user in an e-business interaction can capture the different types of uncertainties and ascertain the financial risk that could be experienced from it.

A Methodology for Transactional Risk Assessment and Decision Making in e-Business Interactions

“…The detailed steps by which the variability in the investments of resources is captured and then the effect of dependant and non-dependant uncertainties is determined on them are mentioned in [23,24]. To clarify, let us consider that there are 5 time slots in risk assessing agent 'A's interaction with the logistics company; and it invests its resources in each of those in the order of $2,000, $3,000, $1,000, $2,000 and $2,000.…”