PPT Slide

• Organizational Tolerance For Cost Risk (increased cost)

• Organizational Tolerance for Value Risk (slippage in performance)

What is the decision processbehind the following:

• Buying a $1 lottery ticket for the chance to win $1 million. Odds are 1 in 1,000.
• Buying a $100 lottery ticket for the chance to win $1 million. Odds are 1 in 1,000.
• Buying a $100 lottery ticket for the chance to win $10 million. Odds are 1 in 1,000.

Defining Risk Tolerance

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