GF510 Unit 9 Risk Treatment and Cost Plan Example

Reviewed by Chester Goodwin, MBA Risk Analysis and Management Purdue University Global Free custom sample in 24 to 48h

This GF510 Unit 9 treatment and cost plan buys only the risk reduction that is worth its price. Purdue Global GF 510, Risk Analysis and Management, asks MS in Finance students to cost treatment options against the loss they remove. At Ledgerwood Pools, the course's composite shell producer, the sample takes the five top exposures, from a $3.75 million expected loss on rate-driven demand to $875,000 on transport crashes, prices two or three options for each and computes net benefit. Flexible labor, a second resin supplier, a dealer surcharge, offline backups with cyber insurance and telematics are chosen for $1.03 million against a $1.1 million budget, cutting expected loss by about $4.4 million.

CourseGF510 Risk Analysis and Management
UnitUnit 9
Paper typeTreatment and cost plan
LengthAbout 990 words, 6 pages double-spaced
FormatAPA 7 student paper
SchoolPurdue University Global
ProgramMS in Finance
UpdatedOctober 2026

Free sample paper for GF510 Unit 9

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Paying Only for the Loss You Remove: A Unit 9 Treatment and Cost Plan for a Pool Maker's Top Five Exposures

[Student Name]

Purdue University Global

GF510: Risk Analysis and Management

Unit 9 Treatment and Cost Plan

[Instructor Name]

[Date]

Ledgerwood Pools, every quote and every loss estimate are composite; the framework and articles cited are real.

What this part is doingNaming the test, the count and the budget in the lead tells the reader how every recommendation will be judged.
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Method

For each exposure, expected annual loss is the probability of the event in a year times its estimated cost, using the midpoint of the likelihood band from Unit 3. Each option is costed per year, and its benefit is the cut in expected annual loss it produces. Net benefit is benefit minus cost. An option is recommended when its net benefit is positive and the budget allows; among options for the same exposure, the one with the higher net benefit wins unless they can be combined. Treatment choices follow the usual four: avoid, reduce, transfer or accept (International Organization for Standardization [ISO], 2018).

Exposure 1: Demand Drop From Higher Borrowing Rates (R02)

Expected annual loss: a 25 percent chance of a $15 million fall in operating income, or $3.75 million.

Option A, flexible labor. Move about a fifth of plant labor to agency staff who can be released within two weeks. Extra cost: $200,000 a year in agency premiums. Effect: impact falls to $11 million, expected loss to $2.75 million. Benefit $1.0 million; net benefit $800,000.

Option B, consumer financing program. Subsidize a pool loan program with a national lender so dealers can offer a lower rate. Cost: $350,000 a year. Effect: impact falls to $12.5 million. Benefit $625,000; net benefit $275,000.

Recommended: Option A. Option B is positive but weaker and would compete for the same budget.

Exposure 2: Resin Supplier Outage (R03)

Expected annual loss: 25 percent times $6 million, or $1.5 million.

Option A, qualify a second supplier. Move 35 percent of volume to a second resin supplier at a slightly higher price. Cost: $420,000 a year. Effect: an outage at either supplier would cut supply by at most two thirds rather than nearly all of it, and impact falls to $1.5 million. Expected loss $375,000; benefit $1.125 million; net benefit $705,000.

Option B, larger safety stock. Add forty-five days of resin. Cost: about $260,000 a year to carry, allowing for resin's limited shelf life. Effect: impact falls to $3.5 million. Benefit $625,000; net benefit $365,000.

Option C, contingent business interruption insurance. Premium $310,000 for cover of up to $3 million after a $1 million deductible. Benefit $750,000; net benefit $440,000.

Recommended: Option A. Dual sourcing removes the cause of the concentration, while stock and insurance only soften its effect; research on supply disruptions shows that their cost to a firm's value persists long after operations recover (Hendricks & Singhal, 2005).

Exposure 3: Resin Price Swings (R01)

Expected annual loss: 50 percent times $3 million, or $1.5 million.

Option A, an index-linked dealer surcharge. Add a published clause passing resin price changes above 10 percent through to dealers within thirty days. Cost: no direct spend, but an estimated 1 percent loss of volume from dealers who dislike surcharges, about $280,000 of margin. Effect: net impact falls to $1.0 million. Benefit $1.0 million; net benefit $720,000.

Option B, a fixed-price resin contract. Lock twelve months of prices at a premium of 3 percent on about $40 million of resin. Cost: $1.2 million. Benefit about $1.3 million; net benefit about $100,000.

Recommended: Option A. It does not draw on the treatment budget, since its cost is lost margin rather than spending.

The fixed-price contract removes more of the resin price exposure than the surcharge does, but it costs almost as much as the loss it prevents, which shows that the option that removes the most risk is not always the one worth buying.

What this part is doingThe highlighted sentence states the plan's central principle using its own numbers, the reasoning graders look for in a cost-based treatment plan.
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Exposure 4: Ransomware on Production Systems (R04)

Expected annual loss: 25 percent times $4.5 million, or about $1.13 million.

Option A, offline backups with tested recovery. Cost: $180,000 a year. Effect: impact falls to $1.8 million. Benefit $675,000; net benefit $495,000.

Option B, cyber insurance. Premium $120,000 for $3 million of cover above a $500,000 retention. Benefit $750,000; net benefit $630,000.

Option C, multifactor sign-in and endpoint detection. Cost: $140,000 a year. Effect: likelihood falls to 10 percent. Benefit $675,000; net benefit $535,000.

Recommended: Options A and B together. Backups shorten an outage and insurance pays for what remains; combined they leave only the $500,000 retention exposed, cutting expected loss to about $125,000 at a cost of $300,000. Option C is sound and is deferred only because the budget runs out.

Exposure 5: Serious Crash in Oversize Transport (R05)

Expected annual loss: 25 percent times $3.5 million, or $875,000.

Option A, telematics with driver coaching. Cost: $110,000 a year. Effect: likelihood falls by about 30 percent. Benefit about $260,000; net benefit about $150,000.

Option B, outsource to a specialized carrier. Extra freight cost $600,000 a year; most liability moves to the carrier. Benefit about $700,000; net benefit about $100,000.

Recommended: Option A, which keeps control of delivery timing, important to dealers in spring.

Summary Against the Budget

Recommended spending: flexible labor $200,000, second supplier $420,000, backups $180,000, cyber insurance $120,000 and telematics $110,000, a total of $1.03 million against the $1.1 million budget. The resin surcharge adds no spending. Together these treatments cut expected annual loss across the five exposures by about $4.4 million.

Two sound options are deferred: endpoint detection, at $140,000, and the larger resin safety stock, at $260,000. Either would exceed the budget. Both should be the first candidates if the budget rises.

What Is Accepted

The pension funding gap at the Indiana plant, about $2 million, is accepted within the board's appetite, since the plan's sponsor contributions are scheduled and the gap has narrowed for three years. Accepting a risk deliberately, with a stated reason, is a treatment in its own right (Committee of Sponsoring Organizations of the Treadway Commission [COSO], 2017).

What this part is doingEnding with an accepted exposure shows the plan chose not to spend where the risk sits within appetite.
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References

Committee of Sponsoring Organizations of the Treadway Commission. (2017). Enterprise risk management: Integrating with strategy and performance. COSO.

Hendricks, K. B., & Singhal, V. R. (2005). An empirical analysis of the effect of supply chain disruptions on long-run stock price performance and equity risk of the firm. Production and Operations Management, 14(1), 35-52. https://doi.org/10.1111/j.1937-5956.2005.tb00008.x

International Organization for Standardization. (2018). Risk management: Guidelines (ISO Standard No. 31000:2018). ISO.

GF510 Unit 9 instructions, in plain terms

The ninth GF510 unit asks you to choose treatments for your highest-rated exposures and justify them by cost. Define your method first: how expected annual loss is calculated and how an option's benefit and net benefit are measured. For each exposure, state the expected loss before treatment, then cost at least two options drawn from avoiding, reducing, transferring or accepting the risk. Show each option's annual cost, its effect on likelihood or impact, the resulting cut in expected loss and its net benefit. Recommend one option, or a combination, for each exposure and say why it beats the others. Total the recommended spending against a stated budget and name the sound options deferred. Record any exposure deliberately accepted, with the reason. Cite a risk management standard and relevant research in APA 7.

Inside the GF510 Unit 9 example

A method section opens the plan by defining expected loss as band-midpoint probability times estimated cost and setting a positive net benefit as the test, citing ISO 31000. Five exposure sections follow the same order: expected loss, options with cost and benefit, then a recommendation. The supplier section compares a second source, extra stock and contingent interruption cover, choosing dual sourcing with support from Hendricks and Singhal. In the resin price section a surcharge clause beats a fixed-price contract, and the highlighted sentence draws the lesson that removing the most risk is not always worth the price. For ransomware, backups and insurance are combined so only a $500,000 retention stays exposed. The summary totals $1.03 million of spending and defers endpoint detection and safety stock, and a closing section accepts the pension gap, citing COSO.

Reading the GF510 Unit 9 grading rubric

The rubric for this plan weights the economics most heavily. Graders verify expected loss calculations, option costs and net benefits, and they look for a consistent method applied to every exposure. Credit rises when options cover more than one treatment type, so a plan with only insurance or only controls scores lower. Recommendations must follow from the numbers, and a reason for choosing between two positive options earns analytical points. In GF510 the budget constraint matters: totaling spending, deferring sound options openly and showing how combinations interact demonstrate judgment. Recording accepted exposures with reasons is treated as part of a complete plan. Research support for key choices, clean presentation and APA 7 entries for ISO 31000 and the supply disruption study finish the scoring.

Common GF510 Unit 9 mistakes, and how to avoid them

A typical GF510 Unit 9 problem is recommending the option that removes the most risk without asking what it costs, which ignores the core lesson of the unit. Some plans give one option per exposure, leaving nothing to compare. Expected loss is sometimes calculated before treatment but not after, so benefit cannot be measured. Combinations are added as if their effects were independent, double counting the benefit. Budgets are ignored or exceeded silently. Accepted exposures are omitted, as if every risk had to be treated. Whatever register your course builds, the same discipline holds: expected loss first, at least two costed options, net benefit for each, a reasoned choice, a total against the budget and a record of what was accepted.

Get a GF510 Unit 9 example written to your instructions

Send your GF510 Unit 9 prompt and rubric together with the register from your earlier units and any budget your case states. Back comes a custom plan in which every option is costed, loss reductions are computed and recommendations fit the budget. The first custom sample is free, with 24-48h the typical wait. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.

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GF510 Unit 9 questions, answered

What if the case gives no cost figures for controls?

In that case the sample estimates them from public benchmarks, such as typical insurance rate ranges or inventory carrying cost percentages, and states each as an assumption. A sensitivity line shows whether the recommendation would change if the cost ran higher. Graders usually accept a clearly sourced estimate over a treatment left without any cost at all.

How is expected annual loss calculated?

Multiply how often a loss is expected per year by how much it would cost when it occurs. An event expected once every five years costing 3 million dollars has an expected annual loss of 600,000. The sample computes this before and after each option, and the difference is the benefit the treatment has to justify against its cost.

Should every exposure get a treatment?

Every exposure gets a decision, and keeping it is one. Where the firm's appetite covers an exposure, or no option costs less than the loss it removes, retention is often correct. The sample records retained exposures with their rationale so leadership can confirm each choice on the record instead of finding it by surprise later.

Where can I find a free GF510 Unit 9 sample paper?

You can read a full GF510 Unit 9 treatment and cost plan for a composite pool maker here, with five exposures, costed options, net benefits, a budget summary and APA 7 references.

Why choose the dealer surcharge over a fixed-price resin contract?

The fixed contract costs about $1.2 million to remove roughly $1.3 million of expected loss, a net benefit near $100,000. The surcharge removes $1.0 million at the cost of about $280,000 of lost margin, so it is far better value.