| Course | BU 531 Strategic and Risk Management for Business Success |
|---|---|
| Unit | Unit 3 |
| Paper type | Risk profile per option |
| Length | About 1,120 words, 7 pages |
| Format | APA 7 student paper |
| School | Herzing University |
| Program | MBA |
| Updated | October 2026 |
Free sample paper for BU 531 Unit 3
Four Options, Six Categories, No Verdict Yet: A Risk Profile per Option for a Composite Northern Michigan Pellet Producer, Every Exposure Traced to a Commitment
Student Name
Business, Herzing University
BU 531: Strategic and Risk Management for Business Success
Instructor Name
March 16, 2026
Four Options, Six Categories, No Verdict Yet: A Risk Profile per Option for a Composite Northern Michigan Pellet Producer, Every Exposure Traced to a Commitment
Why a Profile per Option
A risk register lists hazards for something already decided. This unit profiles risk for a decision not yet made, so each of the four options from Unit 2 receives its own profile, and every exposure in a profile is traced to something that option commits the firm to doing. The same taxonomy runs across all four: strategic, operational, financial, regulatory, reputational and technology. Using one taxonomy lets the board read two profiles side by side and see where they diverge. The framework follows an enterprise risk approach that links risk to strategy and performance rather than treating it as a list of hazards (Committee of Sponsoring Organizations of the Treadway Commission [COSO], 2017). Mikes and Kaplan (2015) argue that enterprise risk management works best when it is fitted to the decisions and risk types a firm actually faces rather than applied as a uniform checklist, and profiling options before a choice is one such fit.
Each entry states a trigger, the chain from trigger to loss, roughly when it would land, how likely it looks over the five-year horizon and how large the effect would be. All likelihoods and amounts are composite estimates built for this case, expressed as effects on annual EBITDA, the firm's operating earnings, or as one-time costs. This paper does not recommend an option.
Option A: Continue as the Firm Is
Option A commits the firm to its current dependencies, so its profile is the baseline exposure.
Financial: a mild winter near the covenant
Trigger: a heating season 15 percent milder than average. Chain: bagged volume falls, inventory stays on the revolving line into spring and annual earnings fall by about $0.9 million, which breaches the 3.0 times debt covenant. Timing: any winter. Likelihood: about one winter in three. Effect: covenant breach, a waiver fee and higher interest, roughly $0.2 million, plus the lender's influence over future decisions.
Strategic: a retail chain changes supplier
Trigger: one of the two large chains moves to a cheaper supplier at its annual line review. Chain: about $3.9 million of revenue and $0.6 million of earnings disappear in one decision. Timing: a spring review. Likelihood: about one in five over five years. Effect: as stated, and partly recoverable only over several years.
Operational: the largest sawmill closes
Trigger: the sawmill supplying 31 percent of feedstock closes or cuts output. Chain: the firm buys residue on the spot market at about $9 a ton more. Effect: about $0.3 million a year. Likelihood: about one in four.
Operational: fire or dust explosion at the mill
Trigger: ignition of wood dust in a hammer mill or conveyor. Chain: production stops for three to six months; insurance covers property but only part of lost earnings and customers. Likelihood: low, perhaps 2 percent a year. Effect: severe, possibly the loss of a retail chain.
Option B: Institutional Supply Contracts
Strategic: too few institutions
Trigger: boiler conversions in the region are slower than assumed. Chain: the firm reaches 8,000 rather than 15,000 contracted tons, and new trucks and silos are underused. Likelihood: about one in three. Effect: about $0.25 million a year below plan.
Operational: a supply obligation during a feedstock shortage
Trigger: a sawmill closure in a cold winter. Chain: the firm must meet contracted minimums and buys residue or finished pellets at spot prices. Likelihood: about one in five. Effect: about $0.2 million in the year it happens.
Regulatory: public procurement rules
Trigger: a school district or county must rebid its contract under public purchasing rules. Chain: the firm loses a site to a lower bid at renewal. Likelihood: moderate. Effect: small per site.
Reputational: a missed delivery to a school
Trigger: a delivery fails in a cold snap. Chain: a school closes for a day and local news reports it. Likelihood: low. Effect: modest in money, larger for future bids.
Option C: Acquire a Second Mill
Financial: the debt ratio above the covenant
Trigger: the acquisition is debt-financed. Chain: the debt ratio rises to about 4.2 times, requiring a restructured loan at a higher rate. Likelihood: certain unless the family contributes equity. Effect: about $0.4 million a year in extra interest, and less room for any later shock.
Operational: integration across 300 miles
Trigger: the Wisconsin mill's experienced operators leave after the sale. Chain: quality problems and downtime in the first two years. Likelihood: about one in three. Effect: about $0.5 million a year until resolved.
Strategic: paying too much
Trigger: the Wisconsin market is weaker than the seller's figures show. Chain: the mill earns less than the price assumed. Likelihood: moderate. Effect: a permanent shortfall of perhaps $0.3 million a year.
Reputational: the family and the dividend
Trigger: the family contributes equity and suspends the dividend. Chain: tension among the second-generation owners about control and returns. Likelihood: moderate. Effect: hard to price, but it could stall later decisions.
Option D: Industrial Export Supply
Regulatory: European policy changes
Trigger: the buyer's government reduces support for pellet-fired power. Chain: the trader invokes a change-in-law clause and cuts volume. Likelihood: about one in four over three years. Effect: the new line runs below capacity, about $1.2 million a year in lost earnings.
Financial: currency movement
Trigger: the euro falls 10 percent against the dollar. Chain: revenue on 40,000 tons falls by about $0.7 million a year unless hedged. Likelihood: plausible in any year.
Operational: winter port closure and roundwood cost
Trigger: the Great Lakes shipping season ends. Chain: pellets must be stored for three months or moved by rail to the coast at higher cost. Likelihood: certain each winter. Effect: about $0.3 million a year in storage or freight.
Technology: ramp-up of the new line
Trigger: commissioning problems on new equipment. Chain: the firm misses early contract volumes. Likelihood: moderate. Effect: penalties of perhaps $0.2 million in the first year.
Reputational: burning wood for power
Trigger: an environmental campaign against industrial pellet exports. Chain: retail customers associate the firm's brand with the controversy. Likelihood: low to moderate. Effect: uncertain.
The Profiles Side by Side
Read across, the profiles diverge clearly. Option A concentrates its exposure in weather and two customers. Option C trades single-site exposure for near-certain financial strain. Option D replaces seasonal exposure with policy and currency exposure the firm has never managed. Option B carries the most numerous but smallest exposures. Power (2009) warns that risk management can become an exercise in documenting risks rather than deciding about them; these profiles are the inputs to that decision, which the scenario analysis in Unit 5 tests and the board paper in Unit 8 makes.
| Category | A. Continue | B. Contracts | C. Second mill | D. Export |
|---|---|---|---|---|
| Strategic | Retail chain loss, high effect | Slow uptake, moderate | Overpaying, moderate | Market outside the firm's knowledge |
| Operational | Sawmill closure; mill fire | Supply obligation in shortage | Integration | Port closure; roundwood |
| Financial | Mild winter breaches covenant | Low | Debt ratio above covenant, near certain | Currency, unhedged |
| Regulatory | Low | Procurement rebids | Low | European policy, high effect |
| Reputational | Low | Missed delivery | Family conflict | Industrial wood burning |
| Technology | Low | Low | Low | New line ramp-up |
References
Committee of Sponsoring Organizations of the Treadway Commission. (2017). Enterprise risk management: Integrating with strategy and performance. COSO.
Mikes, A., & Kaplan, R. S. (2015). When one size doesn't fit all: Evolving directions in the research and practice of enterprise risk management. Journal of Applied Corporate Finance, 27(1), 37-40. https://doi.org/10.1111/jacf.12102
Power, M. (2009). The risk management of nothing. Accounting, Organizations and Society, 34(6-7), 849-855. https://doi.org/10.1016/j.aos.2009.06.001
What the BU 531 Unit 3 instructions ask for
The third BU 531 unit asks students to profile the risks of each strategic option carried forward from Unit 2. Requirements typically include deriving exposures from what each option specifically commits, applying one taxonomy across all options so profiles can be compared, and stating for each exposure a trigger, the chain from trigger to loss, approximate timing, likelihood and impact. Figures for a composite firm should be marked as constructed. The unit is not a project risk register; it describes risks of choices not yet made. It also stops before recommending, which is the work of the final unit. Adapting a corporate risk register from work would import internal material, so build profiles from your own options.
How the BU 531 Unit 3 example is put together
The paper first explains how a profile per option differs from a register and fixes the taxonomy, drawing on COSO and on Mikes and Kaplan. Each of the four options then receives a profile under run-in headings, with every exposure written as trigger, chain, timing, likelihood and effect: a mild winter near the covenant for the baseline, slow uptake for institutional contracts, borrowing and integration for the mill purchase, and policy and currency for export. A side-by-side table summarizes each option by category. The close describes how the profiles diverge, notes which option carries the most numerous but smallest exposures, and uses Power to say why documenting risk is only the input to a decision.
BU 531 Unit 3 rubric: what full points look like
Herzing's rubric for the risk profile usually allocates points to exposures derived from each option's commitments, a consistent taxonomy, complete entries, comparability across profiles and restraint from recommending, plus writing. Derivation earns credit when every exposure can be traced to something the option commits. The taxonomy criterion rewards using one set of categories across all profiles. Complete entries score when trigger, chain, timing, likelihood and impact are all present. Comparability is often the deciding criterion, rewarding a summary that lets readers see where options diverge. Restraint earns points because recommending here pre-empts later units. Instructors also credit figures that are clearly labeled as constructed, and profiles short enough to be read side by side rather than as separate reports.
BU 531 Unit 3 help before you submit
Risk profiles lose points when they look like a generic register copied across options, with the same hazards repeated. Another frequent weakness is listing risks without triggers or chains, which leaves likelihood and impact unsupported. Writers often apply different categories to different options, making comparison impossible. Some include risks that have nothing to do with the option's commitments. Others slip into recommending an option, which belongs at the end of the course. Adapting a real corporate register exposes internal material. Assigning precise probabilities to a composite firm without saying they are constructed is another slip graders notice. If you are not sure how to trace exposures to commitments, our writers can help you build profiles for your own option set.
Get a BU 531 Unit 3 example written to your instructions
Two things get this moving: the Unit 3 instructions from your BU 531 classroom and the rubric beside them, plus the option set the assignment carries forward. We write a custom example that derives exposures from each option separately, holds one taxonomy across all of them, and states timing with every entry. First custom sample free, back in 24 to 48 hours.
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BU 531 Unit 3 questions, answered
How does this differ from a project risk register?
A register is a management tool: it lists what has been identified on a project already under way, assigns owners and tracks status until closure. This profile is an input to a choice nobody has made yet, so it is organized by option rather than by owner, carries no status column, and exists to show how the exposure pattern changes depending on which direction the firm takes.
Where do the likelihood and impact numbers come from?
From the composite case, and the paper should say so in plain terms. No published table gives the probability that a particular firm loses a particular contract, and any figure presented as fact about the world will not survive a careful reader. Construct the estimates, state the reasoning behind each one, keep the scale consistent across every option, and mark the whole set as built for the assignment.
Could I adapt our corporate risk register for this?
No. A register your firm maintains, along with its heat maps, loss history, claims records and whatever internal audit has written about them, is proprietary and often carries named owners. It is also the wrong shape, since it describes risks the company already accepted rather than exposures attached to options. Derive the profiles from the composite firm and construct every figure yourself.
Where can I find a free BU 531 Unit 3 sample paper?
You can read the BU 531 Unit 3 risk profile per option on this page at no charge, covering four option profiles, one shared taxonomy, a comparison grid and margin notes. Profiling other options? Share the assignment and your options and a matching set of profiles is written free, usually inside two days.
Where do the likelihood and impact figures come from in BU 531 Unit 3?
For a composite firm they are constructed estimates, labeled as such. The sample expresses impact as effects on annual earnings or one-time costs and gives likelihood over the five-year horizon.