The topic of operational risk has gained increasing attention in both academic research and in practice. We discuss means to quantify operational risk with specific focus on manufacturing companies. In line with the view of depicting operations of a company using material, financial and information flows, we extend the idea of overlaying the three flows with risk flow to assess operational risk...

Operational risk has been great challenges of commercial banks and financial institutions since losses caused by operational risk have been significantly greater than ever before. In order to control and manage operational risk better,clear awareness of the operational risk conduction mechanism is helpful to further understand the whole dynamic process of the risks affecting the business. Tradi...

In this paper we explore the functional correlation approach to operational risk. We consider networks with heterogeneous a priori conditional and unconditional failure probability. In the limit of sparse connectivity, self-consistent expressions for the dynamical evolution of order parameters are obtained. Under equilibrium conditions, expressions for the stationary states are also obtained. C...