Assessment 1: Article Summary
Introduction
This article summary is to provide a brief introduction to article 1 which shows that today, the mining firms grasp the great number of mineral inventories and this could be valuable only if the investment decision for these mining firms is made at right time with much effectiveness. Article 2 shows the classification of the operational risks into behavioural, technical and delivery proficiency risks.
Risk of commodity price, production cost and time to build in resource economics
The real option-type models can address effectively this problem. The threat that is attributed to technology innovation, commodity price, and the time period in establishing a mining process can make much weak to this advantage. The mean-reverting process is a realistic and much effective way for computation capacity, modelling prices of the commodity, a theory of microeconomics and big data (Zhang, et. al., 2018). For the mining investment decisions, there is an imperative risk factor named ”time to build”. This factor will also have an impact on mine’s value and the optimal price threshold as well. This article has also given a quantitative framework. This framework is about how the exploration tasks can affect the decisions of mining. This article had also focused on several directions for the potential future. These focused points are a moderate correlation involving the metal price and the energy price. Both of these fall under the class of commodity. In accumulation, mining activity is highly demanding in terms of energy and this energy may compile out of 50 % of total cost of mining. Moreover, the real option article also focuses on other factors such as employment cost for a geological grade, commodity market cycles, and metal mines.
Risk management for product-service system operation
This article is about categorizing operational threats into behavioural, technical, and release competence risks. This article also represents the most important step on the way to establish a structure for evaluating the risk management and operational risk with context to PSS (product-service system). This is much important for the reason that provider need to suppose increment in operational risks when providing the product-service system. This operational risk becomes a key barrier on the way to their full-scale product-service system transformation. This article made a research on how the operational risk focuses on specific aspects and service sectors such as banking and supply chain risks. These aspects and sectors restrict the contribution to the product-service system literature. This literature mainly focuses on the manufacturing industries (Reim, et. al., 2016). The second contribution to this article is for establishing an overview of strategies of risk managing for the PSS operation. This article has adapted 4 basic risk responses in context with the product-service system and these are discussed in risk management literature. This article has also proposed a new approach for how the responses of risk are used for managing these three categories of PSS operational risk. In the end, the most important contribution of this article is to recognize and elaborate major decision criteria that offer the direction for the selection of an appropriate risk response.
Conclusion
This article summary concludes a brief description of the two articles. These articles told about the classification of the operational threats into behavioural, technical and delivery competence threats and the mining firms grasps a great number of mineral inventories and this could be valuable only if the investment decision for these mining firms is made at right time with much effectiveness.
References
- Reim, W., Parida, V., & Sjödin, D. R. (2016). Risk management for product-service system operation. International Journal of Operations & Production Management.
- Zhang, K., Olawoyin, R., Nieto, A., & Kleit, A. N. (2018). Risk of commodity price, production cost and time to build in resource economics. Environment, development and sustainability, 20(6), 2521-2544.