Answer :
Answer:The design option you're referring to is commonly known as risk transfer. Risk transfer involves shifting the potential consequences of a risk to another party. This can be accomplished through various methods such as outsourcing, joint ventures, partnerships, purchasing insurance, or using other financial instruments.
Explanation : Here’s a breakdown of these methods:
Outsourcing: Contracting out certain business functions or processes to external parties, often to leverage their expertise and reduce the risk associated with those functions.
Joint Venturing: Forming a strategic alliance with another company to share the risks and rewards of a particular project or business venture.
Partnering: Collaborating with other businesses or organizations to share resources and mitigate risks associated with certain operations or projects.
Buying Insurance: Purchasing insurance policies to protect against potential losses or liabilities. Insurance transfers the financial risk to the insurance company in exchange for a premium.
Using Financial Instruments: Utilizing financial derivatives such as options, futures, swaps, or hedges to manage and mitigate financial risks.
Each of these strategies can help an organization manage risks by transferring them to entities that are better equipped to handle them, thereby addressing opportunities, obstacles, or obligations more effectively.
