Parker Department Stores has been hurt in recent months by a large increase in shoplifting losses.Parker's risk manager concluded that while the frequency of shoplifting losses was high,the severity is still relatively low.What is (are)the appropriate risk management technique(s)to apply to this problem?
A)retention
B)loss prevention
C)transfer through insurance
D)avoidance

Question

Quizplus · Accepted Answer

Loss prevention is the most appropriate technique to apply to this problem as it is specifically designed to reduce the frequency of losses due to theft. Retention is not suitable as it involves accepting the cost of losses, which is not a desired outcome. Transfer through insurance may not be effective for shoplifting losses as it is difficult to quantify and insure against this type of risk. Avoidance is not possible as Parker Department Stores cannot avoid the risk of shoplifting completely.

Parker Department Stores Has Been Hurt in Recent Months by a Large