Volume risk
Ok kiddo, imagine you have a big jar of your favorite candy. You love having a lot of candy to eat, right? But what if one day, everyone wants to share your candy with you and you run out really quickly? That's kind of like volume risk.
Volume risk is when a business is not prepared for the amount of work or demand that they might receive. Just like your jar of candy, a business needs to make sure they have enough resources and materials to handle how much they might need.
For example, if a pizza restaurant only orders enough ingredients for 50 pizzas, but suddenly 100 people come in asking for pizza, the business might not be able to make enough pizza for everyone. This could make customers angry and the restaurant might lose business.
So, businesses need to try and estimate how much work or demand they might get and prepare accordingly. They might hire more people or order more materials so they can handle a larger volume of customers. Just like you might save some candy for later, businesses need to make sure they have enough to go around in case more people come in than they were expecting.
Volume risk is when a business is not prepared for the amount of work or demand that they might receive. Just like your jar of candy, a business needs to make sure they have enough resources and materials to handle how much they might need.
For example, if a pizza restaurant only orders enough ingredients for 50 pizzas, but suddenly 100 people come in asking for pizza, the business might not be able to make enough pizza for everyone. This could make customers angry and the restaurant might lose business.
So, businesses need to try and estimate how much work or demand they might get and prepare accordingly. They might hire more people or order more materials so they can handle a larger volume of customers. Just like you might save some candy for later, businesses need to make sure they have enough to go around in case more people come in than they were expecting.
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