Integration of ERM, BIA, and Monte Carlo Simulation for Financial Resilience

Abstract

The volatility of raw-material prices, disease outbreaks, and mounting regulatory pressure are critical risks for Colombia’s poultry industry, eroding profitability and threatening business continuity. This article introduces a comprehensive model that integrates Enterprise Risk Management (ERM), Business Impact Analysis (BIA), and Monte Carlo simulation, applying it to Aves Dorado Avícola S.A. A sequential mixed-methods design was used: (i) 18 threats were identified through interviews and document review; (ii) inherent and residual risk maps were developed; (iii) a BIA was performed for four critical processes; and (iv) six extreme risks were modelled with 10,000 iterations in R-Studio. Results show that a 48-hour shutdown of the slaughter line would generate losses of COP 750 million, while the simulation produces a 95 % Operational VaR of COP 41 billion for a severe sanitary outbreak—equivalent to 38 % of annual EBITDA. The ERM-BIA integration revealed mitigation gaps and justified a 20 % increase in the bio-security budget. Three regulatory stress scenarios were also designed, indicating EBITDA-margin declines of up to 60 % if strict animal-density limits are enforced without compensatory investment. We conclude that the proposed model strengthens financial resilience, ties operational metrics to economic value, and is replicable in other poultry or agribusiness firms exposed to systemic risk.