**8. Conclusion**

In this article, we describe a method for how to allocate a risk management budget among the possible mitigation or transfer plans. In most of today's literature, the risk management plan usually ranks the risks and recommends handling those with high rankings. Almost no consideration is given to either response plans or response feasibility. This study proposes three heuristic algorithm approaches to budget allocation, and demonstrates the method, including a sensitivity analysis of the budget constraint. The results are encouraging and help define rules about risk management budgeting.

The model is based on the expected damage, and assumes we will always prefer to reduce expected damages plus their cost. It does not discuss the question of risk taking.

A simulated scenario with 15 risks and 45 response plans was demonstrated. The most important lesson learned from the example tested in the study is that the solution is mainly influenced by the response plan, and not only by the expected damage of the risk, as all of the ranking methods recommend. Moreover, for a limited budget, the BSR is usually the best algorithm, while for an unlimited budget the MDR or MPR algorithms are more preferable..
