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MGT253. Risk and Quality Management




Question;Assignments MGT253.;Risk and Quality Management;Mgt 253. Risk and Quality Management;Assignment 1;Telewonder in Slovobia;Slovobia is a former Soviet Republic. It has a;population of 30 million people, 35% of whom are ethnic Russians and 65% of;whom are Turkic Muslims.;Slovobia has identified the establishment of modern;telecommunications capabilities as a high priority. Such capabilities are;expected to cost 20 billion Slovars over a 5-year period. The official exchange;rate is $1 = 10 Slovars. The black-market rate fluctuates wildly, but basically;converges at $1 = 25 Slovars.;Slovobian authorities are hopeful that a;low-interest International Development Association (IDA) loan can be obtained;to cover a third of the anticipated project costs. They want the;telecommunications contractor to supply credit for 10% of the project costs.;The remaining funds will come from a variety of sources, including the;Telecommunications Ministry and commercial banks.;Telewonder Telecommunications Corporation, an;Australian provider of telecommunications services, has been approached by;Muhammed Farsi -- the Minister of Telecommunications -- about its interest in;bidding on the project. He informs Telewonder that an RFP (request for;proposal) will be issued shortly after Slovobia holds its first democratic;election in history. Unfortunately, elections recently had to be rescheduled;owing to a fundamentalist Muslim insurgency in the southwest portion of the;country.;1.;Risk identification?;What are the risks Telewonder faces if it obtains a contract todevelop;telecommunications capabilities in Slovobia?;2.;Risk impact analysis?;What are the consequences to Telewonder if the anticipatedrisks;become real?;3. Risk response;planning?;What can Telewonder do to handle risks?;?2013 University of;Management and Technology 1;Assignments MGT253. Risk and;Quality Management;Assignment 2;Events Plus Inc.;Events Plus Inc. is a company that organizes;seminars. Each year, it holds some 120 seminars dealing with business;management and public sector management themes.;In order to encourage early enrollments to its;seminars, Events Plus offers 20 percent discounts to participants who register;for a class up to six weeks in advance of the date of the seminar offering.;Because this is an attractive discount, popular classes usually experience;heavy levels of sign-ups before the six-week pre-seminar cut-off point. Less;popular courses experience weaker levels of sign-ups.;Table 1 shows data collected on 110 seminar;offerings that were tracked by Events Plus over the past year and a half.;Looking at the data, Events Plus finds that in 22 cases, enrollments were so strong;at the six-week marker that they covered all anticipated seminar costs.;Typically, these classes resulted in decent profits, although in two cases the;class had to be cancelled owing to instructor illness. In 33 cases, enrollments;were reasonably good at the six-week marker and covered 70-95 percent of the;seminar costs. The seminars usually experience some profit, although on ten;occasions classes could not be held owing to insufficient enrollments. In 55;cases, enrollments were weak at the six-week marker, covering less than 70;percent of anticipated seminar costs. Often, these classes did not break even;and in a number of cases resulted in substantial losses. On 22 instances, they;were cancelled owing to poor enrollments.;Break even at six-week marker?;Hold;seminar?;Overall;Probability;Yes, 22;times (20%);Yes, 20;times (91%);0.18;Yes, 22;times (20%);No, 2 times;(9%);0.02;Almost, 33;times (30%);Yes, 23;times (70%);0.21;Almost, 33;times (30%);No, 10 times;(30%);0.09;No, 55 times (50%);Yes, 33;times (60%);0.30;No, 55 times (50%);No, 22 times;(40%);0.20;Table 1;Events Plus uses the information contained in this;table to track enrollment strength course-by-course. That is, decision-makers;use this historical data to determine the viability of current seminar;offerings. At the six-week pre-course marker, managers review enrollments and;classify a seminar according one of three categories: Break even as of today;almost break even as of today, and not-near-to-breaking-even as of today.;Assignment;1. Create;a decision-tree that will help guide us in determining what action to take when;we review student enrollments at the six-week, pre-course marker.;?2013 University of;Management and Technology 2;Assignments MGT253.;Risk and Quality Management;2. Senior;management is reviewing past attendance at seminars. They want to have an;overall understanding of how their seminar marketing efforts are doing. So they;ask the following questions, which you should answer;a.;What is the probability that Events Plus;will reach the break even point at the six week marker and ultimately hold the;seminar?;b.;What is the probability that Events Plus;will nearly reach the break even point at the six-week marker and;ultimately hold the seminar?;c.;What is the probability that Events Plus;will not reach the break even point at the six-week marker, but winds up;holding the seminar nonetheless?;3. Assume;the cost of preparing for a typical seminar (including advertising cost) is;$32,000 and revenue after preparation cost have been netted out is $20,000.;When seminars are cancelled, the preparation costs are lost entirely.;a. If;at the six-week marker we find that we have reached a break even point, what is;the expected monetary value associated with deciding to hold the seminar? Does;it make good business sense to go ahead and hold the seminar?;b. If;at the six week marker we find that we are near to reaching a break even;point, what is the expected monetary value associated with deciding to hold the;seminar? Does it make good business sense to go ahead and hold the seminar?;c. If;at the six week marker, we find that we clearly have not reached the;break even point, what is the expected monetary value associated with deciding;to hold the seminar? Does it make good business sense to go ahead and hold the;seminar?;4.;When Events Plus begins preparing to;offer a seminar, what is the probability that the seminar will actually be;held?;?2013 University of;Management and Technology 3;Assignments MGT253.;Risk and Quality Management;Assignment 3;George?s Thanksgiving Trip;George is invited by his sister, Dorothy, to attend;a family reunion during the Thanksgiving weekend. Dorothy lives in Denver, NY;about 90 miles northeast of New York City. George lives in Washington, DC;about 215 miles south of New York City. George decides to visit Dorothy and to;travel to her place by car.;The only problem is that road traffic;during the Thanksgiving holidays is terrible along the East Coast of the United;States. George would normally travel to Dorothy?s house by taking Interstate;Highway 95. This is the major link connecting Washington and New York City.;However, during Thanksgiving, the traffic on I-95 is usually bad, leading to;major delays.;George decides to explore an alternate route to;traveling to Dorothy?s. This route would be a few miles longer. Also, he would;encounter a 60 mile segment of road in a rural area, and he would have to;travel slowly on this segment. The good feature about the alternate route is;that it is unlikely to suffer from Thanksgiving traffic.;A map showing the two routes to;Dorothy?s house is offered in Figure 1.;Based on his experience in traveling along I-95;during Thanksgiving holidays, George has developed a good sense of the;likelihood of delays that he can encounter on the journey. Table 1 shows the;probability distributions he has created for all the segments of his trip to;Dorothy for both the I-95 route and the alternate route.;Assignment;Using the information supplied in Figure 1 and Table;1, determine the expected amount of time it will take George to travel from;Washington, DC to his sister?s house, employing both the I-95 and alternate;route. SHOW YOUR WORK, DEMONSRATING HOW YOU ARRIVED AT THE ANSWERS YOU PROVIDE.;?2013 University of;Management and Technology 4;Assignments MGT253.;Risk and Quality Management;Figure 1. Two Routes to;George?s Sister?s House;Sister?s House;Upstate, New York;10 miles;East Branch;Kingston;60 miles;Binghamton;50 miles;80 miles;30 miles;New;York City;Scranton;130 miles;175 miles;Legend;Highway;70 miles per hour;Rural;road, 40 miles per hour;Baltimore;40 miles;George?s house;Washington;DC;?2013 University of;Management and Technology 5;Assignments MGT253.;Risk and Quality Management;Probability Distributions for;Travel Times on Journey;Probability;Probability;Probability;Probability;10%;20%;30%;40%;Probability;longer;longer;longer;longer;Regular Route;achieving;than;than;than;than;(East Route);schedule;schedule;schedule;schedule;schedule;Segment;Washington-;Baltimore;0.7;0.3;0.0;0.0;0.0;Baltimore-New;York;City;0.0;0.1;0.2;0.5;0.2;New York City-;Kingston;0.1;0.2;0.3;0.3;0.1;Kingston-Sister's;Home;0.8;0.2;0.0;0.0;0.0;Probability;Probability;Probability;Probability;Probability;10%;20%;30%;40%;of;longer;longer;longer;longer;Alternate;Route;achieving;than;than;than;than;(West Route);schedule;schedule;schedule;schedule;schedule;Segment;Washington-;Baltimore;0.7;0.3;0.0;0.0;0.0;Baltimore-;Binghamton;0.9;0.1;0.0;0.0;0.0;Binghamton-E;Branch;0.9;0.1;0.0;0.0;0.0;E;Branch-Sister's;Home;0.8;0.2;0.0;0.0;0.0;?2013 University of;Management and Technology 6;Assignments MGT253.;Risk and Quality Management;Assignment 4;Monte Carlo Simulation Exercise;EQUIPMENT INSTALLATION AT GLOBUS;ENTERPRISES;The equipment installation group at Globus;Enterprises is about to make a cost estimate to determine how much it will cost;to install a back-up generator at a government laboratory facility. Over the;years, this group has carried out more than 100 such installations and has;developed a database reflecting past experience. Data on the distribution of;cost for design work, building effort, and testing effort is provided in Table;1.;Cheapest;Usual;Expensive;($/%);($/%);($/%);Design;9,000/30;10,000/40;12,000/30;Build;60,000/20;70,000/60;80,000/20;Test;18,000/20;20,000/50;24,000/30;Table 1. Historical Data;on Cost Distributions;The;data in the table picture the cost of an effort and the percentage of times;this cost is achieved. For example, 30% of the time, ?Design? cost $9,000, 40%;of the time it cost $10,000;30% of the time it cost $12,000.;00 16 45 84 18;83 28 82 36 91;95 14 80 68 34;54 55 13 20 70;57 68 61 37 30;09 81 24 55 21;Table 2. Two-digit Random Numbers;Assignment;1. Conduct;a Monte Carlo simulation to create a distribution portraying total estimated;project costs. Employ ten iterations in your computation. Display the;distribution graphically.;2.;On;the average, how much does it cost to carry out this project?;3.;What;is the standard deviation of the distribution that you generated (use the;formula;SD;=??(Xi ? X-bar)2/N;where SD = standard deviation,? = square root symbol,? = the summation sign;Xi;= the ith value of X, X-bar = the;mean of the X values, and N = the number of values being considered)? What;information does the standard deviation offer us that helps us develop a better;understanding of risk in this case? (For more help on computing standard;deviation, see below.);4.;Roughly;what is the probability that the project will cost more than $105,000?;?2013 University of;Management and Technology 7;Assignments MGT253. Risk and;Quality Management;Computing standard deviation;for following numbers: 8, 4, 10, 7, 6;x;- X-;X;X-bar;bar;Squared;8.00;7.00;1.00;1.00;4.00;7.00;-3.00;9.00;10.00;7.00;3.00;9.00;7.00;7.00;0.00;0.00;6.00;7.00;-1.00;1.00;Total;=;35.00;20.00;Average;= X-Bar =;7.00;4.00;(Sum Squared)/N =;Variance;2.00;Sqrt(Variance) = Standard Deviation;Computing;standard deviation for following numbers: 6, 7, 5.5, 8, 8.5;x;- X-;X;X-bar;bar;Squared;6.00;7.00;-1.00;1.00;7.00;7.00;0.00;0.00;5.50;7.00;-1.50;2.25;8.00;7.00;1.00;1.00;8.50;7.00;1.50;2.25;Total;=;35.00;6.50;Average;= X-Bar =;7.00;1.30;(Sum Squared)/N =;Variance;1.14;Sqrt(Variance) = Standard Deviation;Note;that the spread of numbers in the first case above is greater than the second;case, so that standard deviation in the first case (SD = 2.00) is greater than;in the second (SD = 1.14);?2013 University of;Management and Technology 8;Assignments MGT253.;Risk and Quality Management;Assignment 5;Murphy?s Law at Travel-Rite;Mike Jones had worked at Travel-Rite as a bus driver;for five years. He enjoyed the job. In turn, Travel-Rite was pleased with Mike;because he was courteous with clients and had a flawless safety record.;Mike was driving twenty-five tourists;from Washington, DC to New York City on Interstate 95. He noticed that his fuel;gauge showed that his twenty-nine passenger mini-bus was getting low on fuel;so he pulled into a gas station along the highway. At the fuel pump, he told;the station attendant to fill up the fuel tank. Ten minutes later, the tank was;filled and Mike pulled out of the gas station. The bus traveled about;twenty-five meters, and then the engine died. Mike tried futilely to restart;the engine.;It turned out that the gas station;attendant had accidentally filled the fuel tank with gasoline instead of diesel;fuel. The only way to deal with this would be to drain the gasoline out of the;fuel tank and to remove all traces of gasoline in the engine. The gas station;lacked this capability, so the gas station manager arranged to have the;mini-bus towed to a nearby garage. Meanwhile, Mike telephoned Travel-Rite?s;headquarters to tell them of his predicament. The headquarters staff arranged;to have the tourists picked up by a bus service operating out of New York City.;Two hours after the bus breakdown, the tourists resumed their journey.;The mini-bus was towed to the garage, where;mechanics attempted to determine whether the engine had been damaged by the;gasoline. The chief mechanic telephoned Travel-Rite headquarters to deliver his;report and was put in touch with Jennifer Chen, Travel-Rite?s president.;?There?s no problem cleaning up the;engine,? he reported. ?In fact, we?ve already got it working. However, you;appear to have a problem with your transmission, because the bus won?t go into;second gear. We looked at the transmission and saw that it?s damaged.?;Jennifer was shocked to;hear this and immediately telephoned the automobile dealer from whom she bought;her buses. When he heard the story, he understood the nature of the problem.;?The transmission was damaged when the bus was being;towed,? he said. ?The drive trains of buses are a bit complicated. You can?t;just hook them up to a tow truck and start towing them. Several steps have to;be taken to prepare them for towing, and obviously the tow truck driver didn?t;do this.?;Jennifer felt sick. What began as an innocent;refueling had turned into a disaster. Clients had been inconvenienced. Her new;bus had been damaged. All this was happening far from headquarters, so;resolution of the dispute with the gas station, tow truck company, and garage;would have to be carried out remotely.;Questions;1. From;Travel-Rite?s perspective, to what extent is the incident described in this;case an ?act of God? as opposed to a controllable event?;?2013 University of;Management and Technology 9;Assignments MGT253.;Risk and Quality Management;2. What;general categories of risk are being encountered here (e.g., business risk)?;Explain your answer.;3. How;would you go about conducting an ex post facto risk assessment of this;incident? What conclusions might result from this assessment? What risk;mitigation steps should be taken to avoid a repetition of this kind of event in;the future?;?2013 University of Management and Technology 10;Assignments MGT253.;Risk and Quality Management;Assignment 6;Part A. Scattergram Exercise;The table on the right examines the number defects;associated with different levels for processing widgets. For example, when the;processing speed reaches 60 widgets per hour, an average of 65 defects are;encountered.;Draw;a scatter diagram showing the relationship between processing speed and;defects. What conclusions can you derive from the diagram?;Units Processed;Average;Number;per Hour;of Defects;300;50;400;42;500;40;600;55;700;80;800;95;?2013 University of Management and Technology 11;Assignments MGT253.;Risk and Quality Management;Part B. Office Move: Cause and Effect;(Fishbone) Diagram Exercise;You are in charge of managing a project to relocate;an office from one building to another. The new building is located three;kilometers from the old one. Your job is;?;to;schedule the move;?;to make sure the old building is;prepared for the move (e.g., to reserve use of elevators);?;to make sure the new building is;prepared for the move (e.g., to reserve use of elevators);?;to make sure all employees are aware of;their responsibilities to help the move to go well;?;to;handle all the financial arrangements associated with the move;?;to handle all contractual arrangements;associated with the move;?;to arrange for the moving company to;pack, transport, and unpack the furnishings being moved.;Using the information supplied here, create a;cause-and-effect diagram that describes the move effort.;?2013 University of Management and Technology 12


Paper#53765 | Written in 18-Jul-2015

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