Question;Mgt 253. Risk and Quality ManagementAssignment 1Telewonder in SlovobiaSlovobia 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 informsTelewonder;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 to develop telecommunications capabilities in Slovobia?2. Risk impact analysis ? What are the consequences to Telewonder if the anticipated risks become real?3. Risk response planning ? What can Telewonder do to handle risks;Mgt253.Risk andQualityManagement;Assignment1;TelewonderinSlovobia;Slovobiais;a former Soviet Republic.;It has apopulation of 30 million people;35%of whom are ethnicRussians and;65%of whom areTurkic Muslims.;Slovobia has;identified the establishment;ofmodern telecommunications;capabilities;as ahigh priority. Such capabilities;are expected to cost;20 billion Slovars over;a5-year period.;Theofficialexchangerateis;$1 =10 Slovars. Theblack-market rate;fluctuates wildly;butbasicallyconverges;at $1;=25 Slovars.;Slovobian;authorities are hopeful that a low-interestInternational Development;Association (IDA) loan;can;beobtained to cover a third;ofthe anticipated;project;costs. Theywant thetelecommunications contractor to supplycreditfor10%of theproject costs.;Theremainingfunds;will comefrom a varietyof sources;including the Telecommunications;Ministryandcommercial;banks.;Telewonder;Telecommunications;Corporation, anAustralian providerof;telecommunications;services, has;been;approached byMuhammedFarsi--the;Minister of Telecommunications-- about;its interest in;biddingon the project. Heinforms;Telewonder;that an RFP(request;for proposal)willbeissued;shortlyafter Slovobiaholds;its first democratic election;in history. Unfortunately,elections;recentlyhad to be rescheduled;owing;to a fundamentalist Muslim insurgencyin;the;southwest portion ofthe country.;1. Risk identification?What arethe risksTelewonder;facesif;it obtains acontract to develop telecommunications capabilities in Slovobia?;2. Risk impact analysis?;What;are;the consequences to Telewonder ifthe;anticipated;risks become real?;3. Risk response planning? What can;Telewonder do to handle;risks?;Assignment2;Events Plus Inc.;Events PlusInc.;is acompanythat;organizes seminars.;Eachyear, it holds some;120 seminars;dealingwith;business management and;publicsector management themes.;In;order;to encourageearlyenrollments;to its;seminars, Events Plus offers 20;percent discounts to participants who registerforaclass up to sixweeks in advanceof the date;ofthe seminar offering.Becausethis isan attractivediscount;popularclasses;usuallyexperienceheavylevels;of sign-ups before;the six-week pre-seminar;cut-off point.Less popularcourses experienceweaker;levels of sign-ups.;Table;1 shows datacollected on 110 seminar offerings that weretracked;by;Events;Plus over thepastyear andahalf.Looking;at thedata;Events Plus finds that;in22;cases;enrollments wereso;strongat thesix-weekmarker that;theycoveredallanticipated;seminar costs. Typically,these classesresulted indecent profits;although in two cases;the class had to becancelled owingto instructor illness.In 33 cases,enrollments were;reasonablygoodat;the;six-week markerand;covered 70-95 percent;of the seminar costs. Theseminars usuallyexperiencesomeprofit, although on ten occasions;classes could not beheld owingto;insufficient enrollments.In;55cases;enrollments wereweak;at thesix-;week marker,coveringless than 70 percent of anticipated seminarcosts. Often;these classes did not breakeven;and in a number ofcases resulted;in substantial losses. On;22 instances, theywerecancelled;owingto poorenrollments.;Breakevenat;six-weekmarker?;Holdseminar?;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 tableto track;enrollment strengthcourse-by-course.;That is, decision-makers use;this historical data;to determine the viabilityof current;seminar offerings.At;the six-week pre-course;marker, managers;review enrollments and classifyaseminar accordingoneof;three categories: Breakeven as;of today, almostbreakeven as;of today,and;not-near-to-breaking-even as;of today.;Assignment;1.;Create adecision-treethat will;help guide us in determining;what action to takewhen wereview;student enrollments at thesix-week;pre-coursemarker.;2.;Senior management is reviewingpast;attendanceat seminars.;Theywantto;have an overallunderstandingofhow their;seminar marketingefforts aredoing.;Sotheyask the followingquestions,whichyou;shouldanswer;a. What;is the probabilitythat Events;Plus willreachthe;breakeven point;at the sixweek;marker and ultimatelyhold theseminar?;b.;What is the probabilitythat Events;Plus willnearlyreach;the breakeven;point at thesix-week marker and ultimatelyhold;the;seminar?;c. What;is the probabilitythat Events;Plus willnotreach;the break even;pointat the six-week;marker, butwinds up;holdingthe seminar nonetheless?;3. Assume the cost of preparingfor atypical seminar(includingadvertising cost);is;$32,000 and revenueafter;preparation cost;have;been netted;out is $20,000. When seminars;are cancelled, thepreparation costsarelost entirely.;a. Ifat thesix-week;markerwefind that wehavereached;abreakeven;point, what is the expected monetaryvalueassociatedwith decidingto;hold the seminar?Does itmakegood business senseto goaheadand;hold theseminar?;b. Ifat;the;sixweek markerwefind;that weare nearto;reachingabreak even point;what is the expected;monetaryvalueassociated;with;decidingto hold the seminar?Does;itmakegood business sense;togo aheadand;hold the seminar?;c. Ifat thesixweek marker,wefind;that weclearlyhave not;reached thebreak;even;point, what is the expected monetaryvalueassociated with decidingto;hold theseminar?Does;itmakegood business senseto go;aheadand;hold the seminar?;4.;When Events Plus begins;preparingto offeraseminar;what;is the probabilitythat;the seminar will;actuallybeheld?;Assignment3;George?s;ThanksgivingTrip;Georgeis invited;by;his sister, Dorothy, to attend afamilyreunion duringthe Thanksgivingweekend.Dorothylives;in Denver,NY, about;90 miles northeast;of New York City. Georgelives;in Washington;DC, about 215 miles south;of NewYork City.;Georgedecides;to visitDorothyand to travel;to her;placebycar.;Theonlyproblem;is that road trafficduringthe;Thanksgivingholidays;isterrible;alongthe East Coast of the United States. Georgewould;normallytravel toDorothy?s house;bytakingInterstateHighway95.;This is the major link connecting Washington;and New York City. However;during Thanksgiving, thetrafficonI-95 is usuallybad;leading to majordelays.;Georgedecides to explore an alternate;route to travelingto Dorothy?s.;Thisroute would beafew miles longer. Also;hewould encountera60;mile segmentof road in a rural area,and he;wouldhaveto travel slowlyon;this segment. The;goodfeature about the alternaterouteis;thatitis;unlikelyto suffer from Thanksgivingtraffic.;A map showingthetwo routes;to Dorothy?s houseis;offered inFigure1.;Based;on hisexperiencein traveling;along;I-95 duringThanksgivingholidays;Georgehas;developed agood;senseof the;likelihood ofdelays that hecanencounter;on the journey.;Table 1 shows theprobabilitydistributions he;has created forallthe;segments;of his trip to Dorothyfor;both theI-95route and;the alternate;route.;Assignment;Usingthe information;supplied in Figure1 and;Table;1, determinetheexpected amountof time;itwilltakeGeorgeto;travel fromWashington;DC to his sister?s house, employingboth theI-95and;alternateroute. SHOWYOUR WORK;DEMONSRATING;HOW;YOU ARRIVEDATTHE ANSWERSYOU PROVIDE.;Figure1.TwoRoutesto;George?sSister?sHouse;Sister?sHouse;Upstate,NewYork;10miles;Binghamton;EastBranch;50miles;60miles;Kingston;80miles;30miles;NewYork City;Scranton;130miles;175miles;Legend;Highway, 70 miles;per;hour;Baltimore;Rural road,40 miles;per;hour;40miles;George?shouse;Washington,DC;Probability;Distributions forTravel;Times onJourney;Regular Route;(East;Route);Probability achieving;schedule;Probability;10%;longer;than schedule;Probability;20%;longer;than schedule;Probability;30%;longer;than schedule;Probability;40%;longer than 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;Alternate;Route;(West;Route);Probability of;achieving schedule;Probability;10%;longer;than schedule;Probability;20%;longer;than schedule;Probability;30%;longer;than schedule;Probability;40%;longer than 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;Assignment4;MonteCarlo;SimulationExercise;EQUIPMENT INSTALLATION AT;GLOBUSENTERPRISES;The equipment;installation groupat Globus Enterprises isabout to;makeacost estimateto determinehow;much itwillcost to;install a back-upgenerator;at a government laboratoryfacility. Over;theyears, this grouphas carried;out morethan 100 such installations and;has developed adatabasereflectingpast;experience.Data;on the distribution of cost for;design work, buildingeffort;and testingeffort;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;CostDistributions;Thedata in the table picture;the cost ofan;effort and;the percentageof;times this cost is achieved. For example;30%of;the time, ?Design? cost;$9,000, 40% ofthe timeitcost $10,000;30%of thetime;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;RandomNumbers;Assignment;1.;Conduct a MonteCarlo;simulation;to create;adistribution portrayingtotal;estimated project;costs. Employteniterations;inyourcomputation. Displaythe distribution graphically.;2. On the average, how;much does itcost to;carryout this;project?;3. What is;the standard deviation ofthe distribution thatyougenerated (usetheformula;SD =;??(Xi?;X-bar)2/N, whereSD=standard deviation;? =squareroot symbol,? = the summation sign, Xi=the ithvalue of;X, X-bar=the mean;of theX values;and N;=;the number ofvalues being considered)? What information does the standard deviation offer us that helps;usdevelop a better;understandingof risk;in this case? (For;more;help on computingstandard;deviation;seebelow.);4.;Roughlywhat is;the probabilitythat the project will;cost morethan $105,000?;Computingstandarddeviationforfollowingnumbers:8, 4;10,7,6;X X-bar;x- X-;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)=;StandardDeviation;Computingstandarddeviationforfollowingnumbers:6, 7;5.5,8,8.5;X X-bar;x- X-;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)=;StandardDeviation;Notethatthespreadofnumbersinthefirstcaseaboveisgreaterthanthesecondcase,sothat;standarddeviationinthefirstcase(SD= 2.00)isgreaterthaninthesecond(SD=1.14);Assignment5;Murphy?s Lawat Travel-Rite;Mike Jones had;worked at Travel-Rite as;abus driver forfiveyears. Heenjoyed;the job. In;turn, Travel-Ritewas pleased with Mike, becausehewas;courteous with clients and had aflawlesssafetyrecord.;Mike was drivingtwenty-fivetourists;from Washington;DC to NewYorkCityon Interstate;95. Henoticedthat;his fuel gaugeshowed that his twenty-nine;passenger mini-;bus was gettinglow onfuel;so hepulled into agas station;alongthe highway. At the;fuel pump, hetold the station attendant to;fill up thefuel tank.;Ten minutes later;the tank was filled;and Mikepulled out of thegas station.;Thebus traveledabout twenty- five;meters, and then theenginedied. Miketried futilelyto restart theengine.;It;turned out that thegasstation;attendant had accidentallyfilled;thefuel tank with gasolineinstead;of dieselfuel.;Theonlywayto;deal;with this would beto drain the;gasolineout;of thefuel tank and;to remove alltraces;ofgasolinein the engine.;Thegas station lacked this;capability;so thegas station manager;arranged to havethemini-bus;towed to a nearbygarage. Meanwhile, Mike telephoned Travel-Rite?s;headquarters;to;tell them of his predicament. Theheadquarters;staffarranged to havethetourists;picked up byabus;serviceoperating out of New York City. Two;hours after thebus;breakdown, the tourists;resumed theirjourney.;Themini-bus was;towedto thegarage,wheremechanics attempted;to determine whethertheengine;had been damaged bythegasoline.;The chiefmechanictelephoned Travel-Riteheadquartersto;deliverhis report andwas;put in touch with Jennifer Chen;Travel-Rite?s;president.;?There?s no problem;cleaningup the engine,?he reported. ?In fact;we?vealready;got it;working. However,you appear;to haveaproblem;with;your transmission;because the bus won?t go;into second gear. Welooked;at thetransmission;and sawthat it?s damaged.?;Jennifer was;shocked tohear this and immediatelytelephoned;the automobile dealerfrom;whom she bought herbuses.;When heheard thestory, heunderstood the natureof theproblem.;?Thetransmission;was damaged when the bus was beingtowed,?hesaid. ?The;drivetrains of busesare;abitcomplicated. You;can?t;justhook them up to a tow truck;and start towingthem. Several steps haveto;be taken to preparethem;for;towing, and obviouslythe;tow truck driver didn?t;do this.?;Jennifer feltsick.;What began as an;innocent;refuelinghad turned into;adisaster.;Clients;had been inconvenienced. Her newbus had;been damaged.;All thiswas;happeningfar from;headquarters, so resolution;of thedispute with;the gas station, tow truck;company, andgaragewould;haveto becarried;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 controllableevent?;2. What;general;categoriesof;risk arebeingencountered here(e.g., business;risk)?;Explainyouranswer.;3. Howwouldyougoaboutconducting anexpost;factorisk assessment ofthis incident?;What conclusions might resultfrom;this assessment? What risk mitigation;steps should betaken;to avoidarepetition ofthis kind of;event in the future?;Assignment6;PartA.Scattergram Exercise;Units Processed per Hour;AverageNumber of Defects;300;50;400;42;500;40;600;55;700;80;800;95;The;table onthe rightexaminesthe number defectsassociatedwithdifferent levelsfor;processingwidgets.For;example, whentheprocessingspeed;reaches60widgetsper;hour,anaverage of;65;defectsare;encountered.;Draw ascatterdiagramshowingthe;relationshipbetweenprocessingspeed anddefects.Whatconclusionscanyou;derive;fromthe;diagram?;Part B. OfficeMove:Cause andEffect;(Fishbone);Diagram Exercise;You arein chargeof managing;aproject to relocate an officefrom;onebuildingto another.;Thenew buildingis;located;threekilometers;from the old one.Your job is;? to schedule;themove;? to;makesurethe;old buildingis preparedforthemove;(e.g., to reserveuseof;elevators);? to;makesurethe;new;buildingis prepared;for themove (e.g.;to reserveuseof elevators);? to;makesure;allemployees;are awareof their responsibilities to help;the;moveto go well;? to handle allthe financial arrangements associatedwith;the;move;? to handle allcontractualarrangements associatedwith;the;move;? to;arrangeforthe moving;companyto pack, transport;and unpack thefurnishings beingmoved.;Usingthe information;supplied here, create acause-and-effect;diagram;that;describes the moveeffort.
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