Question 1
Hewtex Electronics manufactures two products - tape recorders and electronic calculators - and sells them nationally to wholesalers and retailers. The Hewtex management is very pleased with the company's performance for the current fiscal year. Projected sales through December 31,20x7, indicate that 70,000 tape recorders and 140,000 electronic calculators will be sold this year. The projected earnings statement follows: Hewtex Electronics Projected Earnings Statement For The Year Ended December 31, 20x7 Tape Electronic Recorders Calculators Total Total Amount Per Amount Per Total (000's) Unit (000's) Unit (000's) Sales $1,050 $15.00 $3,150 $22 50 $4,200.00 Production costs: Direct materials 280 4.00 630 4.50 910.00 Direct labor 140 2.00 420 3.00 560.00 Variable overhead 140 2.00 280 2.00 420.00 Fixed overhead 70 1.00 210 1.50 280.00 630 9.00 1,540 11.00 2,170.00 Gross margin $ 420 $ 6.00 $1,610 $11.50 2,030.00 Fixed selling and administrative 1,040.00 Net income before income taxes 990.00 Income taxes (55 %) 544.50 Net income $ 445.50 It shows that Hewtex will exceed its earnings goal of 9% on sales after income taxes. The tape recorder business has been fairly stable the last few years, and the company does not intend to change the tape recorder price. Competition among manufacturers of electronic calculators has been increasing, however. Hewtex's calculators have been very popular with consumers. In order to sustain this interest in their calculators and to meet the price reductions expected from competitors, management has decided to reduce the wholesale price of its calculator from $22.50 to $20.00 per unit effective January 1, 20x8. At the same time, the company plans to spend an additional $57,000 on advertising during fiscal year 20x8. As a consequence of these actions, management estimates that 80% of its total revenue will be derived from calculator sales compared to 75% in 20x7. As in prior years, the sales mix is assumed to be the same at all volume levels. The total fixed overhead costs will not change in 20x8, nor will the variable overhead cost rates (applied on a direct labor hour base). However, the cost of materials and direct labor is expected to change. The cost of solid-state electronic components will be cheaper in 20x8. Hewtex estimates that material costs will drop 10% for the tape recorders and 20% for the calculators in 20x8. Direct labor costs for both products will increase 10% in the coming year, however. What volume of sales is required if Hewtex Electronics is to earn a profit in 20x8 equal to 9% on sales after income taxes? See Problem 2 - CVP Analysis on page 110,I calculated 40,741 units (tape recorder) and 81481 unites (calculator) with a required sales for profit of 9% of sales = $2,444,438 ... However, I backed into the problem again by using the formula Sales = fixed cost + variable cost + profit and it didn't work.,Thank you for your answer. One more quick question, for Year 20X7, is the product mix 33% and 67% percent? The problem states "As a consequence of these actions, management estimates that 80% of its total revenue will be derived from calculator sales compared to 75% in 20x7. As in prior years, the sales mix is assumed to be the same at all volume levels." so should the product mix be 25% and 75% in 20x7?
Question 2
Please Note: 1. This is an open book open notes exam. However, you cannot discuss the questions with anybody else including your classmates. Cheating is strictly prohibited in any format including the copy of answers from your classmates. Honest and honor is of the essence! 2. Totally there are 8 questions in the form of calculation or answering. Q1 and Q2 are 3 points each, other questions are 4 points each. Total is 30 points and it is worth 30% of the total quarter. If you have any questions regarding the exam problems, you can call me or send an email to me only in the first two days. 3. You can SUBMIT the answer sheets by hand writing (must be legible), by Word or by Excel document of Windows Operating System. Don?t use any other fancy software that cannot be opened by the Microsoft Windows operated PC. Otherwise, your submission cannot be and WILL NOT BE GRADED. Remember to write your NAME, STUDENT ID, and DATE on your answer sheets. Please label your answer sheets clearly by Q1, Q2,???etc. Make sure you upload your work to the designated area in Moodle System under week 7. When you upload, you are suppose to make all your answer sheets into one file then upload, NOT to chop into several files then upload. I permit you to upload 3 times just to give your 3 chances, in case you make mistakes during the first 2 times, you still have the last chance to accomplish your uploading. Midterm Exam ? STAT500-FA10-1900, UNVA, USA Prepared by Professor Victor J Chen, Ph.D., P.E. - 11/12/2010 Q1. What are the common Statistical issues? Q2. What are the Limitations of Statistics? Q3. In a city, the income tax department had the data as follows for the number of tax payers along with the range of income tax they paid for a particular year. Represent the data graphically to use the Histogram. Tax paid in $ ?000 20-24 25-29 30-34 35-39 40-44 45-49 Total No. of Tax Payers 45 130 200 65 45 15 500 Q4. The following distribution for overtime is given, please draw the Histogram and estimate the Mode from it. Overtime in hours 4-8 8-12 12-16 16-20 20-24 24-28 No. of workers 4 8 16 18 20 18 Q5. In a computerized entrance test, 20 candidates appear on a particular day. Their scores are: 9, 6, 12, 10, 13, 15, 16, 14, 16, 17, 14, 16, 24, 21, 22, 17, 18, 19, 18, 20. Find the Mode and the Quartiles of this data set. Q6. The following data are scores on a management examination taken by a group of 22 people: 88, 56, 64, 45, 52, 76, 54, 79, 38, 98, 69, 77, 71, 45, 60, 78, 90, 81, 87, 44, 80, 41. Find the Mean, Standard Deviation, and the 60th Percentile. Q7. Sample data for daily production rate of fiber body of spots car is given below: 17, 21, 18, 27, 17, 21, 20, 22, 18, 23. The company production manager feels that a standard deviation of more than three bodies a day indicates unacceptable production rate variations. Explain whether this is acceptable? Q8. What are moments? Please indicate four moments by using their mathematical formula and give explanations.,hi i need this to be done by today 12 so please let me know if can do that otherwise i have go to some other site quickly thank you,hi this is only question you have answered please i need all the questions to be answered.please let me know if you have any questions
Question 5
I have a risk management project that is due on November 30, 2011. all instructions and the topic of my assignment is attached.,This project is due by Nov. 30, 2011 Risk Management Project ~ (200 points) Fall 2011 I choose inaccurate credit ratings for my risk management project, due November 30th, 2011. ? Inaccurate credit ratings You will be expected to research your topic dealing with the Financial Crisis and Risk. Your report will include a detailed summary of the materials you find during your research efforts as well as your analysis of the information included (from a risk management point of view). All materials included in the report will be cited and included on a Works Cited page. The content of the report will include but is not limited to: ? History of ? Present condition of ? Expected outcomes of The above information may come from experts in the field, government reports, speculation, your opinion, discussion in class, discussion with ?others?, etc. Wherever you get the material, it must be DOCUMENTED!! I. In grading, the following guidelines will be used: 1. Minimum five-page, double-spaced, typed report 2. Has the student performed adequate research on the case? 3. Is the research well documented? (Endnotes, work cited) 4. Does the writer fully comprehend the subject? 5. How well has the writer explained and analyzed the topic from a risk management perspective? (Without plagiarism) 6. is there part of the topic that should have been covered and was not? 7. Students are expected to demonstrate some original thought and observation dealing with the topic, based upon thorough research of previously and currently published material. Students are expected to utilize the following materials: Internet, books, texts, newspapers, other pertinent periodicals, interviews, and discussions. II. The following should be used as a GUIDELINE to paper content (suggested order): 1. Cover Page 2. Table of Contents 3. Introduction 4. Discussion a. History of b. Present condition of c. Expected outcomes of 5. Risk Analysis of 6. Summary and conclusions 7. Endnotes and Works Cited 8. Appendices The professor will be looking for ? Initiative: Motivated; involved student ? Creativity: Generated ideas/alternatives; creative visual materials; originality of analysis, research, and presentation ? Possible Cause Analysis: Identification of risks; awareness of related issues and social/economic/competitive environment; evaluation and analysis of risks (More to follow) The More to Follow: After reading and considering the following articles located on D2L (Risk Analysis & Risk Management; Porter?s Five Forces; and Contingency Planning): 1. Do you believe the entity your report is based on used the risk assessment process based on the four basic choices in risk management? 2. Did the entity have a ?Plan A? as discussed in Contingency Planning? 3. Did ?Plan A? work? 4. Did the entity have a ?Plan B? as discussed in Contingency Planning? 5. Did the entity ever use the following principles in its risk assessment process? (Contingency Planning) a. Address all business-critical operations b. Identify risks c. Prioritizing risks 6. If the entity had a contingency plan were any of the following guidelines taken into consideration? (Contingency Planning) a. Your main goal is to maintain [economic] operations b. Define time periods c. Identify the trigger d. Keep the plan simple e. Consider related resource restrictions f. Identify everyone?s needs g. Define ?success? h. Include contingency plans in standard operating procedures i. Manage your risks j. Identify operational inefficiencies 7. Do you believe research your topic dealing with the Financial Crisis and Risk was really a possible cause of the Financial Crisis of 2007 to Present? 8. Are the actions currently being taken ?correcting? the Financial Crisis? Risk Analysis & Risk Management Evaluating and Managing the Risks You Face Almost everything we do in today's business world involves a risk of some kind: customer habits change, new competitors appear, factors outside your control could delay your project. But formal risk analysis and risk management can help you to assess these risks and decide what actions to take to minimize disruptions to your plans. They will also help you to decide whether the strategies you could use to control risk are cost-effective. How to use the tool: Here we define risk as 'the perceived extent of possible loss'. Different people will have different views of the impact of a particular risk ? what may be a small risk for one person may destroy the livelihood of someone else. One way of putting figures to risk is to calculate a value for it as: risk = probability of event x cost of event Doing this allows you to compare risks objectively. We use this approach formally in decision making with Decision Trees. To carry out a risk analysis, follow these steps: 1. Identify Threats: The first stage of a risk analysis is to identify threats facing you. Threats may be: ? Human - from individuals or organizations, illness, death, etc. ? Operational - from disruption to supplies and operations, loss of access to essential assets, failures in distribution, etc. ? Reputational - from loss of business partner or employee confidence, or damage to reputation in the market. ? Procedural - from failures of accountability, internal systems and controls, organization, fraud, etc. ? Project - risks of cost over-runs, jobs taking too long, of insufficient product or service quality, etc. ? Financial - from business failure, stock market, interest rates, unemployment, etc. ? Technical - from advances in technology, technical failure, etc. ? Natural - threats from weather, natural disaster, accident, disease, etc. ? Political - from changes in tax regimes, public opinion, government policy, foreign influence, etc. ? Others - Porter's Five Forces analysis may help you identify other risks. This analysis of threat is important because it is so easy to overlook important threats. One way of trying to capture them all is to use a number of different approaches: ? Firstly, run through a list such as the one above, to see if any apply ? Secondly, think through the systems, organizations or structures you operate, and analyze risks to any part of those ? See if you can see any vulnerabilities within these systems or structures ? Ask other people, who might have different perspectives. 2. Estimate Risk: Once you have identified the threats you face, the next step is to work out the likelihood of the threat being realized and to assess its impact. One approach to this is to make your best estimate of the probability of the event occurring, and to multiply this by the amount it will cost you to set things right if it happens. This gives you a value for the risk. 3. Managing Risk: Once you have worked out the value of risks you face, you can start to look at ways of managing them. When you are doing this, it is important to choose cost effective approaches - in most cases, there is no point in spending more to eliminating a risk than the cost of the event if it occurs. Often, it may be better to accept the risk than to use excessive resources to eliminate it. Risk may be managed in a number of ways: ? By using existing assets: Here existing resources can be used to counter risk. This may involve improvements to existing methods and systems, changes in responsibilities, improvements to accountability and internal controls, etc. ? By contingency planning: You may decide to accept a risk, but choose to develop a plan to minimize its effects if it happens. A good contingency plan will allow you to take action immediately, with the minimum of project control if you find yourself in a crisis management situation. Contingency plans also form a key part of Business Continuity Planning (BCP) or Business Continuity management (BCM). ? By investing in new resources Your risk analysis should give you the basis for deciding whether to bring in additional resources to counter the risk. This can also include insuring the risk: Here you pay someone else to carry part of the risk - this is particularly important where the risk is so great as to threaten you or your organization's solvency. 4. Reviews: Once you have carried out a risk analysis and management exercise, it may be worth carrying out regular reviews. These might involve formal reviews of the risk analysis, or may involve testing systems and plans appropriately. Key points: Risk analysis allows you to examine the risks that you or your organization faces. It is based on a structured approach to thinking through threats, followed by an evaluation of the probability and cost of events occurring. As such, it forms the basis for risk management and crisis prevention. Here the emphasis is on cost effectiveness. Risk management involves adapting the use of existing resources, contingency planning and good use of new resources. From: http://www.mindtools.com/pages/article/newTMC_07.htm Porter's Five Forces Assessing the Balance of Power in a Business Situation The Porter's 5 Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into. With a clear understanding of where power lies, you can take fair advantage of a situation of strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an important part of your planning toolkit. Conventionally, the tool is used to identify whether new products, services or businesses have the potential to be profitable. However it can be very illuminating when used to understand the balance of power in other situations too. Understanding the Tool: Five Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. These are: 1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, and so on. The fewer the supplier choices you have, and the more you need suppliers' help, the more powerful your suppliers are. 2. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you. 3. Competitive Rivalry: What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don't get a good deal from you. On the other hand, if no-one else can do what you do, then you can often have tremendous strength. 4. Threat of Substitution: This is affected by the ability of your customers to find a different way of doing what you do ? for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power. 5. Threat of New Entry: Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it. These forces can be neatly brought together in a diagram like the one below: Using the Tool: To use the tool to understand your situation, look at each of these forces one-by-one and write your observations on our free worksheet which you can download here. Brainstorm the relevant factors for your market or situation, and then check against the factors listed for the force in the diagram above. Then, mark the key factors on the diagram, and summarize the size and scale of the force on the diagram. An easy way of doing this is to use, for example, a single "+" sign for a force moderately in your favor, or "--" for a force strongly against you (you can see this in the example below). Then look at the situation you find using this analysis and think through how it affects you. Bear in mind that few situations are perfect; however looking at things in this way helps you think through what you could change to increase your power with respect to each force. What?s more, if you find yourself in a structurally weak position, this tool helps you think about what you can do to move into a stronger one. This tool was created by Harvard Business School professor, Michael Porter, to analyze the attractiveness and likely-profitability of an industry. Since publication, it has become one of the most important business strategy tools. The classic article which introduces it is "How Competitive Forces Shape Strategy" in Harvard Business Review 57, March - April 1979, pages 86-93. Example: Martin Johnson is deciding whether to switch career and become a farmer - he's always loved the countryside, and wants to switch to a career where he's his own boss. He creates the following Five Forces Analysis as he thinks the situation through: This worries him: ? The threat of new entry is quite high: if anyone looks as if they?re making a sustained profit, new competitors can come into the industry easily, reducing profits. ? Competitive rivalry is extremely high: if someone raises prices, they?ll be quickly undercut. Intense competition puts strong downward pressure on prices. ? Buyer Power is strong, again implying strong downward pressure on prices. ? There is some threat of substitution. Unless he is able to find some way of changing this situation, this looks like a very tough industry to survive in. Maybe he'll need to specialize in a sector of the market that's protected from some of these forces, or find a related business that's in a stronger position. Key points: Porter's Five Forces Analysis is an important tool for assessing the potential for profitability in an industry. With a little adaptation, it is also useful as a way of assessing the balance of power in more general situations. It works by looking at the strength of five important forces that affect competition: ? Supplier Power: The power of suppliers to drive up the prices of your inputs. ? Buyer Power: The power of your customers to drive down your prices. ? Competitive Rivalry: The strength of competition in the industry. ? The Threat of Substitution: The extent to which different products and services can be used in place of your own. ? The Threat of New Entry: The ease with which new competitors can enter the market if they see that you are making good profits (and then drive your prices down). By thinking about how each force affects you, and by identifying the strength and direction of each force, you can quickly assess the strength of your position and your ability to make a sustained profit in the industry. You can then look at how you can affect each of the forces to move the balance of power more in your favor. http://www.mindtools.com/pages/article/newLDR_51.htm Contingency Planning Developing a Good 'Plan B' Fires, floods, tornadoes ? these are the things we often connect with contingency planning. But what if your main supplier suddenly goes bankrupt? Or, what if your entire sales force gets sick with food poisoning at your annual sales conference? Or, your payroll clerk simply calls in sick on payroll day? These things can all cause confusion and disorder if you haven't prepared for them properly. Contingency planning is a key part of this preparation. As you see, contingency planning is not just about major disasters. On a smaller scale, it's about preparing for events such as the loss of data, people, customers, and suppliers, and other disruptive unknowns. That's why it's important to make contingency planning a normal part of your everyday business operations. Risk Assessment The need for contingency planning emerges from a thorough analysis of the risks that your organization faces. It's also useful in thinking about new and ongoing projects: what happens when 'Plan A' doesn't go as expected? Sometimes Plan A simply means 'business as usual.' Other times, with more sophisticated risk management plans, Plan A is your first response to deal with an identified risk ? and when Plan A doesn't work, you use your contingency plan. Use these principles in your risk assessment process: ? Address all business-critical operations ? No matter where your contingency planning starts, a good plan identifies critical business functions, and it outlines a way to minimize losses. ? Identify risks ? The first part of an effective risk analysis is to identify the various risks that your business may face. What has the potential to significantly disrupt or harm your project or business operations? The end result of a risk analysis is usually a huge list of potential threats. If you try to produce a contingency plan for each, you may be overwhelmed. This is why you must prioritize. ? Prioritizing risks ? One of the greatest challenges of contingency planning is making sure you don't plan too much. You need a careful balance between over preparation for something that may never happen, and adequate preparation so that you can respond quickly and effectively to a crisis situation when necessary. Risk Impact/Probability Charts help you find this balance. With these, you analyze the impact of each risk, and you assign a likelihood of it occurring. Then it's easier to determine which risks require the expense and effort of risk mitigation. Business processes that are essential to long-term survival ? like maintaining cash flow, staff support, and market share ? are typically at the top of the list. Note that contingency planning isn't the only action that emerges as a result of risk analysis ? you can manage risk by using existing assets more effectively or by investing in new resources or services that help you manage it (such as insurance). Also, if a risk is particularly unlikely to materialize, you may decide to do nothing about it, and manage around it if the situation arises. Contingency Planning Challenges You should be aware of a few common obstacles as you begin your contingency planning process: ? People are often poorly motivated to develop a strong ?Plan B? because they have too much of an emotional investment in the ?Plan A? they want to deliver. Stress that Plan B should be properly thought-through. ? There?s usually a low probability of a crisis occurring, so people often don?t feel a sense of urgency to create a contingency plan, meaning that it gets stuck at the bottom of their To Do Lists. Unfortunately, this may mean that contingency planning ends up as a task that never gets done. ? Organizational politics can interfere with prioritizing risk, because many people may want to be seen as an essential part of recovery efforts. If you include all key business managers in the risk assessment and prioritization process, this may help you reach agreement. Developing the Plan Remember these guidelines when it's time to prepare your contingency plan: ? Your main goal is to maintain business operations ? Look closely at what you need to do to deliver a minimum level of service and functionality. ? Define time periods ? What must be done during the first hour of the plan being implemented? The first day? The first week? If you break down the plan, you're less likely to leave out important details. ? Identify the trigger ? What specifically will cause you to implement the contingency plan? Decide which actions you'll take, and when. Determine who is in charge at each stage and what type of reporting process they must follow. ? Keep the plan simple ? You don't know who will read and implement the plan when it's needed, so use clear and plain language. ? Consider related resource restrictions ? Will your organization be able to function the same way if you have to implement Plan B, or will Plan B necessarily reduce capabilities? ? Identify everyone's needs ? Have people throughout the company identify what they must have, at a minimum, to continue operations. ? Define 'success' ? What will you need to do to return to 'business as usual'? ? Include contingency plans in standard operating procedures ? Make sure you provide initial training on the plan, and keep everyone up-to-date on changes. ? Manage your risks ? Look for opportunities to reduce risk, wherever possible. This may help you reduce, or even eliminate, the need for full contingency plans in certain areas. ? Identify operational inefficiencies ? Provide a standard to document your planning process, and find opportunities for performance improvement. Disaster recovery specifics are beyond the scope of this article. For more information on this topic, Premium Members can listen to our Expert Interview with Kathy McKee, 'Leading People Through Disasters' (Premium Members). Maintaining the Plan After you prepare the contingency plan, you need to do several things to keep it practical and relevant - don't just create a document and file it away. As your business changes, you'll need to review and update these plans accordingly. Here are some key steps in the contingency plan maintenance process: ? Communicate the plan to everyone in the organization. ? Inform people of their roles and responsibilities related to the plan. ? Provide necessary training for people to fulfill these roles and responsibilities. ? Conduct disaster drills where practical. ? Assess the results of training and drills, and make any necessary changes. ? Review the plan on a regular basis, especially if there are relevant technological, operational, and personnel changes. ? Distribute revised plans throughout the company, and make sure the old plan is discarded. ? Audit the plan periodically: ? Reassess the risks to the business. ? Analyze efforts to control risk by comparing actual performance to the performance level described in the contingency plan. ? Recommend and make changes, if necessary. Key Points Contingency planning is ignored in many companies. Day-to-day operations are demanding, and the probability of a significant business disruption is small, so it's hard to make time to prepare a good plan. However, if you're proactive in the short term, you'll help ensure a quicker and more effective recovery from an operational setback in the long term, and you may save your organization from failure in the event that risks materialize. A contingency planning process also helps you gain significant insight into the risks your organization faces. This enables you to develop an effective planning strategy that will immediately add value to the business. Contingency planning requires an investment of time and resources, but if you fail to do it ? or if you do it poorly ? the costs could be significant if a disaster happens. http://www.mindtools.com/pages/article/newLDR_51.htm,Minimum five-page, double-spaced, typed report
