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Risk Management Methodologies: Accepting coffee packaging process.

Risk Management Methodologies: Accepting coffee packaging process.

Respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and use research to reinforce your ideas.

Apix is considering coffee packaging as an additional diversification to its product line. Here’s information regarding the coffee packaging project:

Initial investment outlay of $40 million, consisting of $35 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); NWC recoverable in terminal year
Project and equipment life: 5 years
Sales: $27 million per year for five years
Assume gross margin of 50% (exclusive of depreciation)
Depreciation: Straight-line for tax purposes
Selling, general, and administrative expenses: 10% of sales
Tax rate: 35%
Assume a WACC of 10%.

Should the coffee packaging project be accepted? Why or why not? Compute the project’s IRR and NPV.

In addition, answer the following questions:

Do you believe that there was sufficient financial information to make a solid decision on what to do?
Was there further financial information that you required that was not provided to you?
What financial figure do you believe was the determinant to your decision and why?
How would you be able to apply this particular financial information to other situations?
Discuss risk methodologies used in capital budgeting.

Many risk and vulnerability analysis methods exist. Although similar in nature, security professionals should be aware of the basics of these differing methodologies even if they are not involved directly in the function they assess.

Operational Risk Management

The FDA is responsible for the safety of meals manufacturing, importation, warehousing, travelling and circulation in the states. This agency has adopted the Operational Risk Management (ORM) method to help ensure that food assets remain safe from attack.

ORM is definitely an technology-structured risk management process made use of by the Federal Aviation Supervision and also the military to evaluate the safety and threat to current techniques. It is a tool designed to help identify operational risks and benefits to determine the best course of action for any given situation. It is defined as the risk of loss resulting from inadequate or failed processes, people and systems, or from external events. It is similar to other risk management methods in that it identifies hazards and determines the impact of food safety through estimating the probability and severity of an attack, allowing those responsible to focus on the worst hazard first. The FDA defines it as a defensive vulnerability assessment tool to identify points in a system that are most susceptible to terrorist attack and to design preventative measures to reduce risks. It uses a six-step process that includes identifying the hazards, assessing the risk, analying risk control measures, making control decisions, implementing risk controls, and supervising and reviewing.

Recognize the Hazards–The 1st step examines each exercise within a process or stream of actions and events and identifies the connected risks. ORM defines a hazard as any real or potential condition that can cause degradation, injury, illness, loss of equipment, or property damage. In the case of restaurant food security, a process may include the placement of food in a salad bar. The associated hazards include intentional contamination with bacteria, the placement of sharp objects inside the food, or the introduction of a poison.

Evaluate the Risk–Hazard likelihood, intensity, and visibility (the volume of individuals or sources influenced by a particular celebration or cumulative activities) are decided with regards to their impact on individuals and food security. ORM uses the probability categories of frequently, likely, occasional, seldom and unlikely. In the context of food security, each probability term has a definition. Frequently takes place often, and persons are continuously exposed. Likely takes place several times, and persons are regularly exposed. Occasional will happen, and exposure is sporadic. Seldom may happen, and exposure is infrequent. Unlikely likelihood and exposure are rare. Severity is categorized as catastrophic, critical, moderate or negligible. Catastrophic is a complete business failure or loss of facility asset due to attack resulting in fatalities. Critical is major business impact resulting from severe illnesses or incident. Moderate is minor business impact resulting from minor illnesses or incident. Negligible is less than minor business impact or illness. Risks are then ranked using a matrix.

Analyze Risk Management Measures–This stage signifies the growth of danger handle steps to minimize, avoid, manage, or remove the risk or decrease its likelihood or coverage.

Make Control Decisions–In the ORM strategy, decision producers that can put into action the control procedures are determined. ORM does not assume this is a singular person or department.

Apply Threat Controls–Once the controls and others accountable for the application of your regulates are recognized, the process of undertaking protective steps commences. Implementation strategies are developed that define individual responsibility, accountability, and involvement. ORM allows for different people to implement the controls based on severity.

Supervise and Review–Once controls have been in position, their performance is looked at and reevaluated. Additional assessment is completed as the system changes. The following principles apply to all stages of the ORM process: Accept no unnecessary risk. Unnecessary risk comes without a commensurate return in terms of benefits or opportunities.

Make chance selections at the appropriate degree. Making risk decisions at the appropriate level establishes clear accountability. The decision maker is the person who can allocate the resources necessary to implement controls or is authorized to accept risk.

Take danger when the positive aspects over-shadow the price. All identified benefits should be compared with all identified costs. Balancing costs and benefits can be a subjective process.

Incorporate ORM into organizing in any way degrees. The later changes are made in a process of planning and executing an operation, the more expensive and time-consuming they can become.

A charitable trust that flies disadvantaged and prone folks for health care purposes is employing dome video cameras with a facility within Houston Hobby International airport.

Angel Air travel South Central aids people who do not have usage of standard transport or who are too ill to become driven or take flight on a industrial service. Private pilots volunteer their planes and time to take people from their local airstrip to hospitals and clinics in other cities, often combining in relays so that a journey of thousands of miles can be made.

Dealing with its spouse ADI, protection online video merchant Rainbow generously donated six vandal-confirmation hammer challenging dome digital camera devices for use at Houston Hobby’s hangars as well as a new 1,500 sq ft premises where sufferers hold out in privacy for transport in addition to their pilots examine paths within a preparation room.

Our prime-solution colour dome is designed for any program such as an air-port, school or civic area where there is a have to safeguard your camera from accidental or purposeful blows. Integrators recognize the benefits of the dome’s 3-D gimble bracket, which allows the user to pan, tilt and rotate the camera towards the side, so making wall mounting more effective.

The real estate features a half-tint polycarbonate dome, is IP66 ranked and may deal with heavy affect. In all but extreme contacts only the dome is scratched while the camera remains intact.

Angel Trip South Main flew 3,000 quests in 2005, working from Texas, Arkansas, Louisiana, Oklahoma and parts of New Mexico, Mississippi and Traditional western Tennessee. The charity also organizes general humanitarian flights and was active in the aftermath of Hurricane Katrina when its pilots demonstrated exceptional dedication.

Lots of the passengers taking the South Core air flights acquire treatment with a cancer heart throughout the University of Texas or even the Texas Children’s Medical facility in Houston. On arrival at their destination airport, patients are met by a ‘ground angel’ and driven to the medical facility.