Business Finance - Management QSO 349 Homework ( week 5 )

In response to your peers' posts, comment on whether you agree or do not agree with the identified risks and plans for mitigation or avoidance.

To complete this assignment, review the Discussion Rubric PDF document.

________________________________________________________________________ Peer 1 :

Alyssa Hammers

Hello all,

In our textbook, procurement risk is defined as, "a measure of the probability and consequence of not achieving a defined project goal" (Lindstrom, 2015). In the first case example, two parents were looking to buy their sixteen-year-old daughter a car. Some potential risks that could be associated with buying a new car include unclear requirements, timelines, or budgets. For example, the family ran into a risk during the selection process. Abbi wanted one model for X reasons; however, her parents redirected the conversation because they valued safety above her bells and whistles. This was a communication breakdown of what requirements the car had to fulfill to be considered. Another potential risk (for buying a car in general) is that you come across something perfect, but it is more expensive than what the initial budget had planned for. Do you buy the perfect car for more money? Or do you stick to the budget? Lastly, deciding to order a model from the dealership could make the process much longer. If they had been under any kind of time constraint this would have posed an issue. To avoid this, they could have bought the Prius outright. But the timeline extension would have had to be considered.

Thanks for the read!

Alyssa.

___________________________________________________________________________

Peer 2 :

Brooke Anderson

Hello Classmates,

This Case Example begins with Bill and Sheila’s daughter Abby, turning 16 years old. Shortly after this, the family makes the decision that they are going to purchase a brand-new car for Abby. The requirements of this procurement were: -high safety rating, -4 door sedan model, -brand new model verses used, and -the driver of vehicle likes it and is happy to drive it every day. In the end, they decided to purchase the model C2 Toyota Prius for Abby. One potential risk that could negatively impact the families purchase of the desired car is, if they did not factor in that the Prius has two motors and two batteries. Anytime the car needs maintenance, Bill won’t be able to do any of it because he is unfamiliar with hybrid motors. Maintaining the vehicle will cost more. The potential impact of this risk is that Bill and Sheila decide they need more time to re-think things and Abby still has no car to drive. One mitigation tactic that could be used is that Bill works a deal out with the car salesman. He adds in 24 months of free oil changes and drops the cost of their best, new vehicle, extended warranty coverage. Properly identifying as many potential project risks is important to project success, because then they are accounted for within the project budget, schedule, communications, etc.

Have a fantastic week!

Brooke