Risk Management Plan


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The purpose of this document is to describe a risk management plan for an information system upgrade. This document outlines the processes that will be used in the identification, recording, discussion, and response to risks as well as the roles of the project team. Inadequate attention to risk brings about cost overruns, inadequate technical performance and schedule delays. The project risk plan will record the team’s decisions on risk management to establish a clear standard way for the actions to be taken. Moreover, the plan will be utilized throughout the project life.

Risks are the potential events that may occur in the course of a project, and if they occur would adversely affect the project scope, schedule, quality and/or resources. Further, when risks occur they bring with them consequences. Conversely, risk management is the process with which risk management planning, identification, analysis, response and control is done on a project to mitigate its effects. The goal and objective of risk management is to reduce the chances and effects of adverse events to the project objectives (Garvey, 2000).

The project manager will be responsible in the creation and maintenance of this project risk management plan throughout the project to maintain the appropriate levels of risk to meet the project’s objectives. And as such the project team members who may have questions regarding the document may consult the risk management officer. The project director will be tasked with reviewing and approving the risk management plan and thus any changes will have to be authorized by the project director.

Project Description and Objectives 

The scope and objectives for the Project are; to identify the risks that will affect the information system upgrade to ensure that the numbers do not rise as the project matures. Moreover, the probability if occurrence will be ascertained, followed by the degree of effect to the schedule, cost, scope, and quality following a priority. The risks are expected to impact the project in various categories of impact. The probability of occurrence, the categories affected, and the scope of their impact will form the basis for assigning the priority of risk. All risks will be monitored on a scheduled basis by the project risk management team and reported in the status report.

Aims, Scope and Objectives of Risk Process 

The aim of information system upgrade project risk process will be to manage all the foreseeable risks using the Active Threat and Opportunity Management, ATOM in an effective, proactive and appropriate manner so that the project can meet its objectives, while keeping the exposure to risk at acceptable levels. Acceptable risk for the information system upgrade is the amount acceptable to stakeholders, such as project sponsor with regard to how high threats are present in the project, or the maximum acceptable threat P-1 score and minimum acceptable opportunity P-1 score, or the extent of allowable delay or additional cost (Hillson & Simon, 2012).

Moreover, the risk will aim to engage all project stakeholders applicably, enhancing ownership and buy-in to the project itself as well as to risk management actions. Information based on risk will be communicated to the project stakeholders appropriately and in a timely way for modification of the project strategy as exposure to risk intensifies. Further, the process of risk management will allow the project team and other stakeholders to the most risky project areas according to the ATOM module to achieve the project objectives. The process is intended to mitigate internal risks, program risks and business risks. Included in the project are the management, technical, and external risks.

During the project period, risk factors and events will be brought to the attention of the information system upgrade project manager via written communication. The project manager is responsible for logging the risk into the register, which would include; probability of event occurrence, schedule impact, which is the duration of time that a risk factor could affect the schedule due to delays in upgrade. Further, the register will include scope impact the risk will have on the project’s accomplishments. Quality impacts will also be recorded as work or project quality may go down during the process of engagement, for instance overruns may result in financing problems thus affecting the project size (Hillson & Simon, 2012). Cost impact of the risk event will also be registered in case it occurs as it affects the project budget.

The project risk management aims to identify, analyze, and respond to the imminent project risks. The project will endeavor to maximize the probability and consequences of positive events as well as mitigate the likelihood and significance of adverse events that project objectives (Garvey, 2000). Moreover, it will define how the project management team will handle the risks to achieve the goals.

Project Size 

The project is medium since it has a budget of less than $5million and more than $50,000 in the level of risk management process. However, criteria have to be generated to assess with the closest description selected and the corresponding score recorded. The project strategic importance will provide major contribution to business objectives thus a criterion value of 8. The commercial and contractual complexity will have a minor deviation from the existing commercial practices thus a criterion of 4.

Further, the external constraints and dependencies will have some external influence on the elements of the project at a criterion of 4. The requirement stability will entail some uncertainty and minor changes during the project at a criterion of 4. Conversely, the technical complexity will ensure a novel project with some innovation thus a criterion of 8. The project will entail a standard regulatory framework as market sector characteristics at a criterion of 4. Further, the project has a small value of less than $250,000 and a duration of 6 months thus a criterion of 2 and 4 respectively. The resources assigned will consist of a medium in-house project team and will have acceptable exposure to post-project liabilities at criteria of 4 on both. This project will thus be a medium hence a standard ATOM risk management process will be used.

The ATOM process to be used for the information system upgrade will consist of; initiation, which will start with a clarification and recording of objectives for the project on assessment, and a definition of the details of the risk process awaiting implementation, as well as documenting the results in a risk management plan (Hillson & Simon, 2012). This will be followed by identification. Identification consists of exposure and documentation of all risks likely to affect the project objectives in a positive or negative manner.

An assessment will be done in both qualitative and quantitative manner showing the risks individually for comprehension and prioritization and effecting of the risks on project outcome to ascertain the areas more prone risks respectively. Moreover, a response planning is necessary to ascertain the necessary strategies and actions for dealing with identified risks. A report will also be necessary to communicate the dynamic status of risk concerning the project to all the stakeholders. Thereafter, implementation should follow to check the effectiveness of the agreed response strategies and actions. After implementation, a review will be necessary involving an update the risk assessment at regular intervals through a series of major and minor reviews. A post-project review to see what lessons can be learned for risk management improvement as well as general project management (Bartlett, 2004). 

The initiation phase will be completed before the project starts followed by the other steps, which will be cyclic on a regular basis throughout the project life. The first risk assessment will be completed within the first month of the project start with reviews being performed subsequently on a weekly basis.

Risk Tools and Techniques

The following tools and techniques will be utilized in the support of the risk management process on the information system upgrade project. Initiation, risk management plan, identification of risks for both threats and opportunities and the following techniques will be used. The first will be brainstorming with all the project team members in addition to the representatives of the key stakeholders. An analysis of the project’s assumptions and constraints will be carried out as well as a review on the standard risk checklist (Turner, 2014).

Moreover, an ad hoc risk identification by the team members will be carried out at any stage during the project duration. Further, an initial risk register will be made to record the foreseeable risks for further assessment. In the critical assessment process, probability and impact assessment for the identified risks will be carried out with the project-specific scales. The risks will be categorized with use of the standard risk breakdown structure to ascertain the exposure patterns and the risk register update will be prepared to include assessment data.  

The tools and techniques for qualitative analysis will include; risk probability and impact assessment. This will be used in the investigation of the likelihood that each specific risk will occur and its potential impact on the information system upgrade project objectives, for instance quality, cost, performance, schedule while defining it in levels through interviews and meetings with the project stakeholders with documentation of the results being done.

Probability and matric impact will also be performed to rate the risks for further qualitative analysis with rules specified by the company. Another technique will be risk categorization to ascertain the areas of the project most vulnerable to risks. The risks will be grouped according to their root cause to aid in the development of effective risk responses. Risk urgency assessment will be done in combination with the risk ranking gotten from the probability and impact matrix to obtain the final risk sensitivity rating, whereby those risks that require a short-term responses will be addressed urgently. Moreover, expert judgment will be sought from the project director through an interview as he has handled more projects and is experienced (Garvey, 2000).

Data will be gathered and represented using interviews and probability distributions. The interviews will be carried out with a purpose to gather an optimistic, pessimistic and most likely scenarios. Moreover, the probability distributions will be continuous in simulation and modeling to represent the uncertainty in values, for instance task durations and project cost components. However, discrete distributions will also be used to represent the risky events. 

The quantitative risk analysis and modeling techniques to be used in the project will consist of; sensitivity analysis to determine the risks which may have the most potential impact on the information system upgrade project. The effects of varying the inputs of a mathematical model on the model’s output will be considered. Moreover, the effect of the uncertainty of the project elements to the project objectives holding other risky elements at the baseline values will be scrutinized. 

Further, the expected monetary value analysis will be conducted to calculate the average outcome in relation to future uncertainties with the positive values representing opportunities while the negative values represent threats and risks. Modeling and simulation will be conducted quantitatively to translate the specific detailed risks of the information system upgrade into their potential effect on project objectives using the Monte Carlo simulation (Bartlett, 2004).

A cost risk analysis will be necessary to estimate the cost as input values chosen on a random basis according to the probability distributions of the values and the total cost calculated. Further, a schedule risk analysis will be done using duration estimates and network diagrams as input values chosen on a random basis too according to the probability distributions of the values with a calculation of the completion date done. The project director will also be consulted through interviews for expert judgment to identify the potential cost and schedule impacts, ascertain the probabilities. The expert judgment will also be used to interpret data, pinpoint the weaknesses of the tools and their strengths to ascertain the most appropriate tool according to the organization’s structure and capabilities.

Risk identification will be carried out by the project team, the appropriate stakeholders, whereby the environmental factors, project management plan and organizational culture will be evaluated for inclusion in the project scope (Kendrick, 2009). Moreover, keen attention will be given to the project deliverables, constraints, cost and effort estimates, assumptions, and the resource plan. Further, a risk management log will be created and updated as required and stored electronically at the company website.

Risk Reviews and Reporting 

The exposure of risk on the information system upgrade project will be on constant review during the project life on a monthly basis for major reviews and weekly for minor reviews. This will be appropriate in identifying and assessing new risks as well as reviewing the existing risks and a progress on the agreed action assessed too with new actions being performed where necessary. The risk process effectiveness will be reviewed to ascertain whether any alterations in approach, techniques and tools are necessary. As soon as the project director and risk manager agree on the process changes, the risk management plan will be updated and reissued to reflect the revision process. This will be done on weekly and monthly basis.

Moreover, the risk director will issue a risk report monthly to the project sponsor after subsequent reviews. The project team and the stakeholders will be furnished with a copy of the risk register after each subsequent review, with a list of the risks and actions for which each one is responsible. Upon information systems upgrade project completion, a project lessons learnt report will be prepare with a risk section, which will give details of the generic risks probable to affect other projects and the effective responses from the current project.  

Probability and Impacts of the Risk Management Plan

All the risks identified will be subjected to assessment to ascertain the range of possible project outcomes with qualification being used to determine the risks that require urgent response and the ones to be ignored (Garvey, 2000). Qualitatively, the probability and impact of occurrence for each identified risk will be assessed by the project director assisted by the project team members using; probability, whereby it will be denoted by high probability of greater than 70 percent, medium being between 30 percent and 70 percent, while low is below 30 percent probability of occurrence.

Impact will be also categorized as high for risks that have the potential to greatly impact the project cost, schedule and performance. Medium impact will be assigned to risks that have the potential to slightly impact the project cost, schedule and/or performance while the low impact will denote the risks with relatively little impact on project cost, schedule and/or performance. The risks that have high and moderate impact as well as high and moderate probability will have response planning which may involve both a risk mitigation and a risk contingency plan.

The assessment of risk event’s probability will reflect the team’s best judgment depending on the degree of belief that the risk is likely or unlikely to occur. Subjective probabilities are important in this project as such opinions change with time. The impact on cost will be the potential effect on the overall budgeted cost of the information system upgrade project. However, the cost impact area should consist of the considerations for the effect of the risk on continued sponsor funding. The impact on the schedule will entail the risk’s potential impact on the information system upgrade project schedule. Moreover, the technical performance impact area will be the risk’s potential effect on the ability of the project to achieve the overall functional and operational performance requirements (Larson & Gray, 2014).  

Risk Thresholds of the Risk Management Plan

The amount of risk that is acceptable in this project will be a minimum overrun in schedule and cost and other minor changes to the scope of the information system upgrade project. Any risk that increases the project’s cost by not more than 5 percent will be acceptable, but anything more than 5 percent will not be taken. The project team will use 5 percent as the measure of the level of risk exposure above which stringent action must be taken to address the risks and below which any risky event will be accepted (Kendrick, 2009). 

The risk thresholds will have to be determined to show when the project conditions will cross the 5 percent mark when a response is required. The thresholds will be determined urgently within the project plan to mitigate any chances of delays. However, the project team’s threshold may differ from that of the clients who need the software. However, establishing a preset value before the project can be implemented will save the project team time, frustration as well as additional delays and costs.


Principles of Economics

In the article, (Friedman, 2015) analyses the oil market as prices plummet to a six-year low as oil and fuel supplies rose to a record levels. This huge supplies in gasoline have brought fears over the strength of the global economic growth. The supply seems to outstrip demand, thus leading to lower prices. Further, increases in the supply of crude oil has been directly proportional to the supply of refined products. However, demand has decreased due to moderate winter weather leading to lowered purchases of heating oil. This has also affected the gasoline futures.

Friedman (2015) further notes that a rise in distillate quantities could be attributed to a temporary drop in exports. The consumer-driven economy is however expected to be strengthened by the cheaper gasoline prices. Moreover, during the previous year, when supplies fell, oil prices went up to above $100 a barrel. However, analysts and traders feel that the market will correct itself and prices shift upwards.

The market prices of consumer goods is affected by the stocks suppliers hold rather than the rate at which they are supplying such goods to the markets. The market is said to be at equilibrium if the suppliers are supplying the consumer goods at a rate equal to the consumer demand. However, if the supply to the stores surpasses the demand, then the suppliers will have to lower the prices or reduce supply to return the stock to the desired level (Mankiw, 2014).

The demand for gasoline is determined by the forces of demand and supply in the market. When prices go down, the demand increases. Prices go down due to a combination of factors, such as cold weather, less driving, increases in gas stock, ban on exports of crude oil, as well as peak processing at refineries. However, transportation cost and local taxes also determine the prices of gasoline in the U.S. market. A speculation on the future expectations on prices also determine the supply and demand of oil (Chang & Serletis, 2014).
Suppose, suppliers selling oil at the same price foresee a future increase in prices due to a looming shortage; they react by increasing prices to reap higher profits. If they fail to increase the prices, more people will buy the oil as vehicle owners and other oil users would purchase in plenty to keep for use during the shortage period. This shows that market-determined prices for oil are crucial in preventing shortages and optimizing the economic efficiency, thus strengthening the consumer driven economy as indicated by Friedman, (2015).

When the supply of oil and fuel goes up, prices decrease, causing an increase in the quantity of oil and fuel demanded. This causes a downward movement along the demand curve. Conversely, a reduction in the supply causes the prices to go up, thus decreasing the quantity demanded, which is denoted by an upward shift along the demand curve. However, at times a sharp increase in gasoline prices may lead to more purchases if the consumers feel that there will be shortages in the future (Chang & Serletis, 2014). This, to the contrary, increases the prices charged for oil. Thus, buyer expectation determine the quantity demanded of a product.

In perfect competitive markets like the local gasoline market, a single gas station has a limited choice on the price to charge. The price will be determined by the demand because if more customers are coming, then the station may increase their prices, thus making the customers turn to competitors for cheaper prices (Chang & Serletis, 2014). Therefore, the price the gas station receives, is independent of the quantity it chooses to sell. The marginal revenue is equivalent to the price of its output.

Mankiw, (2014) notes that a perfect competition is based on the assumptions that the market comprises of many buyers. Each buyer is assumed to have an insignificant impact on the market, thus acting as a price taker. Further, the buyer does not affect the prices charged for the commodities. Therefore, the consumer takes the price as charged and decides the quantity to buy. Moreover, the market is consistent of many sellers who, just like the buyers have an insignificant impact on the market and the prices charged, thus acting as price takers. Consequently, the seller takes the prices as given thus decides the quantity that will produce the greatest profits.

Moreover, it is assumed that firms selling in the market are free to enter and leave the market. As the market increases its attractiveness, sellers may enter while market unattractiveness may have some sellers exiting or continuing with the conditions. Further, the goods sold in a perfect competitive market are homogeneous and the consumer buys from any seller if they charge the same price. The buyers and seller are also assumed to have perfect information about the market, such as the prices being charged by other sellers (Mankiw, 2014).

It is however true that the oil-product prices decrease due to oversupply in the American market as Friedman, (2015) indicates. An increase in the supply of gasoline will automatically lead to a drop in prices as suppliers seek to clear their stocks. However, the market is expected to auto-correct itself thus prices going up as supply decreases. As the prices drop, more consumers will be willing to buy vehicles and other fuel users, such as lawnmowers, this will further increase the demand for gasoline, hence pushing the prices upwards.

Disease Control and Education Plan

HIV/AIDS is a viral disease that causes a breakdown of the body’s immune system leading to other opportunistic infections. It is transmitted in blood, breast milk, vaginal fluids, and semen and is commonly spread through unprotected sex and sharing of syringes and needles with infected people. Infected mothers can also pass the virus to their babies during birth or from breastfeeding (World Health Organization, WHO 2006). However, the virus is not transmitted by simple contact, for instance, hugging, kissing, or sharing of food utensils.

The Centers for Disease Control and Prevention, CDC estimates that more than 1.3 million people aged 13 years and above are living with the HIV virus in the United States. Moreover, 20.1 percent of the infected people are unaware that they are suffering from the disease (CDC, 2014). Further, the CDC estimates that more than 40,000 men and women become infected annually though new infection rates have remained steady over the decade. In the United States alone, more than 1.15 million people have been diagnosed with AIDS (Schwartländer et al., 2011). In African countries, young women are at greater risk of infection with prevalence in the ages of 15-24 being 16.9 percent. This is fueled by violence against women, poverty, and cultural practices that promote intergenerational sex.

HIV/AIDS was first noted in 1981 when mysterious cases of enlarged lymph nodes among gay men were reported by physicians in New York City. More cases followed involving Pneumocystis carinii pneumonia, a rare disease that is found in patients with severely suppressed immunity. Moreover, there were other cases of rare lung infections characterized by weakened immune system. Samples of HIV’s genetic code were used to trace its origin to 1920s Kinshasa, in the Democratic Republic of Congo due to contact with blood while handling bush meat. Though contained, the disease spread rapidly due to railway construction, whereby men outnumbered women leading to the sex trade. Moreover, travels to other parts of the world and population increase lead to more cases of HIV. A major outbreak occurred in central Africa in 1983 among both men and women. During the same year, AIDS cases were reported in 33 countries in the world while in the United States, 2807 cases were reported with deaths amounting to 2118 (CDC, 2014)

The United States government, through the Division for HIV/AIDS Prevention, DHAP has been involved in providing leadership and support for surveillance, prevention, and evaluation of evidence-based interventions to serve the affected people and those at risk of potential infection. Moreover, proper use of safety devices and barriers to prevent HIV exposure to the health care workers have also been recommended by the CDC, (2014). Further antiretroviral drugs are freely distributed to the infected people to contain the disease.

In the healthcare sector, workers are advised to assume that blood and other body fluids are subject to potential infection; thus they should use gloves, wash hands after contact with blood and fluids. Moreover, safety devices have been developed to prevent needle-stick injuries. Further, used syringes and other sharp instruments are disposed of properly to prevent accidental infections. The most crucial strategy for mitigating the risk of HIV transmission is prevention of any exposures, such as use of condoms and non-recycling of syringes and needles (WHO, 2006).

Objectives and goal set to control the disease include; reduction of new HIV infections, improvement of the health outcomes, such as HIV-related morbidity and mortality, and reduction in disparities in HIV incidence and health outcomes. Other objectives are; increasing the percentage of people living with HIV who know their serostatus to 90 percent, and decreasing the rate of perinatally acquired pediatric HIV vases by 25 percent. Such objectives were set to advance the goals, which include; increasing knowledge of the disease, reducing transmission and infection risk, increasing sustained engagement in medical care and treatment as well as increasing HIV viral suppression (CDC, 2014). Offer protection from discrimination to people living with the virus as well as provide counselling for the affected and infected.

The government took an initiative to prevent the acquisition and transmission of new HIV/AIDS infections as well as reduction in the spread of the disease and its impact by closely examining the proportion of people living with HIV in the individual stages of the HIV care continuum. This assisted in pinpointing the gaps existent in connecting people living with the disease to sustained, quality care. Through gap identification and improvement implementation, the government increases the proportion of people living with HIV who are on ARTs and are able to achieve the viral load suppression. Such initiative allows the infected people to live longer and healthy with reduced chances of infecting other people. Government agencies, such as the NIH, CDC, DoD, FDA, and the USAID are charged with improving and protecting the public health through vaccine research and development and distribution. A HIV vaccine has not yet been invented though pre-exposure prophylaxis is used for prevention in people with high risk of getting HIV.

To reduce health risks, joint planning should be strengthened to levels where activities are strategic and aligned with the federal and state governments as well as departmental priorities. Moreover, the initiative should seek to reinforce efforts in sharing and applying research knowledge to policy and practice in the advancement of public health action (Schwartländer et al., 2011). Further, initiative partners should advance monitoring activities against work plans and develop adjustments based on learnings. The plan to mitigate the virus spread would work to ensure non-discrimination against the infected, recognition of gender equality as well as promotion of social dialogue to ensure cooperation and trust with the infected.

To ensure that the public recognize pathogens are related to the cause of diseases, awareness should be created. The plan would ensure that the public get the necessary education on pathogens, causes and prevention of diseases. Moreover, the plan would ensure that all children under the age of five are vaccinated against diseases, drinking water is treated all the time to kill any pathogens that may be present. Further, all sewerage would be treated and disposed of safely in addition to ensuring food safety programs through inspections and regulation (Schwartländer et al., 2011). Signs and symptoms to watch out for in HIV are fever, sore throat, fatigue, swollen glands, and rash, headache, and muscle pains.

The measures to ensure that HIV/AIDS is combated are behavioral, biomedical, and structural. The behavioral measures include; sex education, safe infant feeding guidelines, psycho-social support, and discrimination reduction programs (WHO, 2006). The biomedical measures include; testing and treatment of STIs, availing of condoms and antiretroviral drugs, and voluntary male circumcision. The most effective control measures to date have abstinence from sex, faithfulness to partners, and contraceptive use.
However, through the government agencies, diagnostic efforts are being made, such as inventions of HIV RDTs, CD4 and T-cell counting technologies, HIV P24 ELISA kit for approval by the WHO. FDI, for instance, has been on the forefront in funding and conducting HIV research, providing R&D regulatory expertise as well as building HIV R&D capacity. Conversely, the structural measures involve the enactment of laws to protect the rights of people living with HIV, and interventions to address gender, social and economic inequality. Further, decriminalization of sex work, homosexuality, and drug use would also help in controlling HIV/AIDS spread.

The plan’s role in mitigating HIV spread depends on the degree of information deployment. Moreover, the plan would be guided by the estimates of cost-effectiveness for it to work well. Evidence points to the provision of ARV drugs to infected mothers to significant reduction in vertical transmission of the virus to children. Moreover, male circumcision and screening reduce the chances of contracting HIV.


Infections of the respiratory tract affect the nose, throat or lungs and are caused by virus, bacteria, or fungi. Infections of the upper respiratory tract include sinusitis, colds, throat infection, and middle ear infections, while those of the lower tract are pneumonia, influenza, and bronchitis. These infections are different though their coding can be confusing based on the similarities and acute versus chronic exacerbation.
ICD-10 chapter X gives guidelines on coding of respiratory system diseases with J09-J18 being the procedures for coding influenza and pneumonia. Pneumonia is classified by ICD-10 by the causing irritant or organism. Some distinguishing characteristics for pneumonia include occurrence by abnormal entry of fluids into the lower airways, chest x-ray showing infiltrates in right lower lobe only. A review of documentation for history of recent status post CVA, dysphagia, or recurrent pneumonia is another characteristic a coder would look at (Bowie & Schaffer, 2013). Moreover, if both aspirational and bacterial pneumonia exist, two codes are used to describe the condition.
Pneumonia has different categories, such as viral pneumonia, pneumonia due to Streptococcus pneumoniae, due to Haemophilus influenzae, Bacterial pneumonia, not elsewhere classified, pneumonia in disease classified elsewhere, and pneumonia organism unspecified. These differences are made so that the health caregiver can make the right diagnosis for the right disease. To know that the proper diagnosis is made, the coding guidelines are followed (Bowie & Schaffer, 2013).
The code for the specific organism should be assigned as identified, either by sputum culture or other record documentation. Further, codes are not assigned based on lab results only without documentation in the specific clinical manifestations and treatment record. Pneumonia, for instance Gram-negative is indicative of chronically ill and debilitated patients (Bowie & Schaffer, 2013). Viral pneumonia is detected through chest x-rays, pulmonary function tests, and lung scan.








Accounting for Business Acquisitions

An acquisition involves a combination of two or more companies to form a new company or corporation. When a company is acquired by another, it becomes wholly owned by the acquirer, but it may be kept as a separate entity in its pre-acquired form. Such acquisition is called limited absorption and the acquirer may sell off the acquired in future for a gain. Acquisition is done through purchase of the target’s shares until it owns the company either in full or in part. Moreover, acquisition may be hostile or friendly, but that depends on the shareholders’ decision on whether they are willing to sell their shares to the acquirer (Harrison, Horngren, Thomas, Berberich & Seguin, 2014). 

An example of an acquisition would be Allstate Corporation acquiring CarMax both of which are listed in the New York Stock Exchange. Allstate Corporation is the largest publicly held and third largest personal insurer in the United States with a net income applicable to common shares of $2761000 for the period ended September 30, 2014. CarMax on the other hand is the country’s largest used-car retailer, which was established in 1993 and for the period ended November 30, 2014 it made a net income of $553,429. CarMax has more than 140 stores across the country and has sold more than 20 million cars thus its success may be an attractive venture for Allstate Corporation.

The strategic rationale behind acquiring CarMax would be to gain a customer base in the auto insurance which a lucrative venture to fuel Allstate’s plateauing market. CarMax would fit in as it is an expanding company in the business of used vehicles and as the economic hardship continue to weigh in on the public, people are shifting into buying cheaper used automobiles. Moreover, Allstate would benefit by developing a research and development on insurance consumption in the market especially for used vehicles. The move would also serve as a diversification strategy to venture into the automobile industry and instead of relying on home-made vehicles, cheaper car can be imported from overseas.

Moreover, Allstate Corporation may choose to acquire CarMax as a financial necessity whereby the company may want to increase its financial base and avoid loss of shareholder confidence thus acquiring the quickly rising CarMax would be viable solution. The corporation would benefit from the already existent auto customer base the target enjoys and provide insurance cover to such customers and halt them from going to a competitor. Allstate may acquire CarMax on a speculative rationale whereby it would sell it in future for a price higher than the acquisition price though this move may be risky as it might be subject to market conditions.

Acquisition of CarMax by Allstate Corporation would allow for enhanced cost efficiencies for the new entity. First, the corporation would benefit from economies of scale through reduced costs of office equipment and supplies when placing such orders (Harrison et al., 2014). Moreover, the company would eliminate redundant services, such as Accounting and Human resources, especially in the 51 percent or the 100 percent acquisition. Further, the corporation would benefit from positioning, whereby it would take advantage of the future opportunities to be exploited after the acquisition exercise. 

Allstate Corporation would also improve its market reach as well as the industry visibility when it acquires CarMax, which would be an added avenue for growing revenues and earnings. The market for auto insurance too increases thus expanding the sales opportunities available. Such expansion in sales, revenue and earnings would enhance the corporation’s standing in the investment sector as would become easier to raise capital as the company adds on its vastness (Faulkner, Teerikangas & Joseph, 2012).

U.S. GAAP stipulates that control is gained upon acquisition of 100 percent of the voting stock of a target company (Harrison et al., 2014). Allstate would report the investment in CarMax in consolidation, whereby the account balances from the two companies are merged in a prescribed form to represent a single entity. The assets, revenues, expenses, and liabilities of CarMax would be consolidated with those of Allstate Corporation. Conversely, 35 percent ownership would provide for the equity method of accounting where income would be recognized after being earned by CarMax. The investment would be recorded at its historic cost and the earnings would be at the percentage of the outstanding stock.

In preparing the financial statements after 100 percent acquisition, it would be important to calculate the return on assets to assess the financial health of the company.  It is the net income divided by the average total assets to ascertain the management’s efficiency in using the Allstate resources. For the 35 percent acquisition, investment-equity strategy would be best for determining the amounts reported within investors’ net income, changes in fair value, dividends received, and the reported investment balance (Harrison et al., 2014).

The 100 percent acquisition of CarMax would be more advantageous to Allstate Corporation especially in measuring the non-controlling interests either at fair value or at their proportionate interest in recognized net assets (Cartwright & Cooper, 2012). Goodwill would also be another benefit as the recognized amount of CarMax‘s identifiable assets. Moreover, 100 percent ownership would make sure that the corporation gains full control of the business and can sell it in future at a gain. 

From the management point of view, CarMax would allow for the benefits of decentralized management where it would have its own management team responsible to Allstate Corporation on a profit and loss basis. If the business is not making enough profits, it can thus be easier to sell it off than if were 35 percent owned as approval of CarMax shareholders would be needed. Allstate would also have the power to appoint and remove the majority of CarMax’s directors thus determining the financial and operating policies (Cartwright & Cooper, 2012).

In reporting CarMax’s net assets in the financial statements needed in the distribution of shares to the public in a public offering, calculation of the cost of fair value would be appropriate. This would provide a rational and unbiased estimate of the potential market price of the subsidiary’s assets. US GAAP specifies fair value as the amount at which a company’s assets could be sold or bought in a current transaction between parties or transferred to another party other than in a liquidation sale. The assets should be based on a mark-to-market value (Faulkner et al., 2012).

The fair value would be determined through an approximation of the market value of CarMax’s assets for which the market price cannot be determined. It would necessitate an identification of the market the business is operating. The valuation would entail the quoted prices of the subsidiary’s stock at the New York Stock Exchange where its stock trades. This information would be based on direct observations of transactions of the stock being valued. FAS 115 requires that investments accounted for under the cost method be adjusted to current fair value at the end of each financial year, in cases where the fair value is determinable (Fridson & Alvarez, 2011). The adjustments would be debited for gains in fair value at the end of the reporting period.


Sweet Leaf Tea: Strengths and Weaknesses of the Corporate Culture

Companies build identities and strong individual and corporate brands through communication entrenched in the strategic decision making processes. Moreover, communication needs to be meaningful, creative, transparent, sustainable and relevant to all the organization’s stakeholders. Through digital information and social media, consumers have become more educated about issues as well as getting more cynical about corporate intentions. However, companies have exploited corporate communication to their advantage, and an example of such companies is Sweet Leaf Tea.

Sweet Leaf Tea is a company that specializes in making premium and all-natural ready-to-drink beverages. Its success can be attributed to goodness and quality of their products, the commitment of the employees and customer engagement. The company uses product differentiation to distinguish its brands from those of their competitors through authentic goodness coupled with a culture that has enabled it attract the best team in the industry (Argenti, 2013).  

Sweet Leaf Tea enjoys strengths, such as a strong fan base who are passionate about the beverages that are localized to have a feel of their social community. This fan base has been exploited through music festival sponsorships, which are a part of the company’s marketing strategy. Moreover, the company runs text promotions and messages that drive the fans to its social media pages and blogs to see the pictures of the festival winners.

Further, the company enjoys support from the social media, which it uses to spread information about its new offers as well as engagement strategies and community management. The company enjoys an engagement rate of more than 7 percent annually. Communication is entrenched in the company’s culture as it has continuously relied on the loyal customers to boost word-of-mouth in the current markets. Events are also promoted through newsletters, company website, and other social networks. Corporate communication strategy plays a pivotal role in spelling out the details, aspects and future prospects of the company through the social media (Laws, 2014).

Moreover, the company has exploited its communication strengths by creating a communi-tea to give back to the community and strengthen its brands to customers who share the same values (Hebrews 13:16 KJV). Employees are a strength to the company and are treated as internal customers. They are recognized and rewarded for their contributions in creating quality products that are tasty and enhance wisdom from grandmother. The company uses this strength to connect with the target markets thus increasing the brand awareness.

However, businesses are also laden with weaknesses which hinder the proper running of the operations. One of the weaknesses is that the company does not have adequate facilities and knowledge to produce the raw ingredients for its products. It has since used Budweiser as a maker of its beverages. Moreover, the company is small in size making it hard to give cash to charities. This weakness is overcome through co-promotions and giving out beverages as in-kind donations for board meetings, fundraisers, and sponsor dinners hence cutting the event organizers’ expenses. 

Companies use corporate communication as a means of spreading business values, which is fostered through improved dialogue between the management and the employees. Corporate communication can be managed to achieve organizational objectives, albeit with difficulty (Miller, 2014). However, companies such as Sweet Leaf Tea has used it to their advantage by capitalizing on it as a strength and mitigating the weaknesses it possesses in the industry. The company has tried to manipulate the industry as much as possible with its resources, such as devoted employees, loyal customers and a strong corporate communication culture.

Operations Management

The cycle time is the average time required to complete a unit at a production process excluding waiting time. It is measured as time/unit.

Throughput rate is the average number of units processed over a time interval and is measured as units/time.

Based on the two applications, the special application is more efficient for it has an efficiency of 45 percent to produce twice the applications produced by basic process. The manager needs to reduce the throughput time by minimizing the time consumed by double checking, moving between stations, and in the mailroom. The result would be reduced lead time thus improving the delivery performance. Additionally, reducing the cycle time will produce a faster feedback cycles on improving the project thus increasing the velocity of awarding the projects. Further, the manager needs to facilitate productivity improvements and capacity improvements through reducing application time and increasing efficiency respectively (Chen et al., 2005).

 Moreover, the internal processes such as moving between stations, double checking and spending time at the mailroom should be minimized to improve the production efficiency of the processes so that customer satisfaction can be enhanced (Collier and Evans 2010, 130). Therefore, more funds for projects will be awarded in the process as the performance will have been improved.

Reduction of the work-in-progress to 4 and 7 for both basic and special applications respectively will reduce the flow time though with throughput being held constant. However, reduction of work-in-progress in line without altering any other variable will also lead to a reduction in throughput. A variability reduction effort is thus necessary to achieve a greater throughput using less work-in-progress. 

If the manager reduces the work-in-progress, such an option would be effective in addressing the short-term demand variations for it may require pulling of projects and orders out of the work flow and setting them aside. Consequently, as the work-in-progress declines, throughput time and efficiency drop thus the remaining applications become faster and better to work on, such that the applications pulled out of the workflow can be taken back to the process and completed in time (Bhattacharya 2014, 119). Therefore, by limiting the work-in-progress in the applications, it automatically shifts waiting time to another queue outside of the system thus reducing congestion and altering the actual investment in the applications.

With absolute lowest levels of work-in-progress possible, performance will be attained which will come as a result of mitigated lead time and improved efficiency (Jodlbauer 2005, 354-357). There will be improved application scheduling as a result of reduced application flow imbalances, producing bottlenecks and lesser throughput. The result is intermittent output, high inventory, reduced client time, and prolonged cycle times (Selcuk, Fransoo and De Kok 2008, 206-220).

). The standard time used is also useful for overhead absorption resulting in application production process through use of effective performance metrics.

Throughput time/ cycle time (basic) = 60 + 20 + 30 + 10 = 120 mins/application

Special = 100 + 60 + 30 + 30 = 220 mins/application.

Rate = 10 basic applics/120 mins = 0.083 applic/min = 4.98 applic/hr

20 special applics/220 mins = 0.091 units/ min = 5.46 applic/hr.

WIP= throughput rate * throughput time

Basic 0.083*120 = 9.96

Special 0.091* 220 = 20.02

Value added time basic = 60 mins non value added time (basic) = 120 mins

Value added time (special) = 100 mins, non-value added time (special) = 260 mins


Efficiency = value-added time/ throughput time = (basic) = 60/ 120 = 0.5

Special = 100/220 = 0.45


Nosocomial Infections


In the past, hospitals have viewed nosocomial infections as inevitable because since they could be treated and were seen as benign. In the event of severe cases, few legal claims were pursued as it was believed that hospital-acquired infections were not occasioned by negligence. Conversely, litigations leaned more on ensuring that treatment is given ignoring the reason behind how and why the infection was passed. However, this has changed as potential for exposures to liability for healthcare workers has been created (Septimusa et al., 2014). This follows the breakthrough that these infections are preventable through good infection control measures by the hospital. 

Nosocomial infections include any diseases that are acquired in healthcare facilities, whereby the patient must have been admitted for medical reasons but the infection (Laurent et al., 2012). Moreover, the patient must have had no signs of active or incubating infection, and may occur within 48 hours after admission, 3 days after discharge, or 30 days after an operation is carried out (Wick et al., 2012). Awareness of the infections has led to patients admitted into healthcare facilities to demand more from healthcare than ever before. Moreover, hospitals notify patients of any potential risks of getting infected as a way of showing transparency to clients.

It is estimated that over 2 million of the patients who go to seek medical attention in the United States hospitals catch hospital-acquired infections. The result is over 100,000 dying from such infections, expenses increase as patients overstay the hospital for an average of 16.1 more days than they would (Laurent et al., 2012). At Good Health Hospital there were four infections which occurred between July and October involving two elderly white female patients who had presented as diabetic. The other patients were Hispanic and black males with chronic lung infection and weakened immunity system.

The questions for health care administrator regarding potential litigation issues with nosocomial infections are;

  1. How and why are nosocomial infections passed to patients?
  2. Who is most vulnerable to getting infected with nosocomial infections?
  3. What measures is the hospital taking to ensure transparency within its healthcare system with regard to hospital-acquired infections?
  4. What practices is the hospital putting in place to control the hospital-acquired infections?
  5. Who pays for the cost of treatment when a patient is infected with nosocomial infections?
  6. Are the healthcare providers in the hospital aware of the role of law in promoting patient health?

The patients getting admitted to Good Health Hospital have a right to know how and why they can acquire nosocomial infections. It is the duty and obligation of the healthcare providers in the hospital to make sure that their patients are made aware of such reasons. Mostly, nosocomial infections occur due to the negligence of the health care provider for lack of taking care of the patient to ensure they do not acquire other infections while in the hospital. The infections are acquired through neglect of wearing protective clothes, lack of hygiene, failure to isolate patients, poor waste management, as well as neglecting infection control measures (Krein et al., 2012).

The most vulnerable patients should be noted to ensure prevention of nosocomial infections. These include young children, the elderly, the diabetic, premature babies, the severely ill, and those who are undergoing treatments that destabilize their immune system or with chronic conditions. This is to ensure that they are protected against any infections. Moreover, transparency to patients in regard to their chances of getting infected, health care regulatory bodies should be informed about any disease outbreaks in the hospital (Laurent et al., 2012). Further, government oversight agencies should be made aware of the risks and errors occurring in the hospital.

With regard to practices to ensure that the infections are controlled, the hospital should state whether health care providers wear protective clothes, maintain hygiene, isolate infected patients, manage waste properly, and take infection control measures. If they take these measures, then they should ascertain why infections occurred in the past year. It is also important for the health care administrator to specify who pays for the cost of the infections should a patient get infected while in the hospital or after discharge. Since these infections occur chiefly due to neglect on the side of health care workers, the hospital should be held fully liable for the cost of treating patients as well as compensating them for the lost time spend in hospital bed (Septimusa et al., 2014).

Moreover, the administrator should state whether the hospital is aware of the role of the law in promoting patient health. Legal rules enact standards to be met by health care providers to discourage practices that go below the accepted standard as well as information disclosure (Wick et al., 2012). This is to ensure that patients make informed choices and pursue claims for damages and seek redress where negligence occurred leading to infection.

The target audience is the health care providers at Good Health Hospital. An implementation plan reached after consultations with the hospital administrators seeks to prevent nosocomial infections, such as catheter associated urinary tract infections. Other infections include; pneumonia, resistant Staphylococcus Aureus, surgical site infections, blood stream infections as well as healthcare influenza, which can be eliminated through immunization. Moreover, approaches were suggested to monitor the effect of nosocomial infections. A comparison plan was also suggested on rates of infections among different hospitals and within the hospital over time to adjust the risk factors and mortality factors (Krein et al., 2012)

The steps for the implementation of the plan include; identification of the hazards and mitigation of potential risks, education and training of health care providers in the hospital. Another step would be to lay in place routine practices and procedures essential to infection control. Further, surveillance of the infection incidence would be done to see that the implementation is in place. An infection control committee would be set up to come up with policies for the prevention and control of the nosocomial infections in the hospital and to implement the infection control program (Septimusa et al., 2014).    


It would be appropriate for Good Health Hospital to develop infection control programs to boost the well-being of health care workers and their patients (Wick et al., 2012). This would be possible through the development of an annual work plan to evaluate and foster good health care. Moreover, a provision of sufficient resources to sustain the infection control program. This would be coupled with prevention of risks for patients and hospital staff and should be supported by the senior hospital administration (Grol & Grimshaw, 2003). The health care providers should be trained to acquire requisite skills, knowledge and attitudes for infection control practices. Workers in the hospital should be immunized against nosocomial infections.

As a means of ensuring that a safety protocol itinerary is put in place in the hospital, hygiene should be emphasized at all times. Environmental management practices should also be met, such as proper management of hospital, surgical and clinical waste, use of therapeutic devices as well as support services, for instance food and linen. Further, single use devices should be recommended in addition to proper management of blood-body fluid exposure (Grol & Grimshaw, 2003). More essential infection control measures, such as aseptic techniques should also be employed as a safety means.


Communications and Media

Southeastern BioTech Corporation,  


Manager, Red River Country Club.


Dear Mr. Jeffery Smith,

Reply to the Red River Country Club Manager

We are sorry that the truckload of grass seed on Purchase Order number 2354 that you received on January 15, 2015 was mixed incorrectly. We sincerely comprehend your disappointment and understand the inconvenience this must have caused your country club. Moreover, it is evident that the grass seed we supplied did not meet the specifications, which you very much expected from us and should continue to demand from our company. It was inappropriate to mix the grass seed sacks inappropriately as hybrid seeds for a colder climate were mixed with hybrid seeds for a warmer climate.

Consequently, in an effort to improve our product offering to you, we are ensuring that each sack is marked correctly with the hybrid seed packaged in accordance with the matching climate and a cross-checking done before it is sealed. This will eradicate any irregular growth patterns on the freeways, greens, and tee boxes thereof. We are also refunding the amount you paid for the grass seed, which is $26,000. We have since started employing quality management techniques to ensure our clients get the best out of our relationship and protect our reputation for quality delivery.

We apologize for the mistake we made and regret any inconvenience we caused as a result. In that effect we have liaised with our logistics team to pick up the grass seed to free up your storage space. We thus look forward to fostering the business relationship which our two firms have put in place over the last seven years. We invite any recommendations on how we can mitigate any inconvenience in regard to this matter, and as such do not hesitate to contact us.



Marketing Manager for Southeastern BioTech Corporation. 


Macroeconomic Policy

Favorable macroeconomic policies increase the demand for goods in the markets. However, the unemployment rate negatively affects the Comcast Corporation’s business in relatively the same way decreasing disposable income impacts it. Since the unemployment rate is falling, more consumers are able to pay the price for premium products and buy advanced cable and broadband services. Consequently, the falling unemployment rate means more disposable personal income; thus the drivers are promoting the growth of the cable and broadband industry. However, the economy cannot generate enough spending to meet full employment since productivity slowdowns and growth in the labor force have lowered the natural interest rate (Wallsten, 2014).

A major macroeconomic policy of the United States government encourages the domestic cable manufacturers, such as Comcast, to retain their major technology in the country but establish subsidiaries in Asian countries for cheap labor and resources while marketing locally. Such policy is intended to provide survival to the domestic labor-intensive industry thus promoting growth in the industry (Wallsten, 2014). Restrictive monetary policy causes the interest rates to go up, while stimulative fiscal policy is as a result of tax cuts, increases in government spending and tight money policies. However, increases in money supply in the economy leads to inflation. The general prices of commodities in the cable industry will shoot up, resulting into low purchases from the household and the businesses.

The current government policies, such as purchasing of government securities affects the GDP greatly, especially in cases of high required reserve ratio, thus impacting the government spending due to the effect of interest rates leading to slower growth in demand. However, as banks are deprived of the loanable funds, the required reserve ratio goes up. Money supply as a result goes down due to the sale of government bonds, thus higher interest rates for borrowers. This hampers the growth of the cable industry as businesses and household have little money at their disposal to spend. Spending is thus diverted to essential commodities and basic needs (Barigozzi & Hallin, 2014).

The forces of demand and supply are spurring competition in the cable and broadband industry. The supply-side policies are promoting the build-out of the network infrastructure over which Comcast can offer its services and applications. Conversely, the demand-side policies have fostered the awareness and adoption of these services and applications, leading to more usage by the markets. Therefore, the interaction of supply and demand factors have aided Comcast, to realize increased market penetration (Bernath, 2015). However, market failures may hinder the development of the interaction of supply and demand forces. It is through macroeconomic policies that the market is able to reach the required critical mass, thus leading to sustainable growth cycle (Awan & Akhtar, 2014).

The Existing Home Sales is a vital indicator of the demand for Comcast products whose turnaround will result into a positive growth in the demand for the Corporation’s services and applications, albeit at a slow pace. The previous decline led to a fall in the number of units sold before picking up at the end of 2010. Currently, the housing prices are returning to normal levels, though they have to become subnormal for some time to eradicate the excess supply. Moreover, the looming predictor is holding a downward pressure on valuation multiples. Since the housing prices are getting attractive, more consumers are jumping on bargains, hence helping Comcast Corporation to get more potential customers (Wallsten, 2014).

Moreover, the government is policies that have spurred competition in the cable and broadband industry, thus allowing recommendations that are beneficial to the consumer through data driven competition policies. Through the provision of information to the consumers, firms such as Comcast Corporation have bettered their service value delivery, thus increasing the demand for their products. However, austerity measures by the government have undermined growth with attempts to sustain demand through monetary rather than fiscal policy becoming ineffectual (Barigozzi & Hallin, 2014).
In a bid to reduce the deficit in the economy, the government has employed monetary policy. This includes aggressive cuts in interest rates, negative short-term policy rates, and quantitative easing have been used to stimulate demand and economic activity through exchange rate depreciation and low long-term interest rates. The result has been a preferable effect in the cost of commodities in the general market.

The current macro policies have affected the cable and broadband industry by fostering effective competition and encouraging investment. This has been done through stimulation of sharing of physical networks by multiple providers. Moreover, there has been a facilitation of access to rights-of-way, thus easing the construction of both wide area and local connections. Policies have also been developed that foster open access to government-sponsored and dominant operator networks for enhanced competition. Further, the policies have led to an open access to critical infrastructure, thus increasing competition in the market, a factor that has seen Comcast Corporation’s profits increase steadily (Bernath, 2015).

However, as the policies are implemented by the government, businesses view broadband supply as a problem of demand and supply, thus they are being forced to employ broadband development strategies and policies to facilitate demand. To benefit from the macro policies the government imposes on the industry, firms such as Comcast Corporation, should take advantage of their competitiveness in the market to counter the adverse effects of the policies. On the other hand, high unemployment, reduced economic activity and falling incomes affect the industry heavily. For the firms to adapt in the depressed consumer spending, they have to cut production as well as the cost of research and development (Awan & Akhtar, 2014).