Concept explainers
Interpretation:
Reason for impossibility of “Black Swan Crises”.
Concept Introduction:
A crises is an after effect of some happening or event which could have been foreseen.
Black Swan events which are part of the unknown unknowns, are unexpected and it cause disruptions in the way people normally conduct business and change the way people normally behave as per “conventional wisdom”.
Explanation of Solution
Black Swan events which are part of the unknown unknowns, are unexpected and it cause disruptions in the way people normally conduct business and change the way people normally behave as per “conventional wisdom”. These unknown unknowns can also have a positive impact such as the internet which was a disruptive innovation. These events transform the way people think and conduct their businesses.
A crises is an after effect of some happening or event which could have been foreseen. To illustrate, the financial crises of 2008 was due to housing loans going bad due to the greed of banks and loan institutions. The crises was foreseen by some eminent economists such as Dr. R. There is some time to address the issue or cause before the negative impact of the event is felt. Consequently, a crises unlike a “Black Swan” event is not totally unexpected.
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Chapter 15 Solutions
Practical Operations Management
- Which of the following best defines risk management? * A physical feature or operational attribute that renders an entity, asset, system, network, or geographic area open to exploitation or susceptible to a given hazard. The management of the consequence of something happening, described in either quantitative terms of probability or frequency. The potential for an unwanted outcome resulting from an incident, event, or occurrence, as determined by its likelihood and the associated consequences. A process of identifying the potential for an unwanted outcome, determining what to do about it from among the available alternatives, and then doing it.arrow_forwardWhy is dependability important?arrow_forwardTerrorism is a type of security risks. True O Falsearrow_forward
- A requirement for scientific work is that what we have done can be reproducible, whichmeans that when using the same input and the same models, we should arrive at the sameresults. Will a risk assessment meet this requirement? it is a risk management question.arrow_forwardWhich statement regarding Time-Cost Models tradeoffs is true? Crashing a project reduces the duration of noncritical activities Projects with multiple critical paths cannot be crashed The crash time of an activity exceeds the normal time of the activity To crash a project, costs are increased on critical activities to reduce their duration Noncritical activities cannot become critical after crashingarrow_forwardConsider the following scenario: A sales representative from a textbook publisher calls on your professor to try to get him or her to adopt a new textbook. Is it okay for the professor to accept a free lunch from a publisher’s sales representative? If it is okay for a professor to accept a free lunch, what about a free game of golf? What about a free set of golf clubs after the game?arrow_forward
- Tesla engineering center is trying to decide whether to make or buy a part (#T-63NFT) in its transmission module. Purchasing the part would cost $1.50 each. If they design and produce it themselves, it will result in a per-unit cost of $0.75. However, the design investment would be $50,000. Further, they realize that for this type of part, there is a 30% chance that the part will need to be redesigned at an additional cost of $50,000. Regardless of whether they make or buy the part, Tesla will need 100,000 of these parts. Use decision trees analysis to calculate the expected monetary value (EMV) and make decision. Please draw a decision tree for analysis. What is the cost if Tesla decide to make the part but the part needs to be redesigned? What is the cost if Tesla decide to make the part and the part does not need to be redesigned? What is the EMV if Tesla decide to make the part? What is the EMV if Tesla decide to buy the part? How would the “30% chance for redesign” come from?…arrow_forward2. A product design engineer must decide if a redundant component is cost-justified in a certain system. The system in question has a critical component with a probability of 0.98 of operating. System failure would involve a cost of $20000. For a cost of $100 a switch could be added that would automatically transfer the system to the backup in the event of failure. Should the backup be added if the backup probability is also 0.98?arrow_forwardRisks caused by natural or manmade disasters, and therefore impossible to reliably predict, are called___arrow_forward
- What exactly is Simulation Model Development?arrow_forwardNon-inventory goods were purchased and delivered on June 15, 2010. Several security interests exist in these goods. Which of the following security interests has priority over the others? Group of answer choices purchase money security interest perfected June 24, 2010 Security interest perfected June 20, 2010 Security interest attached June 15, 2010 Security interest in future goods attached on June 10, 2010arrow_forward7. Assume that there is a 9% rate of disk drive failure in a year. a. If all your computer data is stored on a hard disk drive with a copy stored on a second hard disk drive, what is the probability that during a year, you can avoid catastrophe with at least one working drive? b. If copies of all your computer data are stored on three independent hard disk drives, what is the probability that during a year, you can avoid catastrophe with at least one working drive? a. With two hard disk drives, the probability that catastrophe can be avoided is nothing. (Round to four decimal places as needed.)arrow_forward
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