...Operational Risk Key Term Operational Risk is the monetary risk that a corporation faces when people, processes, or system failures occur. The concept of operational risk is a constant in the workplace and has a major impact on decision making within the corporation. In my current workplace, we are considering a major change in workflow, and must measure the operational risk to the benefits of the proposed changes. Explanation of the Key Term Many factors must be considered when a change is proposed within an organization. Benefits and detriments must both be weighed in order to make the most informed decision; however, even after careful consideration, some decisions are poor. Operational risk must also include monetary damages that occur outside the realm of human decision-making, such as natural disasters or communication failures. Any action that causes a disruption to routine business operation is considered an operational risk. The more information used to calculate operational risk, the more complete and reliable picture is created for total risk evaluation (Mittnik, Paterlini, & Yener, 2014, p. 102). It is imperative to have accurate data to make quality decisions, and to create processes for predicted failures to minimize impact on the corporation. Major Article Summary Operational risk assessment should be a common, daily occurrence within an organization and should be implemented in every process in place. Corporations should implement an operational...
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...The Importance of Risk Management for Managers Anthonique Brock Walden University March 21, 2015 Leck, H (2014). The Importance of Risk Management for Managers. Managerial Challenges of the Contemporary Society, 119-194 The purpose of the article was to explain the causes of accidents in the workplace and how does management deal with it. According to (Leck, 2014) “Accidents do not happen by themselves they are caused accidentally…” This statement is true but Leak wanted to dig deeper so he can understand the root cause of the accidents. It is always two sides to a story whether it is true or false but both sides deserve to be heard. Leak gave an example of a man driving a forklift and it tipped over because he ran over a stone. The question is what really caused the accident? Was it the stone or was the driver not paying close attention? This is a good example but this will be a never ending question. Leck researched 2 main theories regarding accident causes; what caused the accident and the deep-seated causes of the accident. For example, it could be that the stone caused the accident because it was too big for the driver to avoid. Maybe the driver was distracted and could not avoid the stone so he had to hit and in result the forklift tipped over. So that Leck can get to the bottom of the question, he researched and came up with basic models of accident. According to (Leck, 2014) “Basic model of accidents try to describe or explain how the critical event that caused...
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...Challenges Facing the Finance Industry This paper will explore three problems facing the finance industry. Those problems include cybersecurity, compliance with regulation, and risk management. Three solutions will also be addressed later in this paper. 1 When one thinks about the finance industry, banks, credit agencies, insurance companies, and equity firms may come to mind. Over the years financial institutions have not been up to par. With the financial crisis that happened in 2008, the world is still recovering and paying high taxes for the amount of debt that it acquired. As a result of that crisis, the financial industry faces challenges that include cybersecurity, complying with regulation, and risk management. Although the industry faces these challenges, there are solutions that can make things operate smoother. One of the finance industries biggest challenge this year is cybersecurity. According to Hewitt, “The potential hacking of sensitive customer information is a top threat facing the financial industry in 2014.” Technology is vastly changing, and more people are beginning to use different softwares to handle the financial side of the business. With technology evolving, hackers are getting more experienced, and cyber-attacks are beginning to occur more frequently and more wide spread than they have been in the past. According to Rodriguez, “As the cost of technology decreases, the barriers to entry for cybercrime drop, making it easier...
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...Proceedings of the 2005 Winter Simulation Conference M. E. Kuhl, N. M. Steiger, F. B. Armstrong, and J. A. Joines, eds. MODELING AND SIMULATION OF CALL CENTERS Athanassios N. Avramidis Pierre L’Ecuyer Département d’Informatique et de Recherche Opérationnelle Université de Montréal, C.P. 6128, Succ. Centre-Ville Montréal (Québec), H3C 3J7, CANADA ABSTRACT In this review, we introduce key notions and describe the decision problems commonly encountered in call center management. Main themes are the central role of uncertainty throughout the decision hierarchy and the many operational complexities and relationships between decisions. We make connections to analytical models in the literature, emphasizing insights gained and model limitations. The high operational complexity and the prevalent uncertainty suggest that simulation modeling and simulation-based decision-making could have a central role in the management of call centers. We formulate some common decision problems and point to recently developed simulation-based solution techniques. We review recent work that supports modeling the primitive inputs to a call center and highlight call center modeling difficulties. 1 INTRODUCTION Call centers are an important component of the global economy. Around 3% of the workforce in the United States and Canada works at a call center (Call Center News Service 2001). More people in North America work in call centers than in agriculture. Most of the operating...
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...RISK MANAGEMENT AND INTERNATIONAL INVESTMENT REPORT OF MARYLEBONE BANK BFBL606.2 Risk Management and International Finance Tho Cam Vu Student ID: 13486903 Date: 30th May 2014 Word Count: 3,413 Student ID: 13486903 Date: 30th May 2014 Word Count: 3,413 ABSTRACT Marylebone Bank is an UK-based bank and had certain investments within the country and international. Marylebone Bank is currently holdings investments in five FTSE companies in banking industry, also holdings certain assets of cash and equity. The report sets the bank’s capital requirement with the requirement of Basel Accords in order to build up sustainable positive capital frequently to avoid losses, liabilities and liquidity. Firstly, the report analyzes the risk management under current assets of Marylebone by applying the VaR methods, such as Variance – Covariance, Historical Simulation and Extended Historical Simulation, in order to have criticisms under each method on the effectiveness. The reports will continuously measure and manage each category under Basel Accords regulation: Market Risk, Credit Risk and Operational Risk. Furthermore, all five Basel Accords including: Basel 1(1988 BIS Accord), Basel 1 (1996 Amendment), Basel 2, Basel 2.5 and Basel 3 will be taken into account in order to develop the framework in details. Finally, the report concludes with the core concept of capital, the influences of risk management and capital requirement under the banking regulation using example of the most...
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...Lloyd Wayne Murphy Product Quality Inspector Training Development Strayer University September 9, 2012 Abstract March 10, 2008, a group of four IT students: J. Group, L. Elect, K. Tronic, and M. Gadget incurred the involvement of a IT final exam studying session together on the student’s home J. Group, and during the studying session, when J. Group complained of hot the laptop felt. A heated discussion soon ensued regarding J. Group’s concern, whereof the group initiated a concept of the students forming an accord between the students to construct an electronic gadget, which would resolve the issue. Indeed, not only did the gadget soon incur construction in a reduction of the operational heat of the laptop or computer produced: the gadget, as well, enhanced a laptop’s or any computer’s speed, wherein, the gadget incurred attachment. Therefore, the students found a financial backer, N. Merchandise, to initiate the implementation of the construction of Automated Gadget and promptly filed for a LLC to form company: thereof titled Group Automated Gadget, LLC (GAG) on June 8, 2008. Product Quality Inspector Training Development The GAG board is comprised of five individuals: the four students and the financial backer, whom the board elected as President of the board, devised a stratagem of opening a small plant. The GAG board averred the organizations mission to highlight the firm’s goals: GAG product performance excellence equals customer satisfaction. The board of...
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...Team D Strategy for Simulation 2 Team D’s strategy for the next simulation will be to buy large quantities of raw material and produce maximum amounts of product in the first quarter to meet maximum capacity. Furthermore, we plan to invest in marketing at around 3%. Our marketing tactic will be to invest marketing expense into two products per geographical area, so that each geographical area will have two highly marketed products. In our second quarter, we will watch the sales reports and inventory levels closely. When our resources are low we will replenish our inventories to reach capacity levels so that we do not lose money on interest charges that are related to inventory costs. We will use a just-in-time approach to purchasing and production. Also in this quarter we will consider changing the prices of our products, depending on our market data. Our goal in this simulation will be to maintain low inventory costs, and increase sales of our products. In our third quarter, we will continue monitoring our sales reports, inventory levels, production schedule, and market report. Based on our results, we will analyze each report and determine whether we need to change prices or change marketing expenses. We will also monitor our financial statement and determine if there is room for loan repayment to decrease our interest expenses. We think it is important to note that in order to maintain a realistic approach to the simulation we will aim to have an operable amount of inventory...
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...RISK MANAGEMENT AND INTERNATIONAL INVESTMENT REPORT OF MARYLEBONE BANK BFBL606.2 Risk Management and International Finance Tho Cam Vu Student ID: 13486903 Date: 30th May 2014 Word Count: 3,413 Student ID: 13486903 Date: 30th May 2014 Word Count: 3,413 ABSTRACT Marylebone Bank is an UK-based bank and had certain investments within the country and international. Marylebone Bank is currently holdings investments in five FTSE companies in banking industry, also holdings certain assets of cash and equity. The report sets the bank’s capital requirement with the requirement of Basel Accords in order to build up sustainable positive capital frequently to avoid losses, liabilities and liquidity. Firstly, the report analyzes the risk management under current assets of Marylebone by applying the VaR methods, such as Variance – Covariance, Historical Simulation and Extended Historical Simulation, in order to have criticisms under each method on the effectiveness. The reports will continuously measure and manage each category under Basel Accords regulation: Market Risk, Credit Risk and Operational Risk. Furthermore, all five Basel Accords including: Basel 1(1988 BIS Accord), Basel 1 (1996 Amendment), Basel 2, Basel 2.5 and Basel 3 will be taken into account in order to develop the framework in details. Finally, the report concludes with the core concept of capital, the influences of risk management and capital requirement under the banking regulation using example of the most...
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...European Journal of Operational Research, 2009, Vol 193, pp425-436 Authors: Baker P. & Canessa, M. Warehouse design: a structured approach Abstract: In spite of the importance of warehousing to the customer service and cost levels of many businesses, there is currently not a comprehensive systematic method for designing warehouses. In this paper, the current literature on the overall methodology of warehouse design is explored, together with the literature on tools and techniques used for specific areas of analysis. The general results from the literature have then been validated and refined with reference to warehouse design companies. The output is a general framework of steps, with specific tools and techniques that can be used for each step. This is intended to be of value to practitioners and to assist further research into the development of a more comprehensive methodology for warehouse design. Keywords: Facilities planning and design; Decision support models; Logistics; Warehouse design. 1 Warehouse design: a structured approach 1. Introduction Warehouses are a key aspect of modern supply chains and play a vital role in the success, or failure, of businesses today (Frazelle, 2002a). Although many companies have examined the possibilities of synchronised direct supply to customers, there are still many circumstances where this is not appropriate. This may be because the supplier lead times cannot be reduced cost effectively to the short lead times...
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...is a computer necessary in conducting a realworld simulation? Answer It is important because there are many different types of outcomes that comes in with simulation. Computers are used in daily life activities and it is necessary. 14-11 What is operational gaming? What is systems simulation? Give examples of how each may be applied. Answer Operational gaming is the use of simulation in competitive situations such as military games and business or management. System simulation ls that deal with the dynamics of large organizational or governmental systems. Validation The process of comparing a model to the real system that it represents to make sure that it is accurate. 14-17 (a) Resimulate the number of stockouts incurred over a 20-week period (assuming Higgins maintains a constant supply of 8 heaters). (b) Conduct this 20-week simulation two more times and compare your answers with those in part (a). Did they change significantly? Why or why not? (c) What is the new expected number of sales per week? Answer A. The number of stockouts incurred over a 20 week period is HOT WATER NUMBER OF HEATER SALES WEEKS THIS PER WEEK NUMBER WAS SOLD 3 2 4 9 5 10 6 15 7 25 8 12 9 12 10 10 B, Two more times would give us the value of a multiplied by 2. c. 25 14-18 A. 15 days of barge uploadings and average number of barges delayed B, They both are probabilistic simulations. Chapter 5 HW 5-14 Using MAD, determine whether...
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...Money b. Concept of Zero Coupon (Discount) Bonds and Coupon Bonds. c. Bond Characteristics d. Bond Types – Fixed Rate, Floating Rate, Inverse Floater Rate, etc. e. Interest Rates – Discrete and Continuous Compounding f. Bond Pricing – using ZCYC or YTMC with discrete compounding or continuous compounding g. Difference between bond coupon rate and bond yield h. Calculating Bond Yield (YTM, CY, MMY, ZCY/Spot, Par Yield, etc.) i. Price Yield Relationship Introduction to Financial Statistics and Econometrics 1. Introduction to Financial Statistics a. Frequency distributions b. Measures of Central Tendency/Location (Mean/Mode/Median) c. Dispersion, Measures of Dispersion (Variance/SD/Quartiles/Percentiles/Ranges) and its relevance to Risk Management d. Correlations 2. Introduction to Probability Theory a. Random variables b. Probability and its uses c. Probability Rules d. Conditional Probabilities e. Probability Distributions (Single Variable) i. Continuous Time/Discreet Time; Continuous Value/ Discreet...
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...should be used to forecast any issues that might lie ahead. It also should be used to provide time to the company to make any necessary changes, before it is too late. By using budget and pro forma accounting any company should have a good understanding of what type of financial resources are available to them in order to cut costs and increase profits. During the simulation I initially did not pay too much attention to the budget or the pro forma accounting statements, which did not do me any favors. After reviewing the pro forma statement at the end of the first quarter, I should have made adjustments. The cash flow was lower than the recommended $300,000, so I reviewed my decisions, but did not want to change anything. Which inevitably put my company in a high risk situation right from the start. When the quarter was done and I was able to review the actions that had taken place, I realized I was way over budget and the simulation automatically set me up with a loan shark to help cover the costs. I was then burdened with paying back the loan shark with interest and stock share throughout the rest of the simulation. I was not able to successfully get out of the financial situation until the fourth quarter when my products were on the rise, but even then the loan shark held stock. By the end of the second quarter I learned my lesson and utilized the financial statements...
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...European Journal of Operational Research 203 (2010) 539–549 Contents lists available at ScienceDirect European Journal of Operational Research journal homepage: www.elsevier.com/locate/ejor Invited Review Research on warehouse design and performance evaluation: A comprehensive review Jinxiang Gu a, Marc Goetschalckx b,*, Leon F. McGinnis b a b Nestle USA, 800 North Brand Blvd., Glendale, CA 91203, United States Georgia Institute of Technology, 765 Ferst Dr., Atlanta, GA 30332-0205, United States a r t i c l e i n f o a b s t r a c t This paper presents a detailed survey of the research on warehouse design, performance evaluation, practical case studies, and computational support tools. This and an earlier survey on warehouse operation provide a comprehensive review of existing academic research results in the framework of a systematic classification. Each research area within this framework is discussed, including the identification of the limits of previous research and of potential future research directions. Ó 2009 Elsevier B.V. All rights reserved. Article history: Received 5 December 2005 Accepted 21 July 2009 Available online 6 August 2009 Keywords: Facilities design and planning Warehouse design Warehouse performance evaluation model Case studies Computational tools 1. Introduction This survey and a companion paper (Gu et al., 2007) present a comprehensive review of the state-of-art of warehouse research. Whereas the latter focuses on warehouse...
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...Chapter 1 2. Define business profiles, processes, and modeling. 1. Analyze the historical (or simulation) data to determine where improvements are needed. If the evaluation is satisfactory, stop. 2. From the data, come up with an idea for improvement. 3. Create a simulation scenario incorporating that idea and run a simulation. 4. Evaluate the results to determine whether it has resulted in improvement and repeat the cycle. 5. How do companies use EDI? What are some advantages of using XML? Initially, electronic commerce between two companies used a data sharing arrangement called electronic data interchange (EDI). EDI enabled computer-to-computer data transfer, usually over private telecommunications lines. Firms used EDI to plan production, adjust inventory levels, or stock up on raw materials using data from another company’s information system. 6. Describe five types of information systems, and give an example of each. Office Information Systems is an information system that uses hardware, software and networks to enhance work flow and facilitate communications among employees. Transaction Processing Systems is an information system that captures and processes data generated during an organization’s day-to-day transactions. A transaction is a business activity such as a deposit, payment, order or reservation. Management Information Systems is an information system that generates accurate, timely and organized information so managers and other...
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...Technology Management Dr. Mina Richards Introduction One of the most significant paradigm shifts of modern business management is that individual businesses no longer compete as solely autonomous entities, but rather as supply chains (Drucker, 1998). Business management has entered the era of competition. Instead of brand versus brand or store versus store, it is now suppliers—brand—store versus suppliers—brand—store, or supply chain versus supply chain (Bowersox, 1997). Besides responding to the needs of customers, organizations must decide how to manage relationships with supplies and distributors to obtain access to the resources they provide (Gattorna, 1998). Supply Chain management is the integration of key business process from end user to original supplier that provides product services and information that is priceless for customers and for every stakeholder. Supply chain management is not just acquisition and logistical support. Supply chain management encompasses the eight functions of business management. This paper will demonstrate how communication, inventory accuracy, and cloud networking are needed to sustain supply chain management in the future. Case Background 1. What did you do in the simulation? 2. What activities did you engage in? 3. What did you learn about what's going on? 4. What have you learned about supply chain management from your participation in this simulation? ...
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