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Transcription of this question: Safe Passage (SP)Trent Peters is one Of seven partners at Safe Passage (SP). It provides bodyguard* services tofilm stars, politicians and other important people in Europe and the Americas. Trent would like tosatisfy a growing demand from Asia but has to choose from two options for the recruitment andtraining Of bodyguards. These are:offshoring by setting up it’s own overseas branch in Asian country X or Y or Zsubcontracting by using an external agency in Asian country X or Y or ZThe forecast costs and revenues Of offshoring are given below (all figures in USS millions):The forecast costs and revenues Of offshoring are given below (all figures in USS millions):OptionOffshore to country X: hasa history Of earthquakes,good infrastructureOffshore to country Y: hasno history Of earthquakes,poor infrastructureOffshore to country Z:under reconstruction aftera recentForecast costs456.4Forecast revenueif successfulProbability: 0.3191621Forecast revenueif not successfulProbability: 0.724The forecast costs Of subcontracting to the same Asian countries are given below:Country X: USSI_5 million.Country Y: USS2_8 million.Country Z: USS42 million.(Question I continued)The three suitable Asian countries are located in earthquake zones. An earthquake expert assuredTrent that all three areas are safe. Trent is concerned and decides to prepare a contingency plan foreach possible location in Asia.Control over recruitment and training Of bodyguards is vital to SP. Customer service and trust aretheir unique selling propositions (USP)_ Clients will pay high fees to ensure their safe transport toconcerts, meetings and important events. However, Trent is refusing valuable contracts in Asia dueto a lack Of suitably trained bodyguards. As a result SP is missing out on large profits.Trent has mentioned to a previous customer Of his plans to subcontract the recruitment and trainingOf bodyguards. She has threatened not to use SP again and would tell her friends if the planswent ahead. Trent is concerned as word-of-mouth promotion is crucial to SP.He calls a meeting Of all the partners. Three partners prefer subcontracting the recruitment andtraining as it is cheaper, quicker and less risky. The three Other partners prefer offshoring.They believe that subcontracting will damage SPS USP. They argue that the higher costs Ofoffshoring will be covered by the forecast high revenue.(a)(b)(d)Describe two features Of a partnership.Explain two benefits and one cost to SP Of preparing a contingency plan Of thethree possible locations in Asia.(i) Construct a fully labelled decision tree and calculate the predicted outcomeOf each offshoring option (show all your working).(ii) Comment on the value for SP of using a decision tree as a decision-makingtool.Examine two disadvantages for SP of subcontracting its recruitment and trainingOf bodyguards.[4 marks][6 marks][6 marks][3 marks][6 marks]

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