case

Anna Diab, senior director of transportation for Life Magic Beauty (LMB), must decide how to transport the company's most critical product. LMB has developed a breakthrough liquid suspension that reverses the aging process for anyone over 35 years of age. Demand is expected to be very high despite the high price of $395 for a month's supply. The product is being manufactured in LMB's Dublin, Ireland, laboratory and will be distributed to major retail pharmacies in the United States and Canada. Anna is responsible for selecting the transportation mode and contracting with carriers to deliver the product. She is concerned about the safe and timely delivery of the initial product shipments in April to the retailers' distribution centers. The product is high value, somewhat fragile, and susceptible to theft. Some product, stolen from the laboratory, has already appeared on auction websites. In an effort to make effective transportation decisions and minimize LMB's risks, Anna decided to hold a brainstorming session with her logistics team before signing any carrier contracts. The discussion of key risks produced the following list of concerns: "If shipments are late or incomplete, retailers will penalize us with vendor charge-backs. You know they will hit us with small fines for delivery mistakes. "I'm worried about shipment delays or freight loss from hurricanes in the Atlantic Ocean "You've got to consider temperature sensitivity issues. If the product freezes, we won't be able to sell it." "I've been reading about all the piracy problems experienced by ocean carriers. You know. a 20-foot container of our product has a retail value of nearly 8875.000. "I worry about theft of individual cases at ports and while the product is on the road." "We're looking at border delays and Customs fines if we don't properly document and mark our freight." "Our brand image will take major damage if the product gets into unauthorized distribution channels due to theft or misdirected deliveries." "The company sustainability push has led to reduced packaging and biodegradable packing materials. If the cartons get wet or bounced around, we're going to end up with a lot of damaged, unsellable products." "The major US. East Coast ports can get very congested during peak shipping season. That will cause delays." By the time the meeting was over, Anna realized that she needed to spend some time looking into these issues. While she was pretty sure that some problems were remote, Anna thought that it would be wise to evaluate each one. Her new concern became how to conduct an effective risk assessment Please answer the questions below related to case 2: 1. Assess the risks identified in the brainstorming session. Populate the table below with the identified risks and justify your placement of the risks in the table. You need to place and justify the placement for all 9 types of risks listed in the case but you are not obliged to populate all cells of the table below as one cell can include more than one risk. LOW RISK IMPACT MEDIUM HIGH LOW RISK PROBABILITY MEDIUM HIGH MacBook Pro the case but you are not obliged to populate all cells of the table below as one cell can include more than one risk. LOW RISK IMPACT MEDIUM HIGH LOW RISK PROBABILITY MEDIUM HIGH I 2. Based on your answer to Q1, what are the three primary risks that the company must address? Why? 3. What do you recommend that LMB do to mitigate each of the three risks identified in Q2? Anna Diab, senior director of transportation for Life Magic Beauty (LMB), must decide how to transport the company's most critical product. LMB has developed a breakthrough liquid suspension that reverses the aging process for anyone over 35 years of age. Demand is expected to be very high despite the high price of $395 for a month's supply. The product is being manufactured in LMB's Dublin, Ireland, laboratory and will be distributed to major retail pharmacies in the United States and Canada. Anna is responsible for selecting the transportation mode and contracting with carriers to deliver the product. She is concerned about the safe and timely delivery of the initial product shipments in April to the retailers' distribution centers. The product is high value, somewhat fragile, and susceptible to theft. Some product, stolen from the laboratory, has already appeared on auction websites. In an effort to make effective transportation decisions and minimize LMB's risks, Anna decided to hold a brainstorming session with her logistics team before signing any carrier contracts. The discussion of key risks produced the following list of concerns: "If shipments are late or incomplete, retailers will penalize us with vendor charge-backs. You know they will hit us with small fines for delivery mistakes. "I'm worried about shipment delays or freight loss from hurricanes in the Atlantic Ocean "You've got to consider temperature sensitivity issues. If the product freezes, we won't be able to sell it." "I've been reading about all the piracy problems experienced by ocean carriers. You know. a 20-foot container of our product has a retail value of nearly 8875.000. "I worry about theft of individual cases at ports and while the product is on the road." "We're looking at border delays and Customs fines if we don't properly document and mark our freight." "Our brand image will take major damage if the product gets into unauthorized distribution channels due to theft or misdirected deliveries." "The company sustainability push has led to reduced packaging and biodegradable packing materials. If the cartons get wet or bounced around, we're going to end up with a lot of damaged, unsellable products." "The major US. East Coast ports can get very congested during peak shipping season. That will cause delays." By the time the meeting was over, Anna realized that she needed to spend some time looking into these issues. While she was pretty sure that some problems were remote, Anna thought that it would be wise to evaluate each one. Her new concern became how to conduct an effective risk assessment Please answer the questions below related to case 2: 1. Assess the risks identified in the brainstorming session. Populate the table below with the identified risks and justify your placement of the risks in the table. You need to place and justify the placement for all 9 types of risks listed in the case but you are not obliged to populate all cells of the table below as one cell can include more than one risk. LOW RISK IMPACT MEDIUM HIGH LOW RISK PROBABILITY MEDIUM HIGH MacBook Pro the case but you are not obliged to populate all cells of the table below as one cell can include more than one risk. LOW RISK IMPACT MEDIUM HIGH LOW RISK PROBABILITY MEDIUM HIGH I 2. Based on your answer to Q1, what are the three primary risks that the company must address? Why? 3. What do you recommend that LMB do to mitigate each of the three risks identified in Q2