econ234p3

Bernie Smith is a network security analyst at ZNA bank, earning $120,000 per annum, plus super. He is 48 years old and married to Deena, 42 years old. Deena is a self-employed dentist and her annual taxable income is $150,000, after contributing $10,000pa to superannuation and paying $45,000pa in business overheads. Her equipment is owned outright and market value of $110,000. They have twin girls, 12 years old, who currently attend their local state primary school. Next year they will be going to a private high school that will cost $22,000 per annum all-inclusive. Once the girls finish high school they will use the money to contribute to superannuation to build up their superannuation for retirement. Their home is worth $1.5 million and the mortgage is $620,000 and they want to clear this debt in 10 years and the offset account has a $45,000. The interest rate is 4.2%pa and their monthly repayments are $6336 ($76,032 pa). Their living expenses are $78,000pa (net of the high school fees and mortgage repayments) and this leaves surplus of approximately $24,000pa, which they use for holidays and/or small updates around the house and garden. On the weekends, Bernie and Deena like to take the girls out trail bike riding and hiking. Bernie does have an interest in rock climbing and still engages in this activity once every couple of months as Deena worries it can be a bit dangerous. Their bikes and sporting equipment is worth approx. $15,000. They have an investment property worth $580,000 and the rental income is covering the repayments and the investment loan of $350,000 will be cleared in 15 years with that rental income. They will sell the property at retirement and add the capital to superannuation to fund their retirement. They have been having the renewing the same home and content insurance policy the last 9 years. He drives a 2012 Subaru Forester (market value $17,000) but usually walks or drives to the local train station during the week and catches the train to work. Deena drives a 2019 BMW X5 (market value $105,000) to work and parks in the dental practice premises 2-car private garage. They own both cars outright. Bernie has a share holding from the ZNA bank of $72,000. They each have approx $200,000 in their respective superannuation accounts with life and total & permanent disability insurance cover of $100,000. The couple has comprehensive private health insurance cover. Overall their general health is good. Bernie is refers to himself as a 'social smoker' and this means that he will have 1-2 a day at work and tends not to smoke on the weekend around the children or Deena who does not like it. Bernie's father is a smoker and both his parents are still alive and relatively well in their late 70's. Deena's father is alive in his mid 80's and lives on his own. Her mother died from breast cancer 20 years ago. Her dad is quite well apart from diabetes and Deena wants him to hand in his drivers licence as his vision is deteriorating rapidly due to the diabetes. Bernie and Deena want to make sure that their financial plan and lifestyle is not impacted by an unfortunate event impacting either of them.

Required Question 1 Apply the Risk Management Process - 5 steps to the Smith's situation. Step 1: Define objectives Step 2: Identify and measure potential loss exposures Step 3: Evaluate potential loss exposures Step 4: Select most appropriate risk management techniques (Note: Can present Step 3 and 4 in matrix) Step 5: Implement and monitor the program

Question 2 You get a sense that Deena has instigated this meeting as Bernie wonders out loud 'Given the cost of insurance is it really worth it? I know we will have to pay a lot for me because I smoke, but I am not really a smoker! Maybe we build savings for the possibility and take the chance nothing too bad will happen to us.' In your response to Bernie explain to him the concepts of: a) How insurance works b) What is an insurable risk c) Types of insurance and tax implications (overview) d) The key concepts of insurance law e) How consumers are protected

Organizational Behavior MAN 1163

Test 2

due by 8 pm on October 27

After graduation, John got a job as a trainee salesperson in a company which markets detergents. The company is amongst the top three Canadian manufacturers of detergents. Apart from John, there are four other salespersons in the same sales territory, each working independently, having their own sales targets.

John was very excited on joining the company, which is his first job, and had thought he could easily achieve his sales targets considering the high demand for the range of detergents he is selling. However, his performance has been unsatisfactory. When he joined the company, he was not advised his goals in detail but was verbally told that he must sell at least $ 35,000 worth of detergents each month. At first, his reporting line was unclear, and he thought he was reporting to Vlad who is another salesperson senior to him who has been working in the company since 2015. Then after one month, he realized that Alan, the Territory Sales Manager, was his direct supervisor. The other salespersons also reported to Alan directly. This misunderstanding has led to a strained relationship with Vlad and the other salespersons in the group who are not cooperating with him.

Although John is working long hours which has also disturbed his work-life balance, his sales are 31% below target. He is getting stressed, demotivated, disengaged, and irritable. Customers are complaining about his poor attitude and behavior.

Alan is a strict, energetic, performance driven professional who is very busy, single handedly managing the office, supplies, deliveries, accounts, etc., and expects the salespersons to achieve their sales targets. He cannot devote enough time to individually monitor, facilitate, train and coach his subordinates. Neither does he motivate them by proper incentives, commissions, recognition, or even verbal encouragement. He has not used the strengths of his team members nor cared for their growth or careers. Vlad, who is the senior most salesperson, has had no promotion, and is doing the same job since 2015 with nominal salary increases, and is thinking of leaving the company.

Alan is very unhappy about John's performance. He is contemplating which of the following measures he should take and by when:

Dismiss Alan as he is a burden on the company and is impacting his (Alan's) own performance targets, making Alan an example for the other salespersons.

Tell Alan that he will get a bonus if he meets his targets.

Take out some time from his busy schedule, have a meeting with all the five salespersons together, redesign their jobs, make job descriptions, give each salesperson specific targets, inform them their sales performance figures so far and the feedback received from customers.

Wait for Alan's performance to improve as he has only been on the job for three months.

Accompany Alan when he makes sales calls, observe, and suggest remedial measures.

Send Alan on a training course where he can learn customer relations, presentation, and negotiation skills.

Make a team of the 5 salespersons and give them one joint overall sales target for the whole territory. Decide on a bonus if the team achieves the target which would be split equally between the salespersons. If the joint overall target is not met, none of the salespersons would get a bonus or a salary increase.

Question 1

Applying the concepts shown in the diagrams below, which of the above measures, in your opinion, should Alan be taking? Why? How and in what sequence should he implement them? You can also suggest other additional measures to Alan.

Question 2

Based on the measures that Alan is implementing, what 5 main actions should John himself take and in what sequence? Why?

Question 3

Make a Gantt Chart showing the measures that Alan would be taking, as proposed for Question 1.

LO4 Evaluate and assess various theories of motivation

LO5 Apply different theories and strategies of motivation

LO6 Assess strategies to manage groups and teams

Consider the feasible region depicted in Figure 2 (note that it extends indefinitely towards the upper right part of the graph). Here is a proposition that is valid for all linear programs and will be useful for solving this problem. For any point p, let c(p) be the cost of point p. Proposition. If point p" is on the line segment joining points p and p"", then: c(p" ) min{c(p), c(p"")}, and c(p" ) max{c(p), c(p"")}. For example, in Figure 2 we have c(E) min{c(D), c(F)}, and c(E) max{c(D), c(F)}. " This follows from simple linear algebra: if p is on the line segment between p and p"", then D C A B E F G H x1 x2 Figure 1: Feasible region discussed in Problem 3. " "" p = p + (1 )p for some 0 1. The cost of a point is a linear fuction and therefore T T " T "" can be expressed as c p. Then it is straightforward to verify that c p = cTp + (1 )c p

min{c(p), c(p"")}+(1) min{c(p), c(p"")} = min{c(p), c(p"")}. The proof for the second statement is similar.

Questions. Answer the set of True/False questions below.

(a) F cannot be a unique optimum of the problem. (b) If C is an optimal solution, D is also optimal. (c) If A and B are optimal, the problem is unbounded. (d) If B and F are optimal, G is not optimal. (e) If no point among B, D and F is optimal, the problem is unbounded. (f) There exists an objective function such that the problem is infeasible. (g) If B, D and F are not optimal, the problem is infeasible. (h) D and F could simultaneously be the only optima of the problem. (i) If D and G are optimal, there is an infinite number of feasible solutions. (j) If the problem has a finite optimal objective value, G could be an optimal solution. (k) There exists an objective function such that H is optimal but A is not. (l) If H is an optimal solution, there are infinitely many optimal solutions and the limit of the objective function values is plus or minus infinity. Problem 2 Consider the feasible region defined by the following constraints: x1 x2 1.5 x1 2x2 2 4x1 + x2 2 x1, x2 0.

(LP2)

(a) Draw the feasible region of (LP2). Does this LP have an optimal solution for all possible objective functions? Why? (b) Give an example of: An objective function such that both (0, 0) and (0, 1.5) are optimal (in minimization form) An objective function such that only the point (0, 1.5) is optimal (in minimization form). An objective function such that (LP2) is unbounded (in maximization form). If such an example does not exist, explain why. 2 Problem 3 Consider the following LP: max 10x1 + 8x2 3x3 s.t.: 2x1 + 4x2 0.5x3 6 2x1 + 6x2 4.5x3 4 x1, x2 0 x3 free.

(LP3)

(a) Write (LP3) in canonical form. If you have to introduce extra variables, explain what they stand for. Compute the initial basic feasible solution and write its value for all of the problem's variables (regardless of whether they are present in the original formulation or introduced for the canonical form). (b) Write the initial simplex tableau and perform two iterations of the simplex algorithm. Is the basic solution after two iterations optimal? Why? (c) In (LP3), replace the first constraint 2x1 + 4x2 0.5x3 6 with 2x1 + 4x2 0.5x3 6. Write the initial simplex tableau (note that only one coefficient changes with respect to the first tableau of Part 2.B). Perform one iteration of the simplex algorithm. What happens in this case?

Bernie Smith is a network security analyst at ZNA bank, earning $120,000 per annum, plus super. He is 48 years old and married to Deena, 42 years old. Deena is a self-employed dentist and her annual taxable income is $150,000, after contributing $10,000pa to superannuation and paying $45,000pa in business overheads. Her equipment is owned outright and market value of $110,000. They have twin girls, 12 years old, who currently attend their local state primary school. Next year they will be going to a private high school that will cost $22,000 per annum all-inclusive. Once the girls finish high school they will use the money to contribute to superannuation to build up their superannuation for retirement. Their home is worth $1.5 million and the mortgage is $620,000 and they want to clear this debt in 10 years and the offset account has a $45,000. The interest rate is 4.2%pa and their monthly repayments are $6336 ($76,032 pa). Their living expenses are $78,000pa (net of the high school fees and mortgage repayments) and this leaves surplus of approximately $24,000pa, which they use for holidays and/or small updates around the house and garden. On the weekends, Bernie and Deena like to take the girls out trail bike riding and hiking. Bernie does have an interest in rock climbing and still engages in this activity once every couple of months as Deena worries it can be a bit dangerous. Their bikes and sporting equipment is worth approx. $15,000. They have an investment property worth $580,000 and the rental income is covering the repayments and the investment loan of $350,000 will be cleared in 15 years with that rental income. They will sell the property at retirement and add the capital to superannuation to fund their retirement. They have been having the renewing the same home and content insurance policy the last 9 years. He drives a 2012 Subaru Forester (market value $17,000) but usually walks or drives to the local train station during the week and catches the train to work. Deena drives a 2019 BMW X5 (market value $105,000) to work and parks in the dental practice premises 2-car private garage. They own both cars outright. Bernie has a share holding from the ZNA bank of $72,000. They each have approx $200,000 in their respective superannuation accounts with life and total & permanent disability insurance cover of $100,000. The couple has comprehensive private health insurance cover. Overall their general health is good. Bernie is refers to himself as a 'social smoker' and this means that he will have 1-2 a day at work and tends not to smoke on the weekend around the children or Deena who does not like it. Bernie's father is a smoker and both his parents are still alive and relatively well in their late 70's. Deena's father is alive in his mid 80's and lives on his own. Her mother died from breast cancer 20 years ago. Her dad is quite well apart from diabetes and Deena wants him to hand in his drivers licence as his vision is deteriorating rapidly due to the diabetes. Bernie and Deena want to make sure that their financial plan and lifestyle is not impacted by an unfortunate event impacting either of them.

Required Question 1 Apply the Risk Management Process - 5 steps to the Smith's situation. Step 1: Define objectives Step 2: Identify and measure potential loss exposures Step 3: Evaluate potential loss exposures Step 4: Select most appropriate risk management techniques (Note: Can present Step 3 and 4 in matrix) Step 5: Implement and monitor the program

Question 2 You get a sense that Deena has instigated this meeting as Bernie wonders out loud 'Given the cost of insurance is it really worth it? I know we will have to pay a lot for me because I smoke, but I am not really a smoker! Maybe we build savings for the possibility and take the chance nothing too bad will happen to us.' In your response to Bernie explain to him the concepts of: a) How insurance works b) What is an insurable risk c) Types of insurance and tax implications (overview) d) The key concepts of insurance law e) How consumers are protected