ITM215 Case Study #1 - Vacation to Florida (20%) Since the RFP for the new terminal was finished, I thought that I should take a well- deserved vacation. I had not been on vacation with my family for several years and we decided that we would take a two-week trip to Florida during the long Canadian winter. Because of school and work schedules there was only one two-week period that was open for all four of us. We decided that the vacation would be on a cash basis and we would not use any "plastic." None of the family was about to object - they were ready for warm weather and a vacation too. We had about $3000 that we had in a savings account for the vacation and we had another $7000 in a certificate of deposit that would not mature until the start of the second week of our vacation. We thought that we could make planning the vacation a collaborative process. To start the process we had to decide upon the requirements. Because the family cars both had more than 90,000 miles and had to last another couple of years and because none of us cared to sit in a car, bus, or train for an extended period - we decided that we would fly to Florida and back. Neither our ten-year old son nor the sixteen-year old daughter had ever been to Florida and wanted to spend most of their time at the theme parks after talking with their friends about the entertainment alternatives. My wife and I just wanted warm weather and some time together, so we were willing to go along with the theme park focus. We sat down together and decided the basic requirements for the trip and what would be the minimum necessary to satisfy each requirement as well as the more desirable alternatives that we could hope for. After several days we had researched the costs associated with all of the alternatives for each of our basic requirements. We then calculated the cost of meeting the "threshold" value for each requirement. The "bare bones" vacation would cost about $5,000 and was well within our budget. We also calculated the cost of the "dream" vacation. It was about $21,000 and definitely out of our price range. We imposed a $3,000 limit on the first week and a $7,000 limit on the second week (and a total limit of $10,000 on the trip). Our basic requirements for the trip were as follows: We chose to use our own car and park it at the airport because the cost of using the limousine was too much more. We discounted having one of the relatives driving us to the airport because we didn't want to impose. Nobody wanted to ride in the shuttle. Due to recent world events budget airlines were out of business and we couldn't afford a charter. The cost of first class was more than four times the cost of the non-stop coach and was clearly exorbitant. Although the refundable tickets with the non-stop coach would have been nice, the $3000 constraint on the first week's spending caused us to go for the non-refundable tickets with the one-stop (it took about 2 hours longer to get there). When we looked at the rental car prices, we decided that using a Cadillac or a Lincoln for a week was not worth more than twice as much as a full size Ford or Chevrolet. With four people and two weeks worth of luggage, we thought that the small difference in price between the full size and the intermediate was worth it. I don't think we could have taken four people and the luggage too in one of the compact alternatives. The first-class hotel suite would have been a real treat, but again it was more than twice as much as the next alternative and would have used almost our entire vacation budget. We had stayed at the first-class two-bedroom timeshareon a previous trip and for the price it was clearly superior to the other alternatives so we stopped the discussion at that point. Three of the four of us have sensitive digestive systems and the more fast food we eat, the worse we feel. We decided that eating three good meals a day was particularly important and saving money by eating fast food could spoil the vacation and the medical costs could easily exceed the savings on food. There were two or three theme parks that both the kids were interested in visiting and they wanted to "do it all." We planned on spending two days in travel, two days lounging around the hotel or resort, and ten days at the theme parks. Because keeping the kids entertained with other local attractions was almost as expensive per day as the theme parks, we agreed that we could reallocate the days at almost any time during the trip depending upon the weather and the family level of interest. We agreed in advance that we would restrict the spending on souvenirs. Since the relatives made a practice of bringing us gifts when they traveled, we thought that it was appropriate to reciprocate. It was essential that the gifts for the relatives be approximately equal in value because they would compare the gifts and we didn't want to hurt anyone's feelings. Based on the gifts that the relatives had given us in the past, we thought those gifts of less than $30 would also cause some bad feelings. The $30 limit on souvenirs for the immediate family was an aggressive goal based on past experience. Although the other members of the family were not in favor of a "management reserve," I thought that it was necessary to handle unanticipated expenses. I would have felt comfortable with a $500 reserve for the first week, but I was willing to assume a "moderate risk" with a $300 reserve because of the other priorities and the $3000 constraint on the first week spending. The $500 reserve for the second week did not conflict with our other priorities and was within our budget. With the budget set and the priorities negotiated we patiently waited until our departure date. The day before our departure we went to the bank and got $500 in cash and $2500 in traveler's checks. I took $50 and the traveler's checks and my wife took the remaining $450 in cash.Exercise 1 Instructions Risk Identification Assessment Objective: Identify the risks associated with the Vacation in Florida scenario: Instructions: 1. Conduct the Risk Assessment as follows: Using the attached form identify the P-I (use a scale 1-10 with 10 being the highest) and calculate severity by multiplying Probability X Impact. Rank the risks and provide a reasonable course of action IF the risk were to occur. Risks should be clearly stated and actionable. A helpful approach is to think in terms of an if condition, then consequences. You must find 10 risks and provide an action for each.