Pizza USA Term Paper Essay

Theoretical This case includes Pizza USA, a little autonomous chain café activity that offers both eat in and complete administrations for clients that has gotten input for a potential change that will require the usage of configuration procedure to include administrations. Right now, clients have demonstrated that they are satisfied with the food offered by the eatery yet they would expand pizza buys if a conveyance administration was accessible. This difficulty integrates with two separate issues. To start with, so as to stay serious inside the business, client needs and inclinations should be heard. All things considered, on the off chance that you can't satisfy your client base, you will lose them. Also, the progressions required must be done in a way that consolidates information social occasion and investigation and usage of an arrangement that best suites this specific kind of business so as to augment achievement. Client assistance has been a common subject in numerous conversations with respect to business activities and the board lately. The common idea is that all together for your business to develop and be effective, you should distinguish what your clients need and figure out how to convey it. This paper will examine and talk about how procedure configuration can be actualized to help this business to accomplish its objectives. Inside the procedure structure investigation and conversation, a few elements will be evaluated to include: recognizable proof of what consumer loyalty intends to the business and how we can distinguish the things that are generally important to clients, the possible net yield of accomplishing a significant level of consumer loyalty and effectiveness, and the quality of building up a productive pizza conveyance (from oven to entryway) framework. The paper will likewise survey production of market â€Å"advantages† to keep up as well as develop the client base. Pizza USA: An Exercise in Translating Customer Requirements into Process Design Over the most recent five years paving the way to 2012, the Pizza Restaurants industry has encountered the aftereffects of a downturn in economy. Cafés have been straightforwardly influenced by changing economic situations, for example, changes in serious rivalry, diminishing buyer spending and an expansion in generally speaking wellbeing awareness (Kalnins, An., and Mayer, K. , 2004). Be that as it may, regardless of such overpowering chances and difficulties, organizations had the option to defeat monetary tough situations by rethinking themselves through innovative advertising and modifying their menu’s to adjust to clients inclinations (Kelso, 2012). This permitted the business to recuperate viably and buyer spending and market development returned in 2010. As more customers came back to the eateries, generally speaking interest expanded. The U. S. Pizza industry midpoints around 410 million pizzas for each year (Kelso, 2012). In 2012 alone, pizza deals are relied upon to arrive at a mind blowing $36. 1 billion in income which is a 3. 8 percent expansion from the earlier year (Kelso, 2012). This development is relied upon to proceed at a pace of 2. 9 percent for every year through 2017. In light of assembled information, 97 percent of U. S. buyers have requested food from a pizza eatery or foundation inside the previous a year (Kelso, 2012). Regardless of what you look like at it, pizza utilization is on the ascent and makes a remarkable open door for achievement in this industry. As per Gregory Badishkanian, a CITI Analyst, the huge three of the pizza business: Pizza Hut, Domino’s, and Papa Johns are at present in position to expand piece of the pie. (Bloomberg, 2012). In spite of the fact that the enormous three include 30% of the absolute pizza showcase, the staying 70% contain to a great extent of other huge chains with less market inclusion and obviously the littler free chains (Kelso, 2012). While the bigger chains are improving benefits autonomous chains are battling to remain above water in the midst of the savage rivalry among the bigger progressively settled organizations, for example, the enormous three (Kelso, 2012). Understanding this difficulty, it would be generally judicious for any autonomous eatery administrator to augment tasks by protecting that inside procedure configuration empowers proficient efficiency as well as creates a procedure that is client cordial and concentrated on customer’s necessities and inclinations (Kalnins, A. , and Mayer, K. , 2004). This would be basic in the business’ capacity to get by in such a monopolistic sort advertise. Fruitful activity inside a littler free chain eatery faces difficulties that may not be as clear to a bigger and increasingly settled popular stores. Pizza USA is a little chain activity that as of now offers two types of assistance: feast in and complete choices. Clients have remarked that if conveyance administrations were added to the café contributions, they would conceivably purchase more pizzas (Jacobs and Chase, 2011). In view of this data, it is obvious that the proprietor needs to evaluate his business activities and consider a procedure structure that would incorporate adding this support of current tasks. The option of conveyance administrations would possibly require extra funding to back changes and may include the employing of extra staff. Be that as it may, income increments because of the additional help would off-set the expenses related with these options. Close and long haul suggestions would incorporate survivability inside such a serious market. As a client, the essential focal point of my fulfillment with this kind of business relates fundamentally to effectiveness and the degree of client assistance gave. In the event that conveyance administration was given, the two zones that would be generally common in my psyche would be the conveyance time and the condition of the pizza once got. Unreasonably regularly, I’ve got conveyed food that was warm and at times cold. Obviously, I never reached that eatery again. What might make an interesting encounter would be the restaurant’s capacity to convey inside an extraordinary timespan as well as to give a pizza that is steaming hot as it would be while eating in. Another angle would be a motivating force to arrange conveyance by method of limiting or some kind of remunerations administration. These are encounters that have not been normal as far as I can tell with pizza conveyances. Technique. The apparent situational examination are as per the following: Strengths-Due to the littler idea of the business, It might make a progressively close to home understanding for the clients along these lines expanding consumer loyalty; Weaknesses-As a littler business substance, they have less assets and restricted alternatives in executing changes to satisfy client needs. Likewise, the business would be less open minded of negative effects that may result from changes contrasted with bigger set up chains with extra assets accessible; Opportunities-A more grounded client relationship will in general permit greater adaptability because of more grounded faithfulness among fulfilled clients. Steadfast clients are eager to endure changes instead of making an underlying assurance and proceeding onward to another business; Threats-The essential dangers are obviously the bigger and progressively settled chains, for example, the enormous three. Once more, due to resourcing issues, these littler and free activities have less adaptability and opportunity if changes become not exactly alluring. The essential drivers and impacts are business survivability and consumer loyalty. In spite of the fact that these two territories are referenced independently, they are in reality one. On the off chance that changes are not made to address client issues and inclinations, the business dangers losing customers and inevitable conclusion. The term client dedication has been portrayed as a procedure of catching how well an association is acting in three basic market measures: client maintenance, portion of wallet, and value affectability comparative with contenders (Jacobs and Chase, 2011). Studies have demonstrated that client faithfulness relates straightforwardly to business achievement and survivability. There exists a significant differentiation between item plan from the user’s stance from what may have been expected by the producer (Jacobs and Chase, 2011). The fundamental contrast manages the proposed versus saw value of a given item. To put it plainly, if the customer’s input isn't thought of, item or procedure configuration might be a significant exercise in futility on the from end of the arranging cycle with even a more awful result once in the market. Table-1 underneath shows speedy serve fulfillment rates among the top organizations in the market to incorporate the enormous three (Verma, R. , and Thompson, G. , 1999). As should be obvious, every one of the bigger chains has high by and large scores in consumer loyalty. But, this is just one of numerous regions that might be evaluated. The free chains can take in something from this information. The huge chains didn’t endure the market and become who they are today without accomplishment in this specific territory (Verma, R. , and Thompson, G. , 1999). Table-1 Although the case circumstance depicted is reliable with most different business tasks, â€Å"what should be possible to be increasingly gainful? † it is novel in itself due the detail andlevel of changes examined. There are likely 100 zones that could be seen that manages productivity and consumer loyalty. Be that as it may, with the end goal of this paper we will just break down the previously mentioned territories. In the event that evaluating gainfulness and consumer loyalty is an ordinary event, which is the situation in many organizations, at that point this case could definitely be considered as a prior circumstance. In any case, this paper has little to do with evaluating a recorded misfortune in benefits or income streams so the development is obscure, best case scenario. There are numerous course ideas that can be applied to comprehend this circumstance. Anyway the two most pervasive zones of activities reasoning that strikes a chord are: Chapter 3-Product and Service Design and Chapter 5-Process Analysis. Quality Function Deployment (QFD) in section 3 talks about the way toward getting the customer’s â€Å"voiceâ�

International transportation Essay Example | Topics and Well Written Essays - 250 words

Worldwide transportation - Essay Example what's more, administrations; conveying items and benefits; and overseeing client assistance) and the board and bolster administrations (advancement and the executives of human capital; overseeing data innovation; overseeing budgetary assets; obtaining, development and the board of property; overseeing Environmental Health and Safety; overseeing outer connections; and overseeing information, improvement and change). In such manner, the PCF model has solid and direct connects to coordinations the executives exercises which are generally apparent in the conveyance of items and administrations inside the working procedure stage. All things considered, since the engine carriage under land transportation is the most regularly and generally utilized, reasonable and available method of transportation over all businesses, associations and nations, this method of transportation assumes a critical job in the PCF model for gracefully chain the executives. Overseeing rules, guidelines are straightforward and generally known for engine carriages. Besides, engine transport is less expensive and expenses related with working, keeping up and continuing the vehicles for conveyance are less expensive when contrasted with different methods of transportation. As stressed, the PCF model contain process components that are pertinent to associations paying little mind to industry, district and size; along these lines, the utilization of the engine carriage equal the model’s push in making successful conveyance of items and administrations across enterprises, making its job significant for simple and most reasonable acces s in flexibly chain the board of significant associations

Case Study the Kader Toy Factory Fire

Contextual investigation the Kader Toy Factory Fire Gathering MEMBERS : SHAIKH MOHD AIMAN BIN SEFF AHMAD MUHAMMAD SUHAIL BIN MOHD ISA MUHAMMAD ABDUL FATAH BIN ABDULLAH MOHAMAD ZHAFRI BIN ZAILAINI MUHAMMAD ARIF BIN MUSA Contextual investigation the Kader toy processing plant fire Kader toy industrial facility which situated close to Bangkok, Thailand was a fire on 10 May 1993. It tends to be viewed as the most exceedingly terrible ever plant fire ever. There were 188 laborers kicked the bucket and 469 other people who were harmed. The majority of them were youthful female specialists and from country territory. The production line was claimed by a Thai transnational partnership, Charoen Pokphand (CP) Group and one of Asia’s biggest agribusiness firms. The Kader toy processing plant used to produce stuffed toys and plastics dolls primarily anticipated fare to the United States and different districts. There were created forDisney,Matteland others. The site that claimed and worked by Kader has been crushed in the burst of fire. Kader has another two sister organizations that on an agreement that worked at that area. Section A There were a few factors that lead to this fire. Initially, the manufacturing plant was structured and fabricated ineffectively. Fire exits attracted the guide or building plans were not exists; in reality not built, and the current leave entryways were bolted. Besides, the structure was reinforced with un-protected steel supports which quickly decreased and disintegrated when warmed by the flares. The breakdowns of alarms were different components that lead to the fire. There were four structures on the Kader site, three of which were decimated by the fire. The three structures were planned a solitary E-molded structure (see figure 1). Close within reach were a one-story workshop and another four-story structure highlighted as Building Four. Three structures which associated with these occurrence Fire cautions in Buildings Two and Three had sounded and all the laborers from these structures had the option to get away. Shockingly, for Building One, the alarm didn't sound. This piece of the structure was completely dedicated to the capacity of completed items and the fire spread rapidly. Different manufacturing plants were loaded with crude materials which likewise consumed fast. The fire spread very immediately when the Firefighters showed up at the manufacturing plant, and discovered Building One almost prepared to crumple as a result of the event of the burnable plastics and textures. Next, albeit each working at the plant was furnished with an alarm framework, none of the structures had programmed sprinklers. The compact quenchers and hose stations were introduced on outside dividers and in the flights of stairs of each building yet none of the auxiliary steel in the structure were fireproofed.In expansion, Kader manufacturing plant didn't furnish its laborers with good fire wellbeing preparing and the unbending security techniques. Fire penetrates and fire wellbeing preparing were additionally negligible. Figure 1.Site arrangement of the Kader toy production line In Thailand, the Kader fire episode made a lot for the country’s fire wellbeing measures, particularly its construction standard plan prerequisites and requirement arrangements. Thai Prime Minister, Minister Chuan Leekpai has caused an extreme activity for the individuals who to damage the wellbeing laws in regards to the fire security issues. As per theWall Street Journal(1993), Thai Industry Minister Sanan Kachornprasart is cited that platitude that â€Å"Those industrial facilities without fire counteraction frameworks will be requested to introduce one, or we will close them down†. The pioneers, security master and authorities said that this episode would help affix construction regulations and wellbeing guidelines yet tragically, that enduring advancement is still far away as businesses sneer rules and governments license monetary development to take need over laborer security. The fire has likewise pulled in global discussion about outside investors’ commitment for guaranteeing the wellbeing of the laborers in their supporting nation in light of the fact that remote premiums claimed larger part of the portions of Kader Industrial (Thailand) Co. Ltd. 79.96% of the Kader investors are from Hong Kong, 20% are from Taiwan, and just 0.04% of Kader is possessed by Thai nationals. A grievous modern fire in Thailand the Kader Toy Factory fire was a fire on 10 May 1993 situated in the NakhonPathom Province of Thailand. It tends to be viewed as the most engaged overall modern processing plant fire in history where authoritatively 188 specialists were murdered, and more than 500 were truly harmed, numerous truly and furthermore for all time. To abstain from being singed to death, they had to jump from second, third and fourth floors of the structures. The vast majority of the casualties were youthful female laborers from country families. Additionally, this fiasco was accepted as most noticeably terrible coincidental that identified with the death toll fire in industry in history of Thailand. Likewise, a significant number of the articles was pointed because of the hidden the world changes industrialist economy that causes such a disaster mishap ever. As we as a whole know, the past most noticeably terrible modern fire at the Triangle Shirtwaist production line in New York in 1911. Regardless of the years between these two catastrophes, they share striking likenesses. So as to take the benefits of most up to date territory of minimal effort work, the organization, for example, Kader Holding needs or ought to supplant their activity consistently. As the outcome the Kader manufacturing plant outside Bangkok was never proposed to be a lasting structure only a transitory structure just as an example the modest terrible structures, which distinguished neglected to accomplish even the insignificant Thai development necessities, were basically pressed to flooding with laborers and with their machines. Imperativeness wellbeing precautionary measures were esteemed a bit much overheads. After 10 years, the condition that Thailand’s laborers and other Asian nations have altogether most noticeably terrible. Moving into a worldwide economy suggest that items are produced at explicit area and utilized at different areas start to finish the world.Having an enticement for intensity in this new market ought not go to settle by concession in crucial modern fire security arrangements. There is an ethical duty to give laborers an adequate degree of fire security, regardless of where they are found. PART C Three proposition can improve processing plant security: 1) the administration need to make a free word related security and wellbeing (OSH) bunch with administrative forces in light of the fact that the legislature can't create enough cash to permit government workers to implement OSH laws, it is far fetched that an autonomous gathering could fund itself, since it would need to be gigantic, and thusly cost a fortune, to investigate all the production lines concerned. Moreover in 2000 multiple thirds of Thailand’s processing plants utilized under 10 laborers, who are not lawfully ensured by the Workmen’s Compensation Fund. It is impossible that OSH norms in these processing plants could be policed by an outside gathering. 2) Increase worker's guild contribution in training and cooperation lamentably it is far-fetched that crusades by existing worker's guilds could adequately improve OSH mishap or episode rates, since just three percent of laborers in Thailand are composed into associations †the commonness of plants with under 10 specialists as effectively noted, is an immense hindrance to genuine improvement in the pace of laborer association. 3) the organization should Reform the OSH laws, the proposition to change OSH laws overlooks the main issue. In both the Triangle Shirtwaist industrial facility debacle and in the Kader fire, losses of life were so high on the grounds that the structures were illicitly assembled or unlawfully worked or both. Had the laws been followed in 1911 New York and 1993 Bangkok, the fires would not have broken out in any case, and on account of Kader, the structure would not have fell before the laborers had gotten away. These thoughts are significant parts of an OSH framework, yet the main viable arrangement is for organizations and governments to handle OSH by letting laborers control their own security. Rather than quelling free vote based worker's organizations, they should rather demoralize the little organizations that are frequently sweat shops, and on the other hand advocate specialist interest in majority rule worker's guilds that speak to all laborers, and permit laborers to assess a nd deal working conditions with bosses. PART D References

Youth Violence and Gang Membership in America Essay Example for Free

Youth Violence and Gang Membership in America Essay Theoretical Youth brutality and its proceeding with development as a pandemic appears to enormously effect and impact the expanding quantities of pack enrollment in urban areas and states. Without appropriate concealment of this pandemic, in danger youth are at more serious danger of perpetrating vicious violations and starting affiliations with groups or turning out to be dynamic pack individuals themselves. There is bunch of explanations behind the connection between youth savagery and group enrollment that add to the spread of pack participation in urban areas and states. The greater part of these reasons are factors, for example, neediness, absence of social acknowledgment, complicated homes and reprobate conduct. These elements determined with different issues, for example, peer pressure, poor scholarly execution in school and the general social condition of in danger youth; add to the developing issue of youth viciousness and its proceeded with effect on development in the numbers in posse participation and increment the quantity of savage violations submitted by youth. So as to lessen the developing quantities of posse participation and battle the developing issue of youth brutality in urban communities and states, appropriate concealment of this plague must be practiced through group counteraction and intercession projects to instruct in danger young people the hazard and threats of wrongdoings, savagery and pack enrollment, harsher adolescent wrongdoer laws to discourage rehash criminal offenses and group related exercises, increasingly intuitive and improved constructive home conditions to show mindful and give feasible condition that shields youth from turning out to be in danger because of the attribute of a caring family. After school projects to keep kids included exercises like games, and games to keep them off the roads and away from the impact of youth viciousness and group enrollment. This paper will plot the different hazard and perils of youth viciousness and its effect on the development and spread of posse participation in urban communities and states. This paper will likewise plot the different endeavors, projects and enactments set up to help battle, control and smother the pestilence of youth brutality and its impact and effect on the development of pack participation and wrongdoing in urban areas and states. Presentation The expectation of this proposed investigation on the adolescent viciousness, wrongdoing and group participation is to analyze investigate different reasons that add to the connection between youth savagery and pack enrollment and investigate how the connection between youth brutality and posse enrollment can cause the spread and development group enrollment and wrongdoing in urban areas and states the consequences of this examination will give significant data and knowledge to the different components and factors, for example, neediness, broken homes, absence of social acknowledgment and so on and how those elements assume a job in youth viciousness and how youth viciousness can at last lead to group participation and carrying out violations of a fierce sort for some grieved or in danger youth, and how without appropriate concealment of these issues, for example, giving an increasingly organized network condition for in danger youth, to make positive intercession to dissuade youth v iciousness and group participation in urban areas and states and stricter laws and enactment being actualized to rebuff young or adolescent guilty parties to empower positive decisions by in danger youth, this will enormously affect the young populace who will grow up and lead solid and profitable lives. Issue Statement Youth and posse brutality has been an issue for over two decades. There is bunch of purposes behind the connection between youth savagery and posse participation, the majority of those reasons or factors, for example, neediness, absence of social acknowledgment, scattered homes and reprobate conduct, proceed to effect and impact most of lives for in danger adolescents in urban communities and states who perpetrate wrongdoings and join packs. Absence of direction and social shameful acts that plague in danger youth place pressures on in danger youth that become overpowering and the mind dominant part of in danger youth appear to be surrendering to these compels making them perpetrate wrongdoings and join packs so they can fit in and have a place with something that fills the void of the need social acknowledgment, gives a home to them regardless of how degenerate it is and permits in danger youth to act in uncontrolled reprobate practices and this extends youth viciousness, wrongdoing and posse enrollment to various urban communities and states helping this pandemic of youth brutality and group participation develop. Through different investigations and research it might be conceivable to comprehend why such a large number of youth pick savagery and pack participation as an exit plan. In any case, the point of this examination is to get why and how youth brutality and wrongdoing sway the developing quantities of posse enrollment and its spread in various urban areas and states. Is legitimate concealment and mediation the genuine answer for fighting youth savagery and wrongdoing and the developing quantities of group enrollment in urban areas and states? Speculation The development in youth savagery and wrongdoing is expanding the quantities of posse participation in urban areas and states and without legitimate concealment, this will enormously lessen the young populace who will grow up and lead sound and beneficial lives. *Note: the positive relationship will show how an expansion in the free factor (the development in youth brutality and wrongdoing), will cause a lessening in the needy variable (the adolescent populace who will grow up and lead solid and beneficial lives). Foundation and Literature Review Youth and pack savagery influences and impacts 20-30% of the lives of youngsters and teenagers. It is a plague that truly effects and changes the lives of youngsters and adolescents; it causes reprobate conduct, misfortune enthusiasm for school or the requirement for training and increment in brutal wrongdoings submitted by kids and teenagers. The most useless youth particularly the individuals who create hostile to social conduct because of misuse, broken homes or absence of companion acknowledgment and fitting in and who start encountering expanded degrees of lead issue are the most in danger for significant levels of youth savagery and crime that can add to potential association in posse alliance or enrollment (Howell J. C., 2007). 3 Specific elements were arranged that are pertinent in managing this examination and connects with the subject of significant issues and contributing elements of youth viciousness and pack enrollment. One of the elements or variables recognized in this article adding to youth savagery and posse participation is liquor and substance misuse adolescents who drink or use drugs like pot are 3.7% occasions bound to join groups. The subsequent dynamic or factor is scholarly issues. Kids and teenagers with learning inabilities adding to low confidence are 3.6 occasions liable to join groups. Poor scholarly execution and loss of enthusiasm for school relate to a 3.1% possibility of young people chance for joining a pack. What's more, the third powerful or factor in this report is a contributing component is Family, adolescents or young people in single parent families are 2.4% prone to join a posse than those in two parent homes. Poor parental management and low parental connection 9 out of multiple times lead to group participation (Stephen Johnson and David Muhlhausen, 2005). Five national essential methodologies of pack intercession and concealment that connect with the subject of absence of appropriate mediation or concealment of youth and posse brutality will lessen the number of inhabitants in youth who will grow up to be profitable and have solid existences, are best communicated and clarified in a book by (Malcolm W. Klein, 2006). This book uncovered the numerous inadequate endeavors that have been made to stifle youth group contribution and the discouragement of youth viciousness related with pack participation. This book additionally looks at and recognizes network and cultural changes that are urgent toward the activation and powerful endeavors expected to smother youth and group brutality. This book additionally connects with the subject of expanding quantities of pack individuals and the spread of limited groups to different urban areas and states is turning into a convincing issue for law implementation, by concentrating on the numerous examples of posse movement and their works day in populaces of various urban areas and states. What's more, this book analyzes the political reactions and money related assets that associate with the subject of how the spread of posse individuals to different urban communities and states has become a convincing issue for law authorization. Rundown This examination will help increment and improve the attention to the current issues with youth brutality, wrongdoing and the expanding quantities of group enrollment and furthermore add to the assemblage of information that as of now exist about the perilous elements, impacts and effect that young viciousness and wrongdoing have on the developing quantities of posse participation inside urban areas and states, and how those risky elements proceed to impact and effect the lives of in danger adolescents and keep on keeping lion's share of them from have beneficial and well behaved lives. Numerous examination considers have been done on youth viciousness and wrongdoing and how they influence the dynamic of developing quantities of group enrollment and defilement in urban areas and states. In any case, different investigations were not done from a top to bottom glance at the general dynamic of the issue, rather than the paunch of the monster of the dynamic being examined which is youth who are pack individuals or in danger youth with group alliance or associations being investigated a through non exploratory structure controlled proportion of self planned poll planned uniquely to investigate and recognize the most in danger factors related the most genuine perils of youth viciousness and wrongdoing and posse participation the appropriate responses got from the willing members in this non trial plan in danger survey will be utilized to decide and recognize contrasts in noted genuine encounters and talked up fanciful stories to pick up acknowledgment by a companion audit and reaction of members so the distinctions can be estimated use

Laser Graffiti

Laser Graffiti A Cosi smore-eating fest  is a French House orientation tradition; we spent about two hours there this evening, then walked home. On the way home, we passed the Green Building. You may know it as the tallest building in Cambridge, and/or the live Tetris game, and/or the building that always has a light on because graduate students never stop working. This building: When we passed it, around 10pm, it was dark outside and most of the windows were black. But this was on the side of the building: What? All 20 of us 10 upperclassmen and 10 freshmen froze. A laser pointer moved along the wall, and pattern followed. Suddenly, the image disappeared, and the wall went blank. The green laser reappeared, and we all leapt onto a bench for a better view, trying to figure out which room in East Campus it was coming from. The laser pointer drew a monkey: before disappearing again. Back to blank wall. We figured that someone up in an East Campus room was equipped with a laser pointer, a projector, and a computer. One of our freshmen started shrieking DRAW A VELOCIRAPTOR! DRAW A VELOCIRAPTOR! but no velociraptor materialized. Instead: Then the artist cheered up: We stood out there, cheering and yelling. Finally, enough was enough we entered East Campus en masse, climbed up to the top floor (we figured out where the source was) and found the artist. He was standing in his room, holding a laser pointer, with a projector and laptop on the windowsill. We swarmed in. The artist ran out of the room to retrieve the guy who had initially set all this up (his name is Ben.) Ben walked us through the setup, then let us create our own laser art. One of our dinosaur-fanatic freshmen made this (view on the building, view on the computer screen): My sister made this: and then it was my turn. I picked up the laser pointed, waved my hand around, and slowly traced out a very mediocre-looking pulsar. Looked more like a scorpion. Oh, well. With that, a bunch of East Campus freshmen entered the room to take a turn, so we left to give them space. Who designed this and why? I asked and got an answer. Heres whats actually important, though: a group of 20 MIT students wandered through campus at 10pm one night, and there was a kid standing in his college bedroom, using a laser pointer to draw graffiti on the tallest building in Cambridge. He was happy to let us into his room, showed us the ropes, let us draw our own pictures. IHTFP. Freshmen: welcome to MIT!

Laser Graffiti

Laser Graffiti A Cosi smore-eating fest  is a French House orientation tradition; we spent about two hours there this evening, then walked home. On the way home, we passed the Green Building. You may know it as the tallest building in Cambridge, and/or the live Tetris game, and/or the building that always has a light on because graduate students never stop working. This building: When we passed it, around 10pm, it was dark outside and most of the windows were black. But this was on the side of the building: What? All 20 of us 10 upperclassmen and 10 freshmen froze. A laser pointer moved along the wall, and pattern followed. Suddenly, the image disappeared, and the wall went blank. The green laser reappeared, and we all leapt onto a bench for a better view, trying to figure out which room in East Campus it was coming from. The laser pointer drew a monkey: before disappearing again. Back to blank wall. We figured that someone up in an East Campus room was equipped with a laser pointer, a projector, and a computer. One of our freshmen started shrieking DRAW A VELOCIRAPTOR! DRAW A VELOCIRAPTOR! but no velociraptor materialized. Instead: Then the artist cheered up: We stood out there, cheering and yelling. Finally, enough was enough we entered East Campus en masse, climbed up to the top floor (we figured out where the source was) and found the artist. He was standing in his room, holding a laser pointer, with a projector and laptop on the windowsill. We swarmed in. The artist ran out of the room to retrieve the guy who had initially set all this up (his name is Ben.) Ben walked us through the setup, then let us create our own laser art. One of our dinosaur-fanatic freshmen made this (view on the building, view on the computer screen): My sister made this: and then it was my turn. I picked up the laser pointed, waved my hand around, and slowly traced out a very mediocre-looking pulsar. Looked more like a scorpion. Oh, well. With that, a bunch of East Campus freshmen entered the room to take a turn, so we left to give them space. Who designed this and why? I asked and got an answer. Heres whats actually important, though: a group of 20 MIT students wandered through campus at 10pm one night, and there was a kid standing in his college bedroom, using a laser pointer to draw graffiti on the tallest building in Cambridge. He was happy to let us into his room, showed us the ropes, let us draw our own pictures. IHTFP. Freshmen: welcome to MIT!

Actuarial Finance Advanced Enterprise Risk Management Finance Essay - Free Essay Example

A rating-based credit model can typically be looked at as two separate parts; a credit sensitive component based on the firms rating and a non-credit sensitive part which looks at other factors which have an impact on a bonds price. There are two primary ways for identifying these factors as described below. The first way to identify factor structures is to take known factors which are likely to impact the price of the bond and then use multivariate regression techniques to identify each bonds exposure to the factor. These factors are commonly broken down into two categories: Fundamental factors These are factors which are specific to each individual issuer and can be derived from a companys annual report and accounts. For example, one factor could be the companys price to book ratio. Economic factors These are economic factors which are external to the company but known to affect the price of bonds. For example, these could include interest rates, exchange rates and / or commodity input prices. The second way to identify factors is through a statistical analysis. This method eliminates the need to have any prior knowledge about the factors affecting the bonds price. The idea of the statistical analysis is to identify other predictable time series that, in aggregate, can mainly explain the historic returns of the bonds in question. These time series are then our factors and we can calculate the exposure of each bond to each factor. The most common way to do this is through a principal component analysis. As seen in lecture notes, if we assume changes in credit ratings are independent of the other factors identified above then an r rated bond can be valued as below: Where represents the cash flow of the bond at time i. The term represents the impact on the price of the credit rating has, i.e. the discounting impact of the credit spread. The represents the price of a default free zero coupon bond paying 1 at time t, given it is currently time . Here we can build in the factor structure pricing model described above. A risk manager of the life insurer interprets the term tail dependency to mean correlations between returns in those cases where the return is relatively adverse over a relatively short time period, say, in the bottom 1% or 5% of outcomes in a given month. The risk manager asserts that bonds of similar duration issued by different companies typically exhibit higher tail dependency (as defined above) than their common stock, i.e. their equity share capital. (b) Identify economic reasons for and against this point of view. [6 marks] For: Corporate bond returns are largely driven by the underlying government bond yield (i.e the interest rate) of the same duration. Therefore, if the government bond yield at a particular duration rose sharply, the value of all corporate bonds at that duration would fall sharply, assuming credit spreads remained unchanged. A suitably large move in the government bond yield could result in all corporate bonds experience a bottom 1% or 5% outcome. Such correlations to a single underlying factor do not exist in equity markets. This is especially true for very long dated corporate bonds which are very sensitive to the underlying rate. The bottom 1% or 5% of outcomes for a bond is likely to be a default event or very close to default. A company defaulting is more likely to be a sign of hard economic times, than its common stock experiencing a tail event, which could easily be driven by a media event or localised disruption. In hard economic times you would expect the default rate to rise and credit spreads across the board to widen (i.e. tail events for a number of stocks). Equity returns are significantly more sensitive to a companys short term results (i.e. quarterly earnings and profit reports) than its bonds. These results which can trigger tail events in a companys equity are often released on different days and this observation would suggest equity markets have a lower tail dependency than bonds. Against When a companys bond has a tail event, its common stock is also likely to have fallen significantly, i.e. a tail event of its own. Therefore a tail dependency for two bonds would also imply a tail dependency for the companies common stock. Equities are much more sensitive to market sentiment in the short term than bonds. A bad market reaction to a particular piece of news can cause equity markets to crash sharply and sell off. In these situations there are rarely stocks that are exempt from the sell off and hence equities display a high le vel of tail dependency. Two bonds which have significantly different credit ratings are likely to be exposed to different factors and hence what may cause a tail event for one bond might not for another. For example, a high yielding C rated bond will be a lot more sensitive to market sentiment than a AAA rated bond and this division of market sensitivity is much less pronounced in equity markets. (c) Describe how you might test this assertion statistically. [5 marks] To test an assertion we first need to specify exactly what we want to test. We would therefore need to decide whether we are looking at the 5% or 1% tail event, what measure of tail dependence we want to look at and also which companies or markets we are talking about. We also then need to decide on what data we want to use to test the assertion. For example, we could use historic data for the specific companies or markets over the last X years. We would need to decide how many years to look at and in particular decide the relevance of major economic events and also consider if this history is likely to be a good representation of the future. Once we have decided on what data to use and collected this information we need to calculate the tail dependencies of pairs of bonds and the corresponding pairs of common stock. The tail dependence is given by Here, u is the level of tail dependence (i.e. the 1% or 5%) and the probability is calculated using the empirical CDFs or the two stocks and bonds given by the data. Once we have calculated the tail dependencies we need to check whether the hypothesis is true and also evaluate how significant the result is. For example, if the hypothesis holds in this one test but the tail dependencies are very close, there is little evidence to support the hypothesis. To further test the results we may wish to consider a longer time period, or splitting the period into a number of sub periods and seeing if the result still holds in each individual period. (d) Highlight types of insurance products the insurer might sell or investments the insurer might hold that would be particularly sensitive to correlations between different bonds or different equities in relatively adverse outcomes. [3 marks] The insurer may sell trade credit insurance to other businesses that are looking to insure against the credit risk in their accounts receivable. An increase in the correlation of credit events for the insurer, especially in adverse conditions, may trigger a high number of claims and have a large negative impact on their business. The insurer may hold a number of complex investments in credit derivative products which are highly sensitive to correlations in adverse conditions. For example an n-th to default credit derivative whereby a pay-out is made if more than n credit names default within a predefined basket. The price of the long position in the derivative will rise dramatically if there is likely to be a high correlation in the tail of bond markets. If the correlation is expected to be relatively low then it is likely even if one name defaults others will not follow and the price will be lower. Other such investment products particularly affected by the correlation in th e tail are iTraxx, CDOs, CDO-Squared, LSS and Quanto or diff swaps. The life insurer may also sell an insurance bond (or investment bond product) which allows investors to tax efficiently invest in an underlying investment fund. An investment fund which holds any of the above products will be exposed in the same way as the company to correlations in bond and equity markets. Question 2 [20 marks] (a) Summarise the main ways in which banks typical approaches to liquidity risk proved inadequate during the 2007-09 credit crisis and also summarise the main changes that Basel III is mandating to capital requirements for such risks in the light of these inadequacies. [5 marks] During the credit crisis bank balance sheets became very stretched. The majority of banks business models had relied on continued access to liquidity and I have set out a number of reason for this below. Prior to the 2007-09 credit crisis, bank risk models generally relied on past data to act as a guide to the future. Therefore stress tests carried out by banks largely underestimated the linkage between market liquidity and funding liquidity as such a scenario had not occurred before. They also had relatively little focus on developing new stress test scenarios so were caught out by the crisis. Furthermore, banks typically treated the funding cost of transaction with a maturity of less than one year to be equal. When the fear of the crisis set in and large spreads opened up between the costs of funding within the one year period (i.e. spread between overnight lending and 3 6 month LIBOR) many banks models become inadequate and had to quickly adapt. Banks also did not prop erly account for the funding and liquidity requirements of off balance sheet vehicles. Banks had largely seen these as standalone and separate from their main business, however, during the crisis banks found themselves facing large legal and reputational risks if these vehicles were not brought back onto the banks own balance sheets. This left the banks even shorter of liquidity. Additionally, a number of banks had taken out liquidity lines with other private sector firms, whereby the banks were able to access liquidity from these firms on demand. They had allowed for this provision of liquidity in their models, however, it became very difficult for banks to draw on this liquidity during the crisis. Banks found that if they were seen to be drawing on liquidity from these sources they were perceived to be more vulnerable and subsequently cut off from other sources of liquidity. Basel III has looked to address the inadequacy of banks liquidity management through two liquidity ra tios falling under pillar 1. The first of these is the Liquidity Coverage Ratio (LCR) which is designed to ensure banks hold sufficient high quality liquid assets such that they could survive and cover its net outflows over a 30 day period in a stress case scenario. The second is the Net Stable Funding Ratio which has a longer term focus and aims to encourage banks to fund their activities with stable sources of funding. Basel III also introduced additional liquidity monitoring metrics which look to address the mismatch of cash flow durations. (b) Review the risks that the pension fund might face if it enters into such a transaction and, if practical, propose refinements that might address these risks without invalidating the stated attractions of the transaction to the investment bank. You may assume that the transaction would relate to a sizeable proportion of the pension funds overall asset base. [9 marks] Firstly the pension scheme is exposed to the risk that the bank goes bankrupt and the contract becomes worthless. The pension fund would be left with a portfolio of illiquid, long-dated, less well rated corporate bonds. It may be the case that the pension scheme can sell these bonds and replace the original portfolio of bonds it had to begin with and be better off. However, in a situation where a bank has defaulted it is likely credit spreads will have widened and government yields fallen and the pension scheme would lose out and not be able to repurchase its original portfolio. One potential way to mitigate against this risk would be to invest through a pooled fund (like that run by FC) which pools pension scheme money together and put the above trade on with a number of banks, thus diversifying the risk of that one bank. Another potential solution is to enter the trade with the banks less liquid portfolio being valued at a significant haircut to market value, thus improving the likelihood of being able to replace the liquid portfolio should the bank go under. Another solution would be to require collateralisation of the difference in value between the two portfolios so that the pension scheme could regain its portfolio should the bank default. Given the purpose of the trade in the first place it would be sensible to let the bank collateralise the trade with similar illiquid holdings at a haircut. To further mitigate this risk the pension scheme could employ an investment advisor to help assess the constituents of the illiquid portfolio. Ensuring the portfolio is well diversified can help the portfolio to retain value and hence minimise losses in the event of the bank going bankrupt. The trade also introduces liquidity risk for the pension scheme, while it is true pension schemes are long term investors and are unlikely to be forced liquidators of assets, it does not mean that pension schemes are void of risks posed by low liquidity. Most of t he risks associated with low liquidity for a pension scheme are opportunistic ones. For example, suppose five years down the line, after having carried out the trade, interest rates move significantly and buyout conditions become favourable. The pension scheme would not be able to liquidate its assets for a year, in which time, markets may have moved again. Another example might be that the government wants to get pension schemes involved in infrastructure projects and offer a very attractive investment opportunity, again the pension scheme has its assets tied up and would miss out on this opportunity. There is little to be done to mitigate this risk as the pension scheme is effectively receiving a premium for its liquidity. Reducing the pension scheme illiquidity by, for example, shortening the notice period, would reduce the premium it was being paid. The only way to slightly reduce this risk without reducing the attractiveness of the trade for the bank is to ensure that the contract can be traded on the secondary market (i.e. if the pension scheme wants to get out within the years notice period, it could find another pension scheme to take its place in the trade). The easiest way for the pension scheme to do this is again to use a pooled fund. The low number of pooled funds currently offering this type of product improves the chances of the pension scheme finding a buyer in the secondary market. (c) Propose 3 reverse stress tests that might be used when reviewing and discussing the risks involved in such a transaction and indicate with reasons which of your proposed reverse stress tests might be the most plausible way in which a typical UK (defined benefit) pension fund might run into significant trouble with the proposed transaction. [6 marks] If the trade was carried out on a sensible part of the pension schemes assets it is likely an accumulation of events will need to have occurred to put the pension scheme into financial difficulties (i.e. not being able to make benefit payments as they fall due). I believe the most likely scenario is that the world economy falls into recession, leading to rising default rates and widening credit spreads. Further, the bank with which the pension scheme had entered the trade with collapses. The pension scheme is left with a portfolio of illiquid corporate bonds which are trading at extremely distressed levels due to the widened credit spreads. To add to the pension scheme woes all the growth assets are likely to have also fallen in value, while the value of their liabilities rise as gilt yields fall. In addition to the bank defaulting and credit spreads rising as two reverse stress tests, the pension scheme could be put into trouble if it faced a large portion of members request ing transfer values. This could potentially lead to the pension scheme having to sell all its liquid assets to meet these transfer values. In the extreme case, the one year lock in period could lead to the pension scheme not having assets to sell to meet its on-going benefit outgo.