Response 1 to Eric’s M7D1: When a Project Gets Risky

22Feb 2022 by
This is a response to my one of my peer’s discussion post.  Please read original discussion post and peer’s discussion response post instructions, as well as my original discussion post and ‘s original discussion post for perspective. Additionally, please use references, other references and attachments to support response.
Peer’s Discussion Post Response Instructions: 
Identify the peer’s position and identify whether the ideas would work. Why or why not?
Eric’s discussion Post:
Historically, you have done business with AAA Concrete and the husband and wife owners, Marvin and Betty. Unfortunately, they have decided to retire and have turned the business over to their three children. You have heard rumors that the children do not offer the same quality materials as their parents, which could pose a significant problem given that the restaurant will have a large concrete balcony for alfresco (fresh air) dining. Would this be considered a risk to the project? Why or why not? What, if anything, should you do as the project manager?A risk is an uncertain event that can jeopardize accomplishing the project objective if it occurs (Gido & Clements, 2012, p. 285). This is absolutely a risk to the project because as the project manager (PM) we have identified a supplier that weve historically used before, but some internal changes have occurred with this supplier. So, a few questions that the PM has to ask themselves is would they continue to do business with this supplier, with rumors that the new management doesnt supply quality materials as their predecessors. Keep in mind that these are just rumors rumors are rumors and at this point since the PM hasnt done business with the new management, its almost impossible to validate these rumors. Another question that the PM has to ask themselves is this if they do change suppliers, will the change allow sufficient time to complete the project. Lastly, if the PM decides to conduct business with the new management of AAA Concrete and the rumors of lesser quality materials are true and the turnout of the alfresco is less than desirable, then this decision could prove disastrous for the PM going forward. Furthermore, negative rumors about the PMs work could start to circulate and this also, could be bad for business.One of the employees on the project has been approached by someone they know about purchasing a second-hand (used) commercial freezer and oven. The savings could be significant (around $50,000) compared to purchasing the new items. What should you as the project manager do in this situation? What support do you have for that decision? Does the availability of used appliances pose risk to the project? If accepted, would a change document be necessary?The project manager (PM) needs to know if the second-hand equipment comes with any types of warranties (InHouseOwl, 2015) and also what is the life expectancy of the equipment. If the equipment is purchased as is then the owner of the new restaurant could be faced with hundreds, maybe thousands of out-of-pocket expenses. Some dealers of used equipment may offer a limited time warranty for used kitchen equipment (SilverChef, 2021). Also, maintenance for new and used equipment and the availability of parts for used equipment should be taken into consideration. So, the $50,000 in savings for purchasing used equipment could easier become $50,000 is maintenance repairs and costs.Provide a third scenario relating to risk. How would you handle the new instance as project manager?We have discussed project risk management in great detail and the plethora of ways to combat risks. One risk factor that can truly put a damper on a project is environmental (natural disaster) risks (Project Manager, 2014). If a project is depending on several different deliveries of raw materials but natural disasters such as earthquakes, monsoons, hurricanes, etc, can severely change the outcome of a project. Its extremely different to plan, let alone plan for natural disasters. In most of these cases the PM needs to communicate the bad news to the stakeholders. However, the disaster risk management approach can assist the PM. There are five steps in the disaster risk management: 1. Prevention PM can evaluate the history of natural disasters of the area(s) from which the raw materials are derived 2. Addressing residual risk as alluded to earlier, planning for natural disasters is extremely difficult so the PM should take into consideration if a natural disaster does occur, what are the residual next steps, 3. Preparing this is an extension of step 2 of when the natural disaster does happen, the PM needs to have back up plans which include alternate sources of supplies and suppliers, 4. Responding the PM needs to make contact with the alternate supplies before the project commences and inquiries about lead times, short-notice expenses, etc. and 5. Recovering simply implementing some of the alternate sources of supply (EasyFilmsTM, 2017).
 
 
Instructions and References:
Risk is a part of every business and project. Identifying and eliminating as much risk as possible are the duties of the project manager. Maintaining change/version control documents to validate changes in project scope is essential to ensure that the project will be paid for and the customer will accept the project upon completion.Respond to the following:
You are the project manager for a new restaurant. The project includes construction of the physical building, equipping the kitchen to commercial standards, and ensuring that the kitchen has all essential elements and may be safely used to produce cuisine for customers. As the project progresses, you identify several areas with increased risk and approach the customer with suggestions for addressing the new risk. One area of concern is the change of management at a supplier. Historically, you have done business with AAA Concrete and the husband and wife owners, Marvin and Betty. Unfortunately, they have decided to retire and have turned the business over to their three children. You have heard rumors that the children do not offer the same quality materials as their parents, which could pose a significant problem given that the restaurant will have a large concrete balcony for alfresco (fresh air) dining. Would this be considered a risk to the project? Why or why not? What, if anything, should you do as the project manager?
One of the employees on the project has been approached by someone they know about purchasing a second-hand (used) commercial freezer and oven. The savings could be significant (around $50,000) compared to purchasing the new items. What should you as the project manager do in this situation? What support do you have for that decision? Does the availability of used appliances pose risk to the project? If accepted, would a change document be necessary? Justify your answer.
Provide a third scenario relating to risk. How would you handle the new instance as project manager? Please provide details.
Textbook:
Larson, E. W., & Gray, C. F. (2021). Project Management: The Managerial Process (8th ed.). New York, NY: McGraw-Hill Companies, Inc.
Chapter 7: Managing RiskChapter 13: Progress and Performance Measurement and Evaluation
 Thanks!

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