Silver fiddle construction case study

Chapter 7 Managing Risk 241

lar38865_ch07_212-257.indd 241 08/05/19 06:00 PM

Case 7.1

Alaska Fly-Fishing Expedition* You are sitting around the fire at a lodge in Dillingham, Alaska, discussing a fish- ing expedition you are planning with your colleagues at Great Alaska Adventures (GAA). Earlier in the day you received a fax from the president of BlueNote, Inc. The president wants to reward her top management team by taking them on an all- expense-paid fly-fishing adventure in Alaska. She would like GAA to organize and lead the expedition.

You have just finished a preliminary scope statement for the project (which fol- lows). You are now brainstorming potential risks associated with the project.

1. Brainstorm potential risks associated with this project. Try to come up with at least five different risks.

2. Use a risk assessment form similar to Figure 7.6 to analyze identified risks. 3. Develop a risk response matrix similar to Figure 7.8 to outline how you would deal

with each of the risks.

PROJECT SCOPE STATEMENT

PROJECT OBJECTIVE To organize and lead a five-day fly-fishing expedition down the Tikchik River system in Alaska from June 21 to 25 at a cost not to exceed $45,000.

DELIVERABLES ∙ Provide air transportation from Dillingham, Alaska, to Base I and from Base II

back to Dillingham. ∙ Provide river transportation consisting of two eight-person drift boats with out-

board motors. ∙ Provide three meals a day for the five days spent on the river. ∙ Provide four hours of fly-fishing instruction. ∙ Provide overnight accommodations at the Dillingham lodge plus three four-person

tents with cots, bedding, and lanterns. ∙ Provide four experienced river guides who are also fly fishermen. ∙ Provide fishing licenses for all guests.

MILESTONES 1. Contract signed January 22. 2. Guests arrive in Dillingham June 20. 3. Depart by plane to Base Camp I June 21. 4. Depart by plane from Base Camp II to Dillingham June 25.

*This case was prepared with the assistance of Stuart Morigeau.

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242 Chapter 7 Managing Risk

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TECHNICAL REQUIREMENTS 1. Fly-in air transportation to and from base camps. 2. Boat transportation within the Tikchik River system. 3. Digital cellular communication devices. 4. Camps and fishing conforming to state of Alaska requirements.

LIMITS AND EXCLUSIONS 1. Guests are responsible for travel arrangements to and from Dillingham, Alaska. 2. Guests are responsible for their own fly-fishing equipment and clothing. 3. Local air transportation to and from base camps will be outsourced. 4. Tour guides are not responsible for the number of king salmon caught by guests.

ACCEPTANCE CRITERIA The president of BlueNote, Inc. reviews.

Case 7.2

Silver Fiddle Construction You are the president of Silver Fiddle Construction (SFC), which specializes in build- ing high-quality, customized homes in the Grand Junction, Colorado, area. You have just been hired by the Czopeks to build their dream home. You operate as a general contractor and employ only a part-time bookkeeper. You subcontract work to local trade professionals. Housing construction in Grand Junction is booming. You are ten- tatively scheduled to complete 11 houses this year. You have promised the Czopeks that the final costs will range from $450,000 to $500,000 and that it will take five months to complete the house once groundbreaking has begun. The Czopeks are will- ing to have the project delayed in order to save costs.

You have just finished a preliminary scope statement for the project (which fol- lows). You are now brainstorming potential risks associated with the project.

1. Identify potential risks associated with this project. Try to come up with at least five different risks.

2. Use a risk assessment form similar to Figure 7.6 to analyze identified risks. 3. Develop a risk response matrix similar to Figure 7.8 to outline how you would deal

with each of the risks.

PROJECT SCOPE STATEMENT

PROJECT OBJECTIVE To construct a high-quality, custom home within five months at a cost not to exceed $500,000.

DELIVERABLES ∙ A 2,500-square-foot, 2½-bath, 3-bedroom, finished home. ∙ A finished garage, insulated and sheetrocked.

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