John Exchanging Integrated (JEI), is a subsidiary of Elegance. JEI is a securities trading firm specializing in debt and equity securities transactions mostly traded on the NASDAQ. JEI is listed on NASDAQ. Also, at the request of their customers, JEI will charge a fee to receive or place money transfers from or to accounts all over the world. The minimum fee is $10 for buying or selling stock and $25 for money transfers. The maximum fee is $500,000 for stock transactions and 2% for money transfers. A minimum fee of $100 is also charged for redemptions. To become a customer, simply complete an on-line application and deposit a minimum of $10,000. Customers begin trading immediately. Yong Wei is the CEO of JEI. Yong does not serve on the audit committee of JEI. In January of 2015, Crystal Lee, Director of JEI’s internal audit department, completed an audit of various functions of the company. Part of the audit involved a review of internal controls for the sales, payable and payroll functions including the controls over the authorization of transactions, accounting for transactions, and the protection of assets. The director reported the following issues to Yong Wei:

1. The petty cash custodian confesses to having “borrowed” $9,010 over the last two years. The custodian promises to repay every penny, with interest, as soon as possible.

2. An employee in accounts payable maintains the accounts payable subsidiary ledger.

3. In June of 2015, JEI was notified that their proprietary information would be broadcast on the Internet if they did not pay a $17 million fee. The hacker was caught by the FBI before any damage was done.

4. In November of 2015, JEI customers were notified by e-mail that their accounts had been compromised and were being restricted unless they re-registered using an accompanying hyperlink to a Web page that had JEI’s logo, home page design, and internal links. The form had a place for them to enter their credit card data, ATM PINs, Social Security number, date of birth, and their mother’s maiden name. Due to the diligent efforts of Tommy Lew, JEI customer information was not breach, according to internal sources.

5. When entering a large credit sale, the clerk typed in the customer's account number as 45982 instead of 45892. That account number did not exist. The mistake was not caught until later in the week when the weekly billing process was run. Consequently, the customer was not billed for another week, delaying receipt of payment.

6. A batch of 73 time sheets was sent to the payroll department for weekly processing. Somehow, one of the time sheets did not get processed. The mistake was not caught until payday, when one employee complained about not receiving a paycheck.

7. Attackers broke into the company’s information system through a wireless access point located in one of its trading branches. The wireless access point had been purchased and installed by an office manager without informing central IT or security.

Your company is considering three mutually exclusive investments as described in the table below. Based on a 15-year study period and 10% MARR, you are tasked to determine which investment should be selected. Investment Option 1: Initial Investment: $56,000 Net Annual Revenue: $9,000 Salvage Value: $5,000 Useful Life: 22 Investment Option 2: Initial Investment: $80,000 Net Annual Revenue:$11,500 Salvage Value: $5,000 Useful Life: 15 Investment Option 2: Initial Investment: $76,000 Net Annual Revenue: $11,000 Salvage Value: $3,000 Useful Life: 11 Note: The repeatability assumption cannot be applied. Hint: imputed market value technique will need to be applied to Investment 1 and assume cotermination at 15-years with reinvestment for Investment 3. What is PW of each options? What is the PW of the Investment option 1?

Williams Ltd manufactures and sells a single product. The selling price is R18. The following information relates to its yearly production and cost data. (Assume that there is no change to the stock level of the company.)
Unit Total
Year Volume Cost R
1 300 000 4 000 000
2 150 000 2 800 000
3 420 000 6 600 000
4 280 000 3 900 000
5 230 000 3 200 000
6 120 000 2 100 000
Required:
1. Based on the above cost and volume data, use the high–low method to identify variable cost per unit and annual fixed costs for the company.
5 marks
2. On the basis of your answers in part (1) above, calculate the breakeven point of the company in both units and sales revenue.

Please answer the case study question in detail

1-What are the advantages of using DCH International Logistics? What are the advantages of having a bonded warehouse? How can it help doing international business?

2-Why does La Cafetiere want to enter the Chinese market and what are the supply chain issues faced?

3- How could DCH redesign the logistics flow for La Cafetiere? (explain the benefits of a solution)

DCH Logistics -Planning for La Cafetiere

Abstract. The study demonstrates the approach of global supply chai1t restructuring by OCH Logistics, a world-rcno\\'11cd Hong Kong-based third-party logistics service provider (3PL) for its client La CafctiCrc in the area of warehousing and tr 111spo11ation as well as customer services suchas packaging) procurement> custom dccl::untion> bonded warehousing, hygiene and quarantine. The case enables insights into the advantages of having a local logistics services provider that knows the local market,environment and regulations specifically to shorten thcs-upply chain lcad­ time, reduce inventory level, and most importantly improve customer satisfaction as well as other comprehensive supply chain activities. Furthcnnore, the case develops common supply-chain issues multi-nationals face on an operational level., especially in China.

Introduction

Early in the morning,David Kuk, the Managing Director of Dah Chong Hong Logistics Company Ltd.(OCH Logistics) was enjoying a cup of Starbucks espresso. He was with Martyn Cooling, Operations Senior V ice President of la Cafetiere waiting in Hong Kong for the cross-border shuttle bus. They were going to visit the DCH Logistics International Logistics Center in Xinhui, Guangdong Provi nee, China.

Kuk and Cooling met each other in 2005 when both were attending HOFEX2• During that casual meeting, they explored the possibility of a strategic cooperation between DCH Logistics and La Cafetiere. At that time, Cooling confided to Kuk that in the past few years, La Cafetiere was experiencing some serious late delivery problems to its global sales agents and distiibutors. Kuk commented,that this was potentially a huge loss of reputation and profit, if La Cafetiere's products could not reach the international market on a timely basis, especially for a company that enjoyed over 70 yearsof history in Europe in the manufacture and disn·ibution of coffeemakers.3 While he was finishing his last sip of the espresso, he was asking himself,"What was going wrong with La Cafetiere's logistics flow? How could OCH Logistics play a role in the redesigning of La Cafetiere's logistics network?"

OCH Logistics

OCH Logistics is a world-renowned, Hong Kong-based, thi rd-pa1ty logistics (3PL) service provider that was 01iginally a logistics section of OCH Trading. In 200 I , DCH Logistics, previously called Sims Logistics was acqui red by Dah Chong Hong Holdings (OCH Holdings). The company designs and provides value-added supply chain and logistics solutions to international clients.

OCH Logistics' main target customers were companies that ( I ) were in the fast moving consumer goods (FMCG) business, (2) did not have a prominent physical presence,and (3) had little business expe1ience in China and Hong Kong but with large business expansion potential in the region. OCH Logistics competencies were in well established warehousing and distribut.ion centers, comprehensive lT system support, and professional logistics management personnel.

Its strong business re lations with the parent company ClTIC Pacificenabled DCH L-0gistics broad access toa global distJ·ibution network.Consequently, within a few years, it had built a firm business foundation in the Pearl River Delta (PRO) region and DCH Logistics became an official import agent in China handling customs, hygiene, and quarantine procedures for its clients.

3.        OCH International Logistics Center (Xinhui)

When the bus arrived at Xinhui, Kuk explained that the DCH International Logistics Center (hereinafter called Xinhui LC) started operations in 2006.Of its approximately 479,520 m2 floor space, 1 16,044 m2 was dedicated for common, import and export-bonded warehouses and affiliated centers for domestic logistics, dishibution, repackaging, and food processing. Kuk further explained that: The common warehouse occupies an area of 20,000 m2 and it is equipped with an advanced inventory management system (SLS).

The import bonded warehouse (the first in Jiangmen city) occupies an area of 68,000 m2• It is also equipped with advanced warehouse management and secwity systems and that enables it to provide customs clearance using the Chinese Customs' H2000 A utomated Declaration System . With this facility, the Xinhui LC is able provide bonded warehousing5 services such as storage of impo1ts and re-expo1t. of goods, including fuel which it supplies to international navigation of vesse ls and aircraft, as well as mate1ials and maintenance components.

The export bonded warehouse, which was set up after successfully establishing a processing center and impo1t bonded warehouse, was also the first of its kind in both Xinhui po1t and the Western Pearl River Delta.The expo1t bonded warehouse, which commenced operations in October 2006, covers 8,000 m2 and is equipped with an elec!J·onic secmity surveillance system as well as an electronic records management system and the Customs H2000 system . The expo1t bonded warehouse includes an office for processing all impo1t and expo1t fonnalities which allows it to work closely with the Jiangmen Customs Office and the China Inspection and Quarantine Bureau (CIQ).

The Xinhui LC was located next to Tianma Port, which was second in throughput volume to Yantian Port with a first-class freight terminal in Guangdong. Cargo only needed two homs to reach major manufacturing cities such as Zhongshan, Foshan or Dongguan and one day to reach Hong Kong.

Kuk fu1ther explained the role of the X inhui LC: The center integrates a ll logistics and related services into 01te site. It isstrategically importaJlt for DCH Logistics to cater for the national logistics network. It serves as a depot to transport products from Xinhui to other DCH's logistics centers in other parts of China for regional distribution. He continued to share why periphery cities chose to do business with the X inhui LC: Our climate and humidiry-controlled warehouses encompass 78,000 m2. Our rents are about seven times lower than those in Europe and three times lower than in Hong Kong. They are up to HACCP6 and 1509000 sta ndards, equipped with CCTV, and Global Positioning System for securi ty and tracking distri burion.Our logistics solutionssystem makes it easy for our clients to manage their inventory and enquire about storage and shipment information via Internet. We offer our clients a one-stop logistics solution including product inventory, shipping arrangement, freight forwarding, container haulage, vendor ma11agement, and other as-needed serv ices.

Kuk emphasized that other than the basic logistics services,bonded cargo consolidation wasone of the major value­ added services provided by the Xinhui LC. Clients often needed consolidation services for goods from multiple manufacturers, so that each manufacturer did not have to transport its parts from the Western PRO region to Yantian Po1t in Shenzhen for export.

Product packaging was another key value-added service for its bonded warehouses. Finished goods that were shipped in bulk required packaging into different retail configurations.He clarified that:"We not only pack and repack goods according to the requested size, volume and formrut but also do barcoding, printing, labeling, sourcing, etc.. Packing services are quite simple for us. We have access to plenty of expe1ienced temporary low cost workers from the local labor market."

La Cafetiere's Entry into China

Cooling was very much impressed by the development of the Xinhui LC. However, meeting the timely needs of the Chinese growing market had been a challenge to La Cafetiere. He explained that La Cafetiere positioned itself as a design-d1iven brand,a trendsetter in coffee and tea making products.Since the mid-1990s,it no longer engaged in actual product manufactmiog but relied on trusted OEM manufacturers in China, I ndia and A frica. The 40 direct staff in the UK headquarters were primmily involved in the design, development, sales/marketing, and disuibution of the La Cafetiere brand around the world

The two classic bestsellers ''La Cafetiere" and "Moka Express", as well as other sophisticated and innovative models of coffee makers and teapots kept the company uniivalled for decades New products, less than 3 years old since rollout, accounted for over 40% of annual sales turnover. More strikingly, geographical market expansion drove sales figures up, as Cooling desc1ibed: Prior to 2000,sales were still based on the UK market but starting in 2000 export sales had been developing in the US, Asia, Australia, and Africa . In the past three years, sa les have grown rapidly at a rate greater than 20% per annum, especially with the sudden rise of the China demand. We simply need more flexibility in production and distribution to cope w ith the new market.

The Logistics Flow

Cooling continued to share that since 2000, several Asian designers were employed in designing products specifically for the China market because it was the major development focus for La Cafetiere.However, the company began to experience late product delivery when manttfacturing was expanded extensively to China staiting in 2000.He added that each manufacturer was only responsible for a specific type of product with a specific design layout and using specific raw materials from tbe UK, but they were all located in cities aiound the PRD such as Yangiiang, Zhongshan and Zhuhai .When individual manufacturers finished their produ ction,they could not ship productsdirectly from the PRO ports but had to transport products individually to Yantian Po1t in Shenzhen for custom clearance in order to ship to the UK .He said: The lead-time for manufacturing coffeemakers in China is about 30 days. Shipmenc of finished products to the Port of Felixstowe takes another 30 days. Even !hough products are landed, we have to take another 3 to 4 days to transport products from our distribution center to sales agents in Europe. It is even worse for customers in Asia because they have to wait for another 30 days. Productshave to go through another round of custom cleara nce;despite the fact they are "Made in China".We have received thousandsof complaints from o:ur customersabout late delivery since 2004.To make matters worse, our Chinese manufacturers sometimes could not make on-time delivery during our peak sales period from September to December.

The practice in the ctment logistic nehvork is to produce minimum quantities of 3000 sets of coffeemakers to fill a 40 feet container in order to minimize the shipping cost per set. However, quality conuul is done in the UK, leading to the burden that products with quality problems would need to be returned to China.This involved complicated customs clearance procedures. Some products in the past t1<1velled back and forth between China and the UK several times.

6.     The Distribution Center in the UK

Across the ocean, La Cafetiere had only one distribution center (DC) near Chester in the UK for warehousing and logistics services, which the company had been using since the 1960s.Even though the capaci ty of the DC could load up to 200 pallets of finished goods, m uch space was used instead for keeping raw mateiials. Despite its 24 hours,6 days a week operation, the DC suffered from late delivery to its customers. As a result,Cooling revealed that his customers had been asking La Cafetiere to maintain a large inventory of each product item in the DC.

Cooling understood that he could request for mass production aod bulk shipment from the Chinese manufa cturers. This would reduce the average cost per set of prod uct. However, it was a fact that the DC simply did not have enough space to entertain a large quantity and diversity of"made toorder"products, particularly when many of itsclients tended to make orders in small quantities. He added that La Cafetiere once considered expanding the DC, but it found that it was too costly to upgrade such an old facility . Another practical aspect was that the company could not find the land needed for the expansion.

Operationally speaking, every order request and product delivery had to pass th rough the DC in the UK. As the shipping was not always punctual,when shipments a11'i ved .at the DC, its 15 employees had to move quickly to unpack, repack and ship the goods tocustomers around the world.The Logistics Manager,who was stationed in the UK, had to manage all aspects of the product dish·i bution from suppliers to end customers, including inventory and quality control. He realized that it became too difficult for his staff toadhere to the com pany policy of delivering products tocustomers in the UK and Europe within 24 how·s upon order receipt,even though products could aJTive at the DC on time.

Another source of stress was that the DC was unable to support the upsurge in demand in the China Market. In the best case, it took approximately 3 months for final products to anive to the Asia market. Thus, in addition to the nearly 3000 com plaints received so far this year, the logistics manager was already anticipating that more Lnte delivery com plaints would be received from its China customers.

7.     OCH Logistics' Experience

Cooling's concern reminded Kuk of a past project with Almond Roca candies in 2005. Its brand owner,Brown & Haley, also faced a similarproblem at the time when it was required toship packaging mate1ialsall the way from manufochtrers in China to candy producers in the US just for packing,but in fact, the candies were to be sold in China and Southeast Asia. Kuk helped Brown & Haley consolidate the logistics flow by primaiily offeiing packaging services in Xinhui LC together with an mrny of follow up a!1'angements, including quality control, warehousing, inventory, shipment, transportation and sales responses.But this time, how could he redesign the logistics flow for La Cafetiere? Kuk was trying tocome up with an attractive solution for La Cafetiere's late delivery problems. Jn addition be wanted to explain the benefits of a solution involving DCH Logistics. Over 600 professional staff in logistics teams i n Hong Kong> Macau and Main land China provide logisticsservices toclients in the business sectors of consumer products, catering products, health care products, phannaccuticals> gannent manufactuling,and catcling.

OCH Logistics operates ambient, temperature-controlled and refrigerated warehousing as well as a multi-temperature fleet of l 04 GPS-instalJcd vehicles in vaiious sizes of capacities from 2.2 wt. to 24 wt. tons. Storage control system and logistics procedures arc computerized by applyiJlg the Dallas Warehouse Management System and the Oracle Enterprise Resource Planning System. In addition to warehousing and distribution services, the company also provides other suppo11ing services, such as customsdcclarnrion , packing and re.packing> import and export shipment handling and cargo consolidations, food safety testing. etc.

Macau

In Macao> the logistics disttibution center in Coloanc is providing dry aild cold storage facilities so as to provide sen•iccs to hotels and casinos. The Group is the biggest logistics services provider for \Vynn Casino & Rcso11, and is providing its service to a growi ng nwnbcr of hotels and casinos.

China

In mainland China> OCH Holdings has developed au lntcmational Logistics Center in Xinhui> \'lh ich can providea one-stop professional logistics service to its princi pals and third-party customers incl uding storage, rcpacki n& c.ustoms clcnrancc, cargo forwarding and  olhc.r val ue-added services. The Cent re has difiCrcnt v.rarc.houscs, such as bonded warehouses for impo11and export, to cater for different needs of customers. CutTcntly, it is serving Lee Kam Kee, V inda Tissues Paper and \Val-Mart (China) and other reputable c.ustomc.rs in Mainland China. DCH Logistics is actively developing the freight forwarding business wi1h multi-national corporations for expo11ing their products using its consolidation service at the export-bonded warehouse.

La CafcriCrc was c.stablishcd in 1936 in London, UK. l11c company manu fucturcd and sold a variety of products for the housewares industty in the UK under the name '"Household Atticlcs".In the 1960s> the La CafctiCrc r::tngc of coffee and tea 111aki11g products were added and these now form the core business and build u p the brand name of La CafctiCrc in tbc UK and many cxpo11111arkcts. Besides its own branded products. La CafctiCrc also distri butes for Bi::iJc1ti, established since 1930s and now the world's largest manufacturers of stove-top espresso pots. l11c Guido Bcrgna (gB) rnngcof stainless steel> espresso pots and acccssotics arc aJso available together with an electrical range from Dc'Longhi> another long-establishe.d J talian coffee specialist.

The company currently employs approximately 40 direct staff who a1·e primmi ly iJwolvcd in the design development, sales/marketing and distri bution of La CafotiC:rc around the world. It depends on supply partne.rs in China. Lndia and Aftica to manufacture products on a confidcntiaJ excl usive basis. La CafetiCrcd ircc.tly scUs its products to customers in the UK> making use. of a combination of direct sales through national accounts, sales agents for smaller independent customers and telc-salcs for all kinds of accounts. In the US, a network of commissioned sales representatives has been developed whereas in other tcnitoriesJ exclusive sales agents and distributors arc appointed by La CafctiCrc. 1l1e International Sales Manager is responsi ble for dircctJy handling major US accountsand suixrvisingaccounts in other regions.

We know the distribution of potato weights arriving to a potato processing factory follows a normal distribution with mean of 120 grams and standard deviation of 20

1. What is the probability (proportion) of product expected to be less than 100 grams?

2. What is the probability (proportion) of product expected to be more than 135 grams?

3. What is the probability (proportion) of product expected to be less than 90 grams and more than 150 grams?

3 customers a minute arrive at a toll booth

1. What is the probability that 0 customers will arrive in a minute?

2. What is the probability that 1 customer will arrive in a minute?

3. What is the probability that 2 customers will arrive in a minute?

4. What is the probability that 2 or less customers will arrive in a minute?

5.What is the expected value (mean) and variance?

The Mysterious Case of the Loaded Leprechaun

The Loaded Leprechaun (hereafter, the Leprechaun) is a popular chain of Irish-themed restaurants with locations in tourist hotspots across the United States, including Boston, Chicago, Las Vegas and New York. The bills itself as “America’s Greatest Brew Pub” and specializes in excellent steaks and six varieties of beer that are brewed in-house at each location.

The Leprechaun has been owned and operated as a private company since its founding in 1948 by the O’Shaughnessy family (for the purpose of the study, assume the company applies IFRS). One of the great traditions at the Leprechaun is the “Dollar Holler.” Patrons (i.e., customers) personalize dollar bills by writing a message or drawing a picture with a permanent marker and then staple the dollar to the ceiling, wall, banister, or any other available surface in the restaurant. As each dollar goes up, the employees let out an appreciative yell. Patrons supply the dollar bills themselves, although the wait staff will make change for customers who need dollar bills. Each customer is allowed to place as many dollar bills as they like on the walls, and most place at least one dollar bill on the wall per visit.

Over the years, this tradition has grown in popularity, and the O’Shaughnessy family estimates that the average restaurant has accumulated more than $1 million in personalized dollar bills. The dollars are not regularly counted, and the wait staff does not participate in any accounting for dollar bills, other than by asking the customers not to remove existing dollar bills, a problem that the company frequently encounters.

Discuss the financial reporting issues focusing on:
(1) How should the management account for these “Dollar Holler” dollars? (What are the journal entries?)
(2) How should the company account for the theft of “Dollar Holler” dollars?
(3) How should the company report the “Dollar Holler” dollars in the financial statements?

On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances:

During January 2021, the following transactions occur:

The following information is available on January 31, 2021.

1. The company estimates future uncollectible accounts. The company determines $4,500 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
2. Supplies at the end of January total $750.
3. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31.
4. Unpaid salaries at the end of January are $35,100.

What would this journal entry be:

The company estimates future uncollectible accounts. The company determines $4,500 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) Record the adjusting entry for uncollectible accounts.

This is the complete question. I think an Anova needs to be done to it?

Scenario

You are an information technology (IT) intern working for Health Network, Inc. (Health Network), a fictitious health services organization headquartered in Minneapolis, Minnesota. Health Network has over 600 employees throughout the organization and generates $500 million USD in annual revenue. The company has two additional locations in Portland, Oregon and Arlington, Virginia, which support a mix of corporate operations. Each corporate facility is located near a co-location data center, where production systems are located and managed by third-party data center hosting vendors.

Company Products

Health Network has three main products: HNetExchange, HNetPay, and HNetConnect.

HNetExchange is the primary source of revenue for the company. The service handles secure electronic medical messages that originate from its customers, such as large hospitals, which are then routed to receiving customers such as clinics.

HNetPay is a Web portal used by many of the company’s HNetExchange customers to support the management of secure payments and billing. The HNetPay Web portal, hosted at Health Network production sites, accepts various forms of payments and interacts with credit-card processing organizations much like a Web commerce shopping cart.

HNetConnect is an online directory that lists doctors, clinics, and other medical facilities to allow Health Network customers to find the right type of care at the right locations. It contains doctors’ personal information, work addresses, medical certifications, and types of services that the doctors and clinics offer. Doctors are given credentials and are able to update the information in their profile. Health Network customers, which are the hospitals and clinics, connect to all three of the company’s products using HTTPS connections. Doctors and potential patients are able to make payments and update their profiles using Internet-accessible HTTPS Web sites.

Information Technology Infrastructure Overview

Health Network operates in three production data centers that provide high availability across the company’s products. The data centers host about 1,000 production servers, and Health Network maintains 650 corporate laptops and company-issued mobile devices for its employees.

Threats Identified

Upon review of the current risk management plan, the following threats were identified:

• Loss of company data due to hardware being removed from production systems
• Loss of company information on lost or stolen company-owned assets, such as mobile devices and laptops
• Loss of customers due to production outages caused by various events, such as natural disasters, change management, unstable software, and so on
• Internet threats due to company products being accessible on the Internet
• Insider threats
• Changes in regulatory landscape that may impact operations

Management Request

Senior management at Health Network has determined that the existing risk management plan for the organization is out of date and a new risk management plan must be developed. Because of the importance of risk management to the organization, senior management is committed to and supportive of the project to develop a new plan. You have been assigned to develop this new plan.

Additional threats other than those described previously may be discovered when re-evaluating the current threat landscape during the risk assessment phase.

The budget for this project has not been defined due to senior management’s desire to react to any and all material risks that are identified within the new plan. Given the company’s annual revenue, reasonable expectations can be determined.

Project Part 2 Task 2: Business Continuity Plan (BCP)

After having reviewed and being impressed by your business impact analysis (BIA), senior management at Health Network has decided that your team must also develop a BCP. Management has allocated all funds for a BCP and your team has their full support, as well as permission to contact any of them directly for participation or inclusion in your BCP plan. You have been assigned to develop this new plan.

Winter storms on the East Coast have affected the ability of Health Network employees to reach the Arlington offices in a safe and timely manner. However, no BCP plan currently exists to address corporate operations. The Arlington office is the primary location for business units, such as Finance, Legal, and Customer Support. Some of the corporate systems, such as the payroll and accounting applications, are located only in the corporate offices. Each corporate location is able to access the other two, and a remote virtual private network (VPN) exists between each Production data center and the corporate locations.

The corporate systems are not currently being backed up and should be addressed in the new plan. The BCP should also include some details regarding how the BCP will be tested.

You may refer to the following additional resources to help you and your team develop a BCP, and you may use a BCP template if found during your research.

References:

• Guide to Business Continuity Management: Frequently Asked Questions (Protiviti, 2013),
  http://www.protiviti.com/en-US/Documents/Resource-Guides/Guide-to-BCM-Third-Edition-Protiviti.pdf
• Business Continuity Plan (Ready.gov), http://www.ready.gov/business/implementation/continuity

Evaluation Criteria and Rubrics (Ask these questions to yourself)

• Did I develop a BCP that could recover business operations while efforts are ongoing to restart pervious operations?
• Did I completely fill out a BCP template if found during their research?
• Did I completely understand BCP concepts presented in class?
• Did I develop a BCP test plan with correct processes?
• Did I create a professional, well-developed report with proper grammar, spelling, and punctuation?

Project Part 2 Task 3: Disaster Recovery Plan (DRP)

Your project on risk management, the BIA, and the BCP have been well received by senior management at Health Network. They now want you to develop a DRP in order to overcome any mishaps that might occur in the future. You may research and use National Institute of Standards and Technology (NIST) templates to develop a DRP plan for the company.

Evaluation Criteria and Rubrics (Ask these questions to yourself)

• Did I develop a DRP that could recover business operations while efforts are ongoing to restart pervious operations?
• Did I completely fill out the template found in their research?
• Did I completely understand the DRP constructs presented in class?
• Did I create a professional, well-developed report with proper grammar, spelling, and punctuation?

In 2015, Apple released its ninth annual supplier responsibility report. In it, the company said that in the past year it had carried out 633 audits of factories in its global supply chain, covering 1.6 million workers in 19 countries—including the massive facilities operated by Foxconn in China, where most of its iPads and iPhones were made. Apple’s own auditors had conducted these inspections, supported by local third-party experts.

The supply chain audits had turned up some persistent problems. Eight percent of workweeks were not compliant with the company’s 60-hour maximum standard, and auditors had also found instances of underage workers and excessive fees paid by foreign contract workers. As a result of the audits, workers were retroactively paid for unpaid overtime and refunded excessive fees. Where underage workers were found, the supplier was required to pay for the young person’s safe return home, fund his or her continuing education, and continue to pay their wages—a stiff penalty that deterred the practice. In addition, Apple had trained more than 2 million workers on their rights under the code of conduct and local laws.

“We care deeply about every worker in Apple’s global supply chain,” said the company’s senior vice president of operations. But, he acknowledged, “gaps still exist, and there is more work to do.”

In 2015, Apple was the largest publicly traded company in the world, with a market capitalization in excess of $700 billion. The company directly employed almost 100,000 people and operated more than 450 stores in 16 countries, as well as its iTunes online music store. Fortune magazine had named Apple the most admired company in the world for eight years in a row.

Although Apple seemed to be making progress, its path to supplier responsibility had been lengthy and difficult. Since the 1990s, Apple had outsourced almost all of its manufacturing, mostly to China. The company’s biggest supplier was the Taiwanese firm Foxconn, the largest contract manufacturer of consumer electronics in the world. Foxconn’s facility in Shenzhen, China, operated like a good-sized city, with its own dormitories, cafeterias, hospital, swimming pool, and stores. In its complex of factories, 300,000 workers—many of them young women and men from rural areas—churned out electronics for Sony, Dell, IBM, and other major brands, as well as Apple.

In 2006, a British newspaper ran a story alleging mistreatment of workers at the Shenzhen facility. Apple investigated and found some violations of its supplier code of conduct, which it had introduced in 2005. In 2010, other developments focused a fresh spotlight on harsh conditions in Foxconn’s factories. In a few short months, nine workers committed suicide by throwing themselves from the upper floors of company dormitories. (Foxconn responded by putting up nets to catch jumpers, raising wages, and opening a counseling center.) In 2011, two separate explosions at factories where iPads were being made (one was Foxconn’s facility in Chengdu), apparently caused by a build-up of combustible aluminum dust, injured 77 and killed four. At Wintek, another Chinese supplier, 137 workers were sickened after using a toxic chemical called n-hexane to clean iPhone screens.

In January 2012, the public radio show This American Life broadcast a feature by monologist Mike Daisey about his interviews with workers leaving their shifts at Foxconn’s Shenzhen facility, which related in dramatic fashion their disturbing stories. Although Daisey’s piece was later criticized for not being entirely factual, it prompted some listeners to launch a petition drive on www.change.org that quickly garnered more than a quarter million signatures calling on Apple to protect workers that made their iPhones.

Page 393Just one week later, Apple announced it had joined the Fair Labor Association (FLA), the first electronics company to do so. The FLA, founded in 1999, was a nonprofit alliance of companies, universities, and human rights activists committed to ending sweatshop conditions. At Apple’s request and with the company’s financial support, the FLA immediately undertook the most extensive audit ever conducted of conditions in China’s electronics supply chain. In its report, issued in March 2012, the FLA found a number of serious violations of Apple’s supplier code of conduct, including excessive overtime, pay that was too low to meet workers’ basic needs, and many workplace accidents and injuries.

Under intense public scrutiny and pressure from Apple, Foxconn made significant changes. According to one report, after the FLA issued its findings the company’s CEO Terry Gou rushed to Shenzhen, where he told his managers emphatically, “The world is watching! We are going to fix this, right here!” The supplier worked to reduce overtime, cutting hours first to 60 a week and then to 49. It also raised wages, by as much as 50 percent in some cases, to offset fewer overtime hours. It replaced workers’ stools with chairs with sturdy backs and put automatic shut-off devices on machinery to prevent injuries. (But, it also began introducing automation and moving some production away from the industrialized coast to less affluent, interior provinces.)

Whether its reforms had helped or hurt Foxconn remained an open question. In 2015, a Chinese NGO released data allegedly showing that Apple had begun shifting work from Foxconn to Pegatron, another supplier, in order to save money. Pegatron had an 8 percent cost advantage over Foxconn, mainly because it paid its workers less. “As two suppliers essentially compete over labor costs, to only demand that one side [Foxconn] improve labor conditions is no different than making it sacrifice market share,” said the NGO.

1. What were the interests and sources of power of Foxconn, Apple’s supplier?

2. What social, ethical, and environmental risks were present in Apple’s supply chain?

3. What were the advantages and disadvantages to Apple of using its own company-specific supplier code of conduct, rather than an industrywide code?

4. What are the advantages and disadvantages to Apple of relying on its own internal audits, as contrasted with using an independent auditor like the Fair Labor Association?

5. What more, if anything, could Apple do now to reduce supply chain risk and create shared value?