In the original flashcard problem, a user can ask the program to show an entry picked randomly from a glossary. When the user presses return, the program shows the definition corresponding to that entry. The user is then given the option of seeing another entry or quitting.

A sample session might run as follows:

Enter s to show a flashcard and q to quit: s Define: word1 Press return to see the definition definition1 Enter s to show a flashcard and q to quit: s Define: word3 Press return to see the definition definition3 Enter s to show a flashcard and q to quit: q

The flashcard program is required to be extended as follows:

Box 1 – Specification of extended problem

There are now two glossaries: the ‘easy’ and the ‘hard’.

The program should allow the user to ask for either an ‘easy’ or a ‘hard’ glossary entry. If the user chooses to see an ‘easy’ entry, the program picks an entry at random from the easy glossary and shows the entry. After the user presses return, the program should show the definition for that entry.

If the user chooses to see a ‘hard’ entry, the program picks an entry at random from the hard glossary and shows the entry. After the user presses return, the program should show the definition for that entry.

The user should be able to repeatedly ask for an easy or a hard entry or choose an option to quit the program.

A sample dialogue might run as follows. Changes from the original flashcard program are indicated by underlining. word3 is from the ‘easy’ glossary, word6 from the ‘hard’ glossary.

Enter e to show an easy flashcard, h to show a hard one, and q to quit: e Define: word3 Press return to see the definition definition3 Enter e to show an easy flashcard, h to show a hard one, and q to quit: h Define: word6 Press return to see the definition definition6 Enter e to show an easy flashcard, h to show a hard one, and q to quit: q

Box 2 – Keeping a notebook

As you work through part (a) of this question you should keep a notebook. You will need this for your answer to part (a)(vi). This should be very brief: it is simply a record of your personal experience while working on the task and what you feel you have learned from it.

In your notebook we suggest that you record the following information:

There is more than one way of solving the extended problem, but the approach we ask you to follow for this TMA starts by addressing the subproblem of showing a random entry from either the easy or the hard glossary and, after the user enters return, showing the definition. The algorithm should select which glossary to use depending on the user's input.

• a.

  • i.Begin by writing an algorithm for the subproblem, show definition, described in the middle paragraph of Box 1 above, and repeated here for convenience:

    The program should allow the user to ask for either an easy or a hard glossary. If the user chooses to see an easy entry, the program picks an entry at random from the easy glossary and shows the entry. After the user presses return, the program should show the definition for that entry.

    If the user chooses to see a hard entry, the program picks an entry at random from the hard glossary and shows the entry. After the user presses return, the program should show the definition for that entry.

    At this stage, no looping is involved and the steps of the algorithm only need to do what is asked for in the paragraph above and nothing more. Your algorithm will need to cater for the two variables of the user asking for either an easy or a hard entry.

    The steps of your algorithm must be written in English and not use any Python code. The algorithm should be high-level and at a similar level of detail to the solution to Activity 2.24 of Block 3 Part 2, where an algorithm is given for show flashcard.

  • ii.Next you will translate your algorithm into Python code.

  • Modify the function show_flashcard() so it translates into Python the steps of the algorithm you wrote in Part (i). You can assume the user's choice is stored in the variable user_input and is either 'e' or 'h' for easy or hard respectively.

    Make sure you write a suitable docstring for the function.

    Copy your modified show_flashcard() function and paste it into your Solution Document.

  • iii.When you have modified the show_flash card() function, test it as follows.

    Run the program and, when asked to make a choice, immediately enter q so the program quits.

    Although the program has quit, the function is still loaded into memory and can be called from the shell. To test it, first set the value of user_input to 'e'

    >>> user_input = 'e'

    Now call the function

    >>> show_flashcard()

    If the function is correct, this should display one of the ‘easy’ words: word1, word2 or word3, followed by Press return to see the definition.

    Repeat this process but this time set the value of user_input to 'h' and check that now the word displays one of the 'hard' words: word4, word5 or word6.

    Debug the code and/or algorithm as necessary. If you need to make modifications, you should record them in your notebook.

    Copy and paste two example tests into your Solution Document. The first test should show the result of user_input being set to 'e', the function being called, and the user pressing return. The second test should show the result of user_input being set to 'h', the function being called, and the user pressing return.

    Alternatively, if you were unable to get the function working correctly, you should still paste in example tests and explain briefly how the results are different from what you were expecting.

  • iv.Now you need to make changes to the part of the program that implements the interactive loop, so the user is offered a choice between entering 'e' for an easy entry, 'h' for a hard entry, or 'q' to quit.

    If the user enters either ‘e’ or ‘h’, the show_flashcard() function should be called. The function will then show a random entry from either the easy or hard glossary, depending on which of the two the user chose, which will have resulted in user_input being set to the corresponding value.

    If the user enters ‘q’, the program should quit as before.

    If the user enters anything else, the program should print a message reminding them what the possible options are.

    Once you have made the changes, run the whole program. Copy a test dialogue into your Solution Document to show the user first choosing to see an 'easy' entry, then a 'hard' one, then entering an invalid option, and finally entering 'q' to quit the program.

    Alternatively, if you were unable to produce a test dialogue because you could not get the program to function as intended, you should briefly explain how a successful test dialogue would look.

  • v.Next, modify the docstring for the program as a whole to reflect the changes you have made.

The Problem

Facebook has long conducted digital experiments on various aspects of its website. For example, just before the 2012 election, the company conducted an experiment on the News Feeds of nearly 2 million users so that they would see more “hard news” shared by their friends. In the experiment, news articles that Facebook users' friends had posted appeared higher in their News feeds. Facebook claimed that the news stories being shared were general in nature and not political. The stories originated from a list of 100 top media outlets from the New York Times to Fox News. Industry analysts claim that the change may have boosted voter turnout by as much as 3 percent.

Next, Facebook decided to conduct a different kind of experiment that analyzed human emotions. The social network has observed that people's friends often produce more News Feed content than they can read. As a result, Facebook filters that content with algorithms to show users the most relevant and engaging content. For one week in 2012, Facebook changed the algorithms it uses to determine which status updates appeared in the News Feed of 689,000 randomly selected users (about 1 of every 2,500 Facebook users). In this experiment, the algorithm filtered content based on its emotional content. Specifically, it identified a post as “positive” or “negative” if it used at least one word previously identified by Facebook as positive or negative. In essence, Facebook altered the regular news feeds of those users, showing one set of users happy, positive posts while displaying dreary, negative posts to another set.

Previous studies had found that the largely positive content that Facebook tends to feature has made users feel bitter and resentful. The rationale for this finding is that users become jealous over the success of other people, and they feel they are not “keeping up.” Those studies, therefore, predicted that reducing the positive content in users' feeds might actually make users less unhappy. Clearly, Facebook would want to determine what types of feeds will make users spend more time on its site rather than leave the site in disgust or despair. Consequently, Facebook designed its experiment to investigate the theory that seeing friends' positive content makes users sad.

The researchers—one from Facebook and two from academia—conducted two experiments, with a total of four groups of users. In the first experiment, they reduced the positive content of News Feeds; in the second experiment, they reduced the negative content. In both experiments, these treatment conditions were compared with control groups in which News Feeds were randomly filtered without regard to positive or negative content.

The results were interesting. When users received more positive content in their News Feed, a slightly larger percentage of words in their status updates were positive, and a smaller percentage were negative. When positivity was reduced, the opposite pattern occurred. The researchers concluded that the emotions expressed by friends, through online social networks, elicited similar emotions from users. Interestingly, the results of this experiment did not support the hypothesis that seeing friends' positive content made users sad.

Significantly, Facebook had not explicitly informed the participants that they were being studied. In fact, few users were aware of this fact until the study was published in a paper titled “Experimental evidence of massive-scale emotional contagion through social networks” in the prominent scientific journal Proceedings of the National Academy of Sciences. At that point, many people became upset that Facebook had secretly performed a digital experiment on its users. The only warning that Facebook had issued was buried in the social network's one-click user agreement. Facebook's Data Use Policy states that Facebook “may use the information we receive about you . . . for internal operations, including troubleshooting, data analysis, testing, research, and service improvement.” This policy led to charges that the experiment violated laws designed to protect human research subjects.

Some lawyers urged legal action against Facebook over its experiment. While acknowledging the potential benefits of digital research, they asserted that online research such as the Facebook experiment should be held to some of the same standards required of government-sponsored clinical trials. What makes the Facebook experiment unethical, in their opinion, was that the company did not explicitly seek subjects' approval at the time of the study.

Some industry analysts challenged this contention, arguing that clinical research requirements should not be imposed on Facebook. They placed Facebook's experiment in the context of manipulative advertising—on the web and elsewhere—and news outlets that select stories and write headlines in a way that is designed to exploit emotional responses by their readers.

On July 3, 2014, the privacy group Electronic Privacy Information Center filed a formal complaint with the Federal Trade Commission claiming that Facebook had broken the law when it conducted the experiment without the participants' knowledge or consent. EPIC alleged that Facebook had deceived its users by secretly conducting a psychological experiment on their emotions.

Facebook's Response

Facebook Chief Operating Officer Sheryl Sandberg defended the experiment on the grounds that it was a part of ongoing research that companies perform to test different products. She conceded, however, that the experiment had been poorly communicated, and she formally apologized. The lead author of the Facebook experiment also stated, “I can understand why some people have concerns about it (the study), and my co-authors and I are very sorry for the way the (academic) paper described the research and any anxiety it caused.”

For its part, Facebook conceded that the experiment should have been “done differently,” and it announced a new set of guidelines for how the social network will approach future research studies. Specifically, research that relates to content that “may be considered deeply personal” will go through an enhanced review process before it can begin.

The Results

At Facebook, the experiments continue. In May 2015, the social network launched an experiment called Instant Articles in partnership with nine major international newspapers. This new feature allowed Facebook to host articles from various news publications directly on its platform, an option that the social network claims will generate a richer multimedia experience and faster page-loading times.

The following month Facebook began experimenting with its Trending sidebar, which groups news and hashtags into five categories among which users can toggle: all news, politics, science and technology, sports, and entertainment. Facebook maintained that the objective is to help users discover which topics they may be interested in. This experiment could be part of Facebook's new effort to become a one-stop news distributor, an approach that would encourage users to remain on the site for as long as possible.

A 2016 report asserts that Facebook's list of top trending topics is not quite objective. For example, one source stated that Facebook's news curators routinely excluded trending stories from conservative media sites from the trending section. Facebook strongly denied the claim.

Questions

1. Discuss the ethicality and legality of Facebook's experiment with human emotions.
2. Was Facebook's response to criticism concerning that experiment adequate? Why or why not?
3. Consider the experiments that Facebook conducted in May and June 2015. Is there a difference between these two experiments and Facebook's experiment with human emotions? Why or why not?
4. Should the law require companies to inform their users every time they conduct experiments? Why or why not?

Saint Mary’s University jointly runs a dual degree program with the Beijing Normal University at Zhuhai. In order to do so, Saint Mary’s provides faculty to instruct in China. For the spring session scheduled to run from April 22^nd to May 31^st, 2019 Saint Mary’s had an individual prepared to instruct this course. This person entered into a contract with SMU which stated in part that the individual would instruct in China during the entirety of the spring session, but said nothing about cancellation by either party. At some point on or about late February, this individual advised Saint Mary’s that they would not be able to come to Zhuhai. Assume for the purposes of this assignment that the individual had been diagnosed with cancer, and was unable to travel.

In or about early March Professor Scott had been offered and had accepted a position as the new instructor by Saint Mary’s. A contract was entered into that included, among other things, clear instructions that he would need to secure the appropriate Visa that would allow him to travel to Zhuhai. As time was tight (in legal terms we say that time was of the essence) Scott was encouraged to go ahead and book flights and make the necessary arrangements in order to be in China to start classes on April 22.

In Canada, the Chinese embassy is responsible for issuing appropriate Visas for travel to China. In order to facilitate the processing of applications, the embassy utilizes an independent company known as the Chinese Visa Processing Centre Limited…this company is a separate entity from the government and operates at arm’s length from the embassy. Applications are filled out online, and when complete, the applicant must print the application form and attend in person at the offices of the Chinese Visa Processing Centre where they pay a fee and also provide biometric scans that enable the embassy to conduct their work. The Chinese Visa Processing Centre essentially pre screens visa applications to ensure conformity with the established decision parameters. If there are readily apparent issues, for example an expired passport or things of an administrative nature, then the Chinese Visa Processing Centre will hold an application pending the correction of the issue by the applicant. The Processing Centre also states that applicants who cannot pick up their passport in person must provide a prepaid pre-addressed return envelope so that the passport containing the Visa can be returned to the applicant.

Scott prepared the online application form as advised. Given the type of Visa required, Scott needed a letter, known as the Foreign Expert Invitation Letter issued by the provincial government in Guangdong, China. Although this letter was not mentioned in the contract, Saint Mary’s represented verbally that they would secure the letter for Scott. Saint Mary’s did, in fact secure the letter, which was advanced to Scott via email on March 19. Having completed the application, and with the letter in hand, Scott flew to Ottawa to deliver the visa application.

Before that however, Scott had booked flights from Halifax to Zhuhai that would have him arrive in China on April 19 in time to begin classes on the 22^nd. Scott was instructed to secure cancellation insurance on all flights. Scott did, in fact, pay for and receive a policy of insurance that clearly stated that it would cover the cost of flights cancelled due to medical emergencies or death, including medical emergencies or death to immediate family members of the insured party.

While sitting in the departure lounge awaiting his return flight to Halifax, having attended at the Visa Processing Centre as required Scott received a telephone call from the Chinese Visa Processing Centre and was told that the embassy has already had a look at the Foreign Expert Invitation Letter. Scott was advised that the letter would not suffice because it lacked certain information, and also because it needed to be issued by the appropriate government authorities in the Guangdong Province. The letter had actually been issued by the University, in accordance with past practice This issue had not been raised for previous applications.

As a result of this problem, it became impossible to travel as planned and Scott advised his travel agent that the flights would need to be cancelled or changed. Further, Scott and officials at Saint Mary’s decided that he should not rebook any travel until it was absolutely certain that the new letter could be obtained.

On April 19, Scott received a different Foreign Expert Invitation Letter and forwarded it to the Chinese Visa Processing Centre. They acknowledged receipt on April 22 and indicated that he should receive confirmation that the Visa had been processed by April 26.

With this new knowledge, Saint Mary’s and Beijing Normal University at Zhuhai amended the start date of the course to May 6.

On April 26, Scott received word that his Visa had been processed and his passport had been placed in the provided pre-paid, pre-addressed envelope and put in the mail. The expected delivery date was April 29. Unfortunately, on April 29 it was discovered that the passport had been delivered to any entirely different address, not in Halifax Nova Scotia, but in Mississauga Ontario, 2000 kilometres away. The address label on the envelope that had been purchased from Canada Post had been tampered with before it was sold. When it was placed in the postal system by the Chinese Visa Processing Centre, it had two different addresses, and Canada Post picked one but they picked the wrong one. When contacted by Scott, Canada Post officials advised that once the envelope had been placed in the mailbox of the receiver, it became the receiver’s property, and Canada Post could not recover it because this would constitute theft. They took no responsibility for the envelope, saying it was the buyer’s problem.

Fortunately the passport was located. The individual that had the passport said that he would return it if Scott came to get it at his home. When Scott travelled to the home, the gentleman said he would only return it if Scott paid a significant reward. At first Scott declined, but the gentleman indicated that he would call the police and state that Scott was trespassing on his property. Scott felt he had no choice, and so he complied and made the payment.

When Scott returned to his hotel with the passport, the rain started to fall heavily. The stone walkway at the front of the hotel was quite slippery, and unfortunately Scott fell and injured his shoulder. Hotel staff would take no responsibility for the injury, stating Scott should have been more careful as it was raining. A sign on the wall of the hotel indicated that the paving stones could become slippery when wet, and patrons of the hotel were cautioned that the hotel accepted no responsibility for injuries. Unfortunately, the hotel concierge had left a luggage cart in front of the sign such that it was not visible.

1. IDENTIFY ALL THE POTENTIAL LEGAL ISSUES WITH REFERENCE TO THE MATERIALS COVERED IN THE COURSE. YOU MAY PREPARE YOUR ANSWER IN POINT FORM. NOTE ALSO THAT YOU ARE ASKED ONLY TO IDENTIFY THE POTENTIAL LEGAL ISSUES, SO A COMPLETE ANALYSIS IS NOT REQUIRED. (50 points)

2. ASSUME YOU ARE A LAWYER RETAINED BY SAINT MARY’S. ADVISE SAINT MARY’S OF ALL OF THEIR RIGHTS AND OBLIGATIONS IF SCOTT HAD NOT BEEN ABLE TO SECURE THE VISA. (10 points)

3. IDENTIFY, WITH REFERENCE TO RISK MANAGEMENT STRATEGIES, AREAS WHERE RISK WAS ENCOUNTERED AND HOW THE PARTIES DEALT WITH THE RISK. SPECIFY THE PARTICULAR RISK MANAGEMENT STRATEGY. (35 points)

4. WOULD IT MAKE ANY DIFFERENCE TO YOUR ANALYSIS IF SCOTT WAS PAID OR IF HE WAS A VOLUNTEER? WHY OR WHY NOT? (5 points)

This is a student essay with paragraphs that have been placed out of order. Rearrange the paragraphs into an order that seems logical to you.

A

At a young age, I knew I had to get a good grip on the English language, both on paper and verbally. My parents had it rough trying to find work and getting through school. I saw them struggle so much trying to communicate to the world. English, through my eyes, became this elite world I so badly wanted to be a part of. I was excited to finally understand the language fluently and I was proud to be able to compose summaries and essays throughout grade school. In high school though, I encountered a series of new frustrations with English grammar. Some teachers were lenient but for the most part a lot of my teachers had zero tolerance for grammatical errors. It was incredibly frustrating when I would receive a graded paper back with a less than deserving grade and annoying annotations. This was the result of me not placing appropriate apostrophes or mistakenly used their in place of there. I always wanted to ask my teachers why they couldn’t cut me some slack. If I was a competent student and you knew my intentions, why must I settle for that grade when you were able to follow along and understand me in the assignment?

B

I am a first-generation college student. My parents are refugees from Cambodia and they came to the U.S. when they were about 10 or 11 years old. Our native language is Khmer. In our language, subjunctives do not exist. It was something that was really hard to acclimate to when I started to learn English. Though I was born here, I always spoke my language at home and did not pick up English until I was around 6 years old. In my language there is only what is and what is not. Any kind of wishful thinking or possible outcomes just don’t exist. I struggled learning English but eventually got through it. I was about 9 years old when I finally was able to kick my accent. Boy was I relieved that the teasing was finally going to stop. I felt confident. I felt like I had mastered my second language. But I was wrong. I’m going to share with you my reflection on the subject of the English language, through my experiences.

C

I have learned to embrace all of my grammatical mistakes. I even started to humor my occasional broken English. It is inevitable and I take a lesson from it every time. At the end of the day, what’s important is that we are able to produce a proper paper, right? An articulate paper despite having all these different avenues we can use to communicate English. In a TED Talk titled, “3 Ways to Speak English,” Jamila Lyiscott speaks out poetically about the several ways she speaks English in her community. She talks about the challenges of speaking several completely different styles of English between her friends, her parents and in a classroom setting. A line from her speech that really resonated with me was when she said, “I know I had to borrow your language because mine was stolen, but you can’t expect me to speak ‘your’ history wholly while mine was broken.” How beautiful and powerful is that? As a first-generation student, I really want to make my family proud. Hearing Jamila’s TED Talk gave me a sense of confidence and reassurance in some way. She is letting us know that it is ok to switch things up with your vocabulary. It’s ok to dab in and out of the social norms of English to make sense of the message that you are trying to relay to people on a day to day basis. Just so long as you know the rules and you know when it’s ok to break them. That’s what will set you apart, and that is what will make you articulate.

D

I felt incredibly defeated and thought no way is this fair. Throughout school we’d often get assigned into group projects where we needed to combine all of our research and opinions into a summary. I remember correcting my classmate’s grammar and calling them out for a misspelled word. Where this comma or that apostrophe should or should not go, what needs to be capitalized. I remember coming home and boasting to my mom about these scenarios and one day she said to me, “If you were able to understand what your friends in class are trying to describe, why are you having to tell them that they are wrong?” And in that exact moment, I came to realize that I was a huge hypocrite. Why didn’t I choose to be a little more patient and try to comprehend my classmates? It was then that I realized, it doesn’t matter how we speak or if English was your second language. On paper, there are rules to live up to that everyone should follow because it really is for our own good. A couple weeks ago in class, we read an article called “Opinion Piece on Grammatical Correctness” by Ursula K. Le Guin (33). There was a piece from the reading where she says, “How we talk is important to us all, and we’re all shamed when told in public that we don’t talk correctly. Shame can paralyze our minds.”

E

Her article took me right down memory lane and I started to recall my own journey through the strange world of the English language. From when I was a child, to an adolescent, to an adult. I started to see that there are actually different ways I had to use English. So many ways we had to change things up to make sense of something in whatever social setting we were in.

For school, for work, for our family and for our friends. We even use an entirely different vocabulary for each. To be honest, I was so caught up in learning English, I forgot how to read and write in my own native language. I was no longer able to truly proclaim myself as being bilingual. I became choppy in my first language and started speaking it horribly. So, I enrolled in a Khmer class to freshen up and re learned everything. In the process of that, I came across all these wonderful students from all walks of life. Some were like me and some were learning for the first time. The interactions we had showed me the versatility of language and how we personalize it to communicate and make sense to each other. We must grow and elevate ourselves into your fullest potential. Even if you have to get through the process by speaking a little broken English. Progress is progress no matter what stage you’re in.

13.8End-of-Chapter Case: Pay To Play? Motivating Megadiamond's Suppliers The supplier-quality meeting ended at 3:10 PM and Tim Rock was bummed. The meeting ended without having accomplished one of Tim Rock's major goals. Tim Rock, senior purchasing manager at MegaDiamond, had hoped his idea to offer advantageous payment terms to certified suppliers would be approved. Unfortunately, Mega's CFO, Jack Hardplace, had rejected the plan dismissively, saying, "We just can't do that. We can't offer some suppliers special payment terms for doing what they should be doing in the first place." As Tim entered his office, he muttered, "Who does Jack think we are? Mega is no Fortune 500 player. We don't buy in big volumes. And we're definitely not Honda. We don't have an engineering team to send out to teach suppliers how to improve their own operations. Why in the world would our suppliers want to cooperate more fully in Mega's new supplier quality improvement program? Without some sort of monetary inducement, we're powerless." Mega's Quality Track Record Technological uniqueness had paved the way for Mega's entry into the market. Tim knew, however, that Mega's reputation for producing and delivering high-quality inserts was vitally important to future growth. The tight-knit oil and gas drilling industry was a lot like a small town—bad news traveled quickly. Because customers talked to one another, defective product could kill a company's reputation overnight. By contrast, positive word-of-mouth could help Mega's recognition as a preferred supplier of PDC inserts go viral. Because a reputation for poor quality meant a quick exit from the market, Tim had always viewed quality as critical. However, the quest for quality became formalized in 2004 when Superbdrill, Mega's largest customers obtained ISO 9000 certification. Superbdrill had pressured its major suppliers, including Mega, to get ISO certified. Mega complied, obtaining the ISO certification in the same year. Tim was proud of the fact that by 2009, Mega had established industry-leading standards of excellence in quality, on-time delivery, and pricing. Mega was hitting on all cylinders. The result: DrillMaster, a major Mega customer, named Mega as its "Number 1" vendor for 2011. As part of the commendation, Mega was elevated to "Level 1" vendor status, which meant DrillMaster would no longer conduct receiving inspection on incoming parts. The entire management team at Mega was thrilled to have met the standards necessary to be named a "dock-to-stock" supplier. This triumph validated Mega's quest for excellence. It also motivated Tim to extend "dock-to-stock" certification backward to Mega's suppliers. Motivating Supplier Quality Tim Rock had joined Mega in 2002—shortly before the initial ISO certification. He quickly realized that much of Mega's success rested on its reputation for producing extremely high-quality PDC inserts. The coolest designs only mattered if the quality was equally good. Tim had also recognized that purchasing had a significant opportunity to impact Mega's competitiveness through the acquisition of low-cost, high-quality materials. Mega purchased from approximately 400 suppliers, which were classified into three levels. Level 1 suppliers provided materials that were used directly as components of PDC inserts. Each PDC insert consisted of two principal components: A tungsten carbide base A polycrystalline diamond cutting surface Because of the composition of the inserts, Tim referred to these two parts as "bread and butter products." In effect, the tungsten base was the bread and the PDC the butter. Given the simple nature of a PDC insert, only 12 suppliers classified as Level 1 suppliers. However, these 12 suppliers represented over 50% of all purchase dollars. Level 2 suppliers provided inputs used in the production process. Mega actively sourced from 100 Level 2 suppliers, spending about 30% of the purchasing budget with these suppliers. Level 3 suppliers provided routine inputs that supported both operations and administration. The remaining 300 suppliers were all Level 3 suppliers. Tim dedicated most of his time and effort to improving relationships with Level 1 suppliers. In fact, to support Mega's quality emphasis, Tim completed the training needed to certify as an ISO auditor in 2009. Tim used this training to help suppliers improve their quality processes. For example, in a visit to Tungsten Specialist Incorporated (TSI), Mega's leading supplier of tungsten carbide substrates, Tim noted that TSI was not matching the specification sheet they received from Mega with the final materials certification. This finding helped explain why Mega occasionally received lots that did not meet required specs. More importantly, it raised serious questions about the quality practices at TSI. Because the quality of the tungsten carbide substrate was critical to the performance of the finished PDC insert, Tim had initiated a study of tungsten carbide suppliers. Mega had been purchasing tungsten carbide substrates from three suppliers; however, 99% of its tungsten carbide substrates were sourced from TSI. After surveying both existing suppliers as well as other buyers of substrates, Tim decided that TSI was the best source of substrates and that it would be more appropriate to "tighten up" the relationship rather than start over with a new supplier. The decision to "tighten" the relationship with TSI provided an excellent opportunity to begin to extend supplier certification backward to Mega's Level 1 suppliers. He was worried, however, that simply recognizing suppliers as certified would not motivate them to want to become a "Mega Certified Supplier." After all, despite Mega's world-class performance, a plaque from MegaDiamond hanging in a supplier's lobby wouldn't be viewed as a "world-class" endorsement. And, although Mega was growing fast, it couldn't buy in the kind of blowout volumes that would excite suppliers. To motivate the exceptional quality performance he desired to see from Mega's suppliers, Tim felt he needed to put some kind of "bottom-line" incentive on the table. Tim had identified three primary challenges to providing such a "bottom-line" motivation. Mega's small size had historically prevented it from being a dominant customer for most of its suppliers. In the case of TSI, Mega already purchased 99% of its substrates from TSI. Mega couldn't promise increased volumes as a reward for certification. Senior management needed to approve any—and all—ideas like offering special payment terms to certified suppliers. As Tim sat at his desk, he wondered aloud, "What can we offer to Level 1 suppliers to get their attention and motivate them to improve their quality practices?" Questions What do you think of Tim's plan? What are the pros and cons of a pay-for-performance certification program? If you think Tim should proceed, what can he do to get the CFO and other top management to support a financial reward for certified suppliers? If you don't like the pay-for-performance concept, how do you suggest Tim proceed to get suppliers to buy in to certification?

As part of the quarterly reviews, the manager of a retail store analyzes the quality of customer service based on the periodic customer satisfaction ratings (on a scale of 1 to 10 with 1 = Poor and 10 = Excellent). To understand the level of service quality, which includes the waiting times of the customers in the checkout section, he collected data on 100 customers who visited the store; see the attached Excel file: ServiceQuality.

Using XLMiner Platform > Cluster, apply K-Means Clustering with the following Selected Variables: Wait Time (min), Purchase Amount ($), Customer Age, and Customer Satisfaction Rating as Selected Variables. In Step 2 of the XLMiner k-Means Clustering procedure, normalize input data, assume k = 5 clusters, 50 iterations, and fixed start with the default Centroid Initialization seed of 12345. (Note: If the allowable number of iterations is less than 50, it means that you do not use the educational version of XLMiner available to BUAD 2070 students; see the syllabus.)

1. A) What is the minimum normalized (standardized) Euclidean distance between created cluster centers (centroids)?

B) What is the maximum average normalized Euclidean distance between the cluster observations and the cluster centroid?

C) Based on your answers to Questions 1a and 1b, are the five created clusters justifiable? (Note. Recall that the distances between clusters should be greater than the distances within clusters.)

D) Using original data (coordinates), what are the maximum and the minimum average customer satisfaction ratings for the five created clusters?

E) Using original data (coordinates), what are the maximum and the minimum average wait times (in minutes) for the five created clusters?

F) Using original data (coordinates), what are the maximum and the minimum average purchase amounts ($) for the five created clusters?

G) Based on your answers to Questions 1d, 1e, and 1f, what reasons do you see for low customer satisfaction ratings?

2. Using XLMiner Platform > Cluster, apply Hierarchical Clustering with the following Selected Variables: Wait Time (min), Purchase Amount ($), Customer Age, and Customer Satisfaction Rating. In Steps 2 and 3 of the XLMiner Hierarchical Clustering procedure, normalize input data and apply Ward’s clustering method with k = 5 clusters.

A) What is thee obtained dendrogram?

B) For each of the five created clusters, find the number of observations and the averages for the four variables. Hint: Using the worksheet HC_Clusters, you may first sort the column Cluster ID, and next calculate these numbers (using e.g. Excel function COUNTIF) and these averages (using Excel function AVERAGE).

C) Based on your findings for Task 2b, what reasons do you see for low customer satisfaction ratings?

D) Provide some recommendations for improving customer satisfaction.

Write a managerial report in MS Word that presents your findings. Do not attach any separate XLMiner and/or Excel outputs. Instead paste into your report the XLMiner outputs with answers to Questions 1a, 1b, 1d, 1e, and 2a, and Excel results related to Task 2b. Showing these outputs/results is crucial because without them I will not be able to verify your findings.

Please add the work on how to do it on excel. Detailed explanation please. Thank you!

The unadjusted trial balance of Epicenter Laundry at June 30, 2016, the end of the fiscal year, follows:

Epicenter Laundry

UNADJUSTED TRIAL BALANCE

June 30, 2016

The data needed to determine year-end adjustments are as follows:

Required:

Chart of Accounts

Labels and Amount Descriptions

T Accounts

Work Sheet

(Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on an end-of-period work sheet and complete the work sheet.

Journal

PAGE 10PAGE 11

GENERAL JOURNAL

Adjusted Trial Balance

4. Prepare an adjusted trial balance.

Epicenter Laundry

ADJUSTED TRIAL BALANCE

June 30, 2016

Income Statement

5. Prepare an income statement for the year ended June 30, 2016. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement.

Statement of Owner’s Equity

5. Prepare a statement of owner’s equity for the year ended June 30, 2016. No additional investments were made during the year. If a net loss has been incurred or there has been a decrease in owner’s equity, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items.

Balance Sheet

5. Prepare a balance sheet as of June 30, 2016. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary.

Post-closing Trial Balance

7. Prepare a post-closing trial balance.

Epicenter Laundry

POST-CLOSING TRIAL BALANCE

June 30, 2016

The unadjusted trial balance of La Mesa Laundry at August 31, 2016, the end of the fiscal year, follows:

La Mesa Laundry

UNADJUSTED TRIAL BALANCE

August 31, 2016

The data needed to determine year-end adjustments are as follows:

Required:

Chart of Accounts

Labels and Amount Descriptions

T Accounts

Work Sheet

2. (Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on an end-of-period work sheet and complete the work sheet.

Journal

PAGE 10PAGE 11

JOURNAL

Adjusted Trial Balance

4. Prepare an adjusted trial balance.

La Mesa Laundry

ADJUSTED TRIAL BALANCE

August 31, 2016

Income Statement

5. Prepare an income statement for the year ended August 31, 2016. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement.

Statement of Owner’s Equity

5. Prepare a statement of owner’s equity for the year ended August 31, 2016. Be sure to complete the statement heading. No additional investments were made during the year. If a net loss has been incurred or there has been a decrease in owner’s equity, enter that amount as a negative number using a minus sign. Use the list of Labels and Amount Descriptions for the correct wording of text items.

Balance Sheet

5. Prepare a balance sheet as of August 31, 2016. Be sure to complete the statement heading. Fixed assets must be entered in order according to account number. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary.

Post-closing Trial Balance

7. Prepare a post-closing trial balance.

La Mesa Laundry

POST-CLOSING TRIAL BALANCE

August 31, 2016

Your employer, a mid-sized human resources management company, is considering expan- sion into related fields, including the acquisition of Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporary heavy workloads. Your employer is also considering the purchase of Bigger- staff & McDonald (B&M), a privately held company owned by two friends, each with 5 million shares of stock. B&M currently has free cash flow of $24 million, which is expected to grow at a constant rate of 5%. B&M’s financial statements report short-term investments of $100 million, debt of $200 million, and preferred stock of $50 million. B&M’s weighted average cost of capital (WACC) is 11%. Answer the following questions.

a. Describe briefly the legal rights and privileges of common stockholders.

b. What is free cash flow (FCF)? What is the weighted average cost of capital? What is the free cash flow valuation model?

c. Use a pie chart to illustrate the sources that comprise a hypothetical company’s total value. Using another pie chart, show the claims on a company’s value. How is equity a residual claim?

d. Suppose the free cash flow at Time 1 is expected to grow at a constant rate of gL forever. If gL WACC, what is a formula for the present value of expected free cash flows when discounted at the WACC? If the most recent free cash flow is expected to grow at a constant rate of gL forever (and gL WACC), what is a formula for the present value of expected free cash flows when discounted at the WACC?

e. Use B&M’s data and the free cash flow valuation model to answer the following questions. (1) What is its estimated value of operations? (2) What is its estimated total corporate value? (This is the entity value.) (3) What is its estimated intrinsic value of equity? (4) What is its estimated intrinsic stock price per share?

f. You have just learned that B&M has undertaken a major expansion that will change its expected free cash flows to ?$10 million in 1 year, $20 million in 2 years, and $35 million in 3 years. After 3 years, free cash flow will grow at a rate of 5%. No new debt or preferred stock was added; the investment was financed by equity from the owners. Assume the WACC is unchanged at 11% and that there are still 10 million shares of stock outstanding.

(1) What is the company’s horizon value (i.e., its value of operations at Year 3)? What is its current value of operations (i.e., at Time 0)?

(2) What is its estimated intrinsic value of equity on a price-per-share basis?

g. If B&M undertakes the expansion, what percent of B&M’s value of operations at Year 0 is due to cash flows from Years 4 and beyond? (Hint: Use the horizon value at t 3 to help answer this question.

h. Based on your answer to the previous question, what are two reasons why managers often emphasize short-term earnings?

i. YouremployeralsoisconsideringtheacquisitionofHatfieldMedicalSupplies.Youhave gathered the following data regarding Hatfield, with all dollars reported in millions: (1) most recent sales of $2,000; (2) most recent total net operating capital, OpCap $1,120; (3)mostrecentoperatingprofitabilityratio,OP NOPAT Sales 45%;and(4)most recent capital requirement ratio, CR OpCap Sales 56%. You estimate that the growth rate in sales from Year 0 to Year 1 will be 10%, from Year 1 to Year 2 will be 8%, from Year 2 to Year 3 will be 5%, and from Year 3 to Year 4 will be 5%. You also estimate that the long-term growth rate beyond Year 4 will be 5%. Assume the operating profitability and capital requirement ratios will not change. Use this information to forecast Hatfield’s sales, net operating profit after taxes (NOPAT), OpCap, free cash flow, and return on invested capital (ROIC) for Years 1 through 4. Also estimate the annual growth in free cash flow for Years 2 through 4. The weighted average cost of capital (WACC) is 9%. How does the ROIC in Year 4 compare with the WACC?

j.What is the horizon value at Year 4? What is the total net operating capital at Year 0? How does the value of operations compare with the current total net operating capital?

k. What are value drivers? What happens to the ROIC and current value of operations if expected growth increases by 1 percentage point relative to the original growth rates (including the long-term growth rate)? What can explain this? (Hint: Use Scenario Manager.)

l. Assume growth rates are at their original levels. What happens to the ROIC and current value of operations if the operating profitability ratio increases to 5.5%? Now assume growth rates and operating profitability ratios are at their original levels. What happens to the ROIC and current value of operations if the capital requirement ratio decreases to 51%? Assume growth rates are at their original levels. What is the impact of simultaneous improvements in operating profitability and capital requirements? What is the impact of simultaneous improvements in the growth rates, operating profitability, and capital requirements? (Hint: Use Scenario Manager.)

m. What insight does the free cash flow valuation model provide regarding possible reasons for market volatility? (Hint: Look at the value of operations for the combinations of ROIC and gL in the previous questions.)

n. (1) Write out a formula that can be used to value any dividend-paying stock, regardless of its dividend pattern.

(2) What is a constant growth stock? How are constant growth stocks valued?

(3) What happens if a company has a constant gL that exceeds its rs? Will many stocks have expected growth greater than the required rate of return in the short run (i.e., for the next few years)? In the long run (i.e., forever)?

o. Assume that Temp Force has a beta coefficient of 1.2, that the risk-free rate (the yield on T-bonds) is 7.0%, and that the market risk premium is 5%. What is the required rate of return on the firm’s stock?

p.Assume that Temp Force is a constant growth company whose last dividend (D0, which was paid yesterday) was $2.00 and whose dividend is expected to grow indefinitely at a 6% rate. (1) What is the firm’s current estimated intrinsic stock price?

(2) What is the stock’s expected value 1 year from now?

(3) What are the expected dividend yield, the expected capital gains yield, and the expected total return during the first year?

q. Now assume that the stock is currently selling at $30.29. What is its expected rate of return?

r. Now assume that Temp Force’s dividend is expected to experience nonconstant growth of 30% from Year 0 to Year 1, 25% from Year 1 to Year 2, and 15% from Year 2 to Year 3. After Year 3, dividends will grow at a constant rate of 6%. What is the stock’s intrinsic value under these conditions? What are the expected dividend yield and capital gains yield during the first year? What are the expected dividend yield and capital gains yield during the fourth year (from Year 3 to Year 4)?

s. What is the market multiple method of valuation? What are its strengths and weaknesses?

t. What are the advantages of the free cash flow valuation model relative to the dividend growth model?

u. What is preferred stock? Suppose a share of preferred stock pays a dividend of $2.10 and investors require a return of 7%. What is the estimated value of the preferred stock?