Kindly summarize this Literature Review Section 3.2 Efficient Techniques and Performance Measurement Recently, developed techniques compare the efficiency of similar service organizations by explicitly considering their use of multiple inputs to produce multiple outputs. These new efficiency techniques are often divided into two categories. One broad category consists of the linear programming procedures used in this paper (DEA). The second category is a set of regression-based techniques that derive inefficiency estimates from two-part error terms, and has been called the econometric or stochastic frontier approach. Both techniques use sample firms to construct an efficient production frontier. The frontier is efficient in the sense that a firm operating on the frontier could not increase output without increasing its input utilization, or it could not reduce its input utilization without decreasing output. Deviations from the frontier represent inefficiencies, and are termed X-inefficiencies in the finance and economics literature. Efficient frontier techniques avoid the need to develop a standard cost for each service provided and are more comprehensive and reliable that using a set of operating ratios and profit measures. These techniques permit managers and researchers to service organizations and identify units that are relatively inefficient, determine the magnitude of the inefficiency, suggest alternative strategies to reduce the inefficiencies, all in a composite measure. Moreover, these techniques provide an estimate of the overall efficiency level of the market that is under consideration. We know of only two studies that use efficient frontier techniques in the hotel industry. The first is that of Morey and Ditman (1995) who measure the relative performance of hotel general managers using DEA. The authors gathered input-output data for 54 hotels from a geographically dispersed area. They found that managers were operating 89 percent efficiency. In other words, given their output, managers on average could reduce their inputs by 11 percent. The study reported that the least efficient hotel was 64 percent efficient. These results are relatively high compared to those found in other industry studies that utilize DEA. Large efficiency scores are indicators of High performance and competition (Leibenstein 1966). Thus in an economic context, the market for lodging services appears to be operating efficiently. Anderson et al. (1998) argue for the benefits of using a stochastic frontier methodology in addition to DEA in order to accurately assess performance. Using a classical stochastic frontier model, they also find the hotel industry to be performing relatively efficiently, with efficiency measures above 90 percent. While both of these studies are informative, neither provides any information on the source of the inefficiencies. The source of the inefficiencies, whether technical or allocative in nature, is important information that managers need in order to take proactive positions to increase performance. We re-examine hotel efficiency using a method of DEA that provides significantly more detailed results and we further analyze the inefficiency sources. The following section describes our procedure.

SECTION 4 EFFICIENCY DETERMINATION

Section 4.1 The DEA Technique

Within the DEA framework, performance of an individual firm is evaluated with respect to an efficient frontier, which is constructed by taking linear combinations of existing firms. While there are several DEA approaches, wee use an unput-base approach, assuming that inputs are contracted proportionally with exogenous outputs. The procedure relies on sophisticated mathematics; however, the following simplified graphical example deomstates how th eefficiency measures are computed.

Figure 1 displays tha overall (OE) and (TE), and allocativ (AE) efficiency measures. In this example, we assume two inputs (X1 and X2), one output (Y), and constant returns to scale. Additionally, we assume that technology is fixed and that input prices are represented as PP. Firm A is X-efficient since it produces along output isoquant Y by utilizing the least inputs. Suppose thee is a firm operating at point C and producing an output equivalent of that produced along Y. C is uses more inputs than A to produce the output Y and is classified as inefficient with an overall efficiency score of 0D/0C )or equivalenly and inefficiency score of DC/0C).

Overall inefficiency can be decomposed into its techhnical and allocattive components. Without being able to alter input allocations, the bestt that firmC could have done was to operate at point B. The "extra" input usage that was incurred by firm C as a percentage of total input usage is the technical inefficiency measure and can be dpressed as BC/0C The technical efficiency of firm C is ecpresses as 0B/0C. Allocative inefficiency representts managerial failurd to use the optimal input mix. Here, allocative inefficiencies for firm C can be represented by DB/0B, and allocatvie effficiency is expressed as 0D/0B.

Technical efficiency can be further decomposed into technical (PTE) and scale (SE) efficiency measures. Pure technical inefficiency simply refers to deviations from the efficient frontier that result rom failure to utilize the employed resoures efficiently. Hence, this measure assumes that firms are operating at constant return to scale. Scale ineficiencies, on the other hand are losses due tofailure to operate at constant returns to scale. Figure 2 illustrates these two efficiency measures. In this figure, the Y-axis represents output and the X-axis represents input conbinations that contain an equal amount of both input 1 an dinput 2. The graph shows three observations denoted A, B, and C, respectively. Two frontiers are illustrated, a fronier assuming constant returns to scale instead of decreasing or increasing returns toscale.

After completing this analysis, we examine the SE measure to determine if it equals one. If the SE measure equals one, firms are operating at constant returns to scale. If SE does not equal one, we then determine whether the firms are oeprating at increasing or decreasing returns to scale (see Appendix A for a mathematical treatment of DEA).

SYN 960 Business Government & Society

Albright College

Application Test #1

Read the following case below and then answer the questions following the case.

Case: A Brawl in Mickey’s Backyard

Outside City Hall in Anaheim, California—home to the theme park Disneyland—dozens

of protestors gathered in August 2007 to stage a skit. Wearing costumes to emphasize their

point, activists playing “Mickey Mouse” and the “evil queen” ordered a group of “Disney

workers” to “get out of town.” The amateur actors were there to tell the city council in a

dramatic fashion that they supported a developer’s plan to build affordable housing near

the world-famous theme park—a plan that Disney opposed.

“They want to make money, but they don’t care about the employees,” said Gabriel de

la Cruz, a banquet server at Disneyland. De la Cruz lived in a crowded one-bedroom apartment

near the park with his wife and two teenage children. “Rent is too high,” he said. “We

don’t have a choice to go some other place.”

The Walt Disney Company was one of the best-known media and entertainment companies

in the world. In Anaheim, the company operated the original Disneyland theme park,

the newer California Adventure, three hotels, and the Downtown Disney shopping district.

The California resort complex attracted 24 million visitors a year. The company as a whole

earned more than $35 billion in 2007, about $11 billion of which came from its parks and

resorts around the world, including those in California.

Walt Disney, the company’s founder, had famously spelled out the resort’s vision when

he said, “I don’t want the public to see the world they live in while they’re in Disneyland.

I want them to feel they’re in another world.”

Anaheim, located in Orange County, was a sprawling metropolis of 350,000 that had

grown rapidly with its tourism industry. In the early 1990s, the city had designated two square

miles adjacent to Disneyland as a special resort district, with all new development restricted

to serving tourist needs, and pumped millions of dollars into upgrading the area. In 2007, the

resort district—5 percent of Anaheim’s area—produced more than half its tax revenue.

Housing in Anaheim was expensive, and many of Disney’s 20,000 workers could not

afford to live there. The median home price in the community was more than $600,000,

and a one-bedroom apartment could rent for as much as $1,400 a month. Custodians at the

park earned around $23,000 a year; restaurant attendants around $14,000. Only 18 percent

of resort employees lived in Anaheim. Many of the rest commuted long distances by car

and bus to get to work.

The dispute playing out in front of City Hall had begun in 2005, when a local developer

called SunCal had arranged to buy a 26-acre site in the resort district. (The parcel was directly

across the street from land Disney considered a possible site for future expansion.)

SunCal’s plan was to build around 1,500 condominiums, with 15 percent of the units set

aside for below-market-rate rental apartments. Because the site was in the resort district,

the developer required special permission from the city council to proceed.

Affordable housing advocates quickly backed SunCal’s proposal. Some of the unions

representing Disney employees also supported the idea, as did other individuals and groups

drawn by the prospect of reducing long commutes, a contributor to the region’s air pollution.

Backers formed the Coalition to Defend and Protect Anaheim, declaring that “these

new homes would enable many . . . families to live near their places of work and thereby

reduce commuter congestion on our freeways.”

Disney, however, strenuously opposed SunCal’s plan, arguing that the land should be

used only for tourism-related development such as hotels and restaurants. “If one developer

is allowed to build residential in the resort area, others will follow,” a company

spokesperson said. “Anaheim and Orange County have to address the affordable housing

issue, but Anaheim also has to protect the resort area. It’s not an either/or.” In support of

Disney’s position, the chamber of commerce, various businesses in the resort district, and

some local government officials formed Save Our Anaheim Resort District to “protect our

Anaheim Resort District from non-tourism projects.” The group considered launching an

initiative to put the matter before the voters.

The five-person city council was split on the issue. One council member said that if

workers could not afford to live in Anaheim, “maybe they can move somewhere else . . .

where rents are cheaper.” But another disagreed, charging that Disney had shown “complete

disregard for the workers who make the resorts so successful.”

Sources: “Disneyland Balks at New Neighbors,” USA Today, April 3, 2007; “Housing Plan Turns Disney Grumpy,” The New

York Times, May 20, 2007; “In Anaheim, the Mouse Finally Roars,” Washington Post, August 6, 2007; and “Not in Mickey’s

Backyard,” Portfolio, December 2007.

1. Using Disney as the focal organization, identify all the relevant stakeholders to this case.

2. For each of the stakeholders above, clear explain their respective “interest” or claim to the situation using evidence from the case. Also, indicate if each stakeholder is in

favor of, or opposed to, SunCal’s proposed development.

3. What sources of power do each of the relevant stakeholders identified above have in this case?

4. Based on the information you have included in your stakeholder analysis/map, what do you believe is the socially responsible decision for Disney? Justify your solution by applying either the ownership theory of the firm or the stakeholder theory of the firm.

Questions:

5) What are the advantages and disadvantages to countries that promote frontier tourism?

6) Discuss how nations can create a competitive advantage in attracting tourists.

Roughing It: Tourists Are Boldly Going Into African Trouble Spots

A conservationist in oil-rich Gabon leads the way in promoting tiny nation’s sur ing hippopotamuses and other natural attractions, as part of a regional push for tourism amid instability

By Alexandra Wexler

Oct. 19, 2018 5 30 a.m. ET

WONGA WONGUE, Gabon—For the past decade, an energetic conservationist has been building the foundations for a tourism industry in Gabon, where rare forest elephants stroll down the beach, hippopotamuses surf in the ocean waves and blue-faced mandrills march by the thousands through the jungle.

The challenges for Gabon’s national parks authority and its head, Lee White, include transporting clients to remote camps in a country with little infrastructure, recruiting pygmy trackers from deep within the jungle and training antipoaching units who have to battle armed hunters and illegal gold miners in one of the world’s most pristine stretches of wilderness.

Over the past decade, with the support of government and overseas philanthropists, Mr. White has transformed Gabon’s parks authority from a group with just 100 staff with a budget of $500,000 to a $30 million operation with 800 employees, 175 cars, 35 boats and a number of aircraft, including a helicopter. Tourists have begun to arrive, with visitors up by a third this year through July compared with the average over the same period in 2017 at the country’s most-popular national park for international tourists.

Mr. White’s Gabonese gambit is at the leading edge of a trend attracting a growing list of African economies: frontier-tourism products in places that visitors often more-closely associate with conflict or instability.

In recent years, a small but swelling segment of the tourism market has been drawn to places like Chad, the Democratic Republic of Congo’s Virunga National Park, which was recently closed after two British tourists were kidnapped and their ranger killed, and war-torn Central African Republic. Tour operator Thomas Cook Group PLC recently sent a delegation to Sierra Leone, which has struggled with civil war and more recently an Ebola epidemic, to discuss offering package tours.

“There is a trend recently of interest in ‘unexplored’ places,” said André Rodrigues Aquino, a senior natural-resources management specialist at the World Bank, who advises African

governments on their tourism sector. “It’s very linked to nature, places that have pristine unspoiled nature.”

The numbers are small compared with sub-Saharan Africa’s broader tourism market of $43.7 billion in 2017, according to the World Travel & Tourism Council. But countries with the strongest growth in international arrivals in 2016 compared with a year earlier were Sierra Leone, Nigeria, Eritrea and Togo, according to the African Development Bank.

“A lot of people who have traveled previously, particularly in Africa, are looking for different experiences in different places,” said Peter Fearnhead, chief executive of African Parks, a nongovernmental organization that manages 15 national parks in partnership with governments across Africa. “The fact that [these places are] so edgy, we’re finding that there’s an increasing interest.”

The niche but expanding market for frontier tourism in fractious security environments has governments and companies seeking to balance revenue potential against the investments and know-how needed to ensure safety.

Oil-rich Gabon, a sparsely-populated country the size of Colorado on Africa’s Atlantic seaboard, has one of the highest per-capita incomes in sub-Saharan Africa and is one of the more stable countries in the continent’s central region. But when Mr. White took the reins of the country’s newly created national-parks agency in 2009, the vast nature reserves that cover about 20% of the country existed essentially only on paper.

= “The first priority when I was appointed was to manage the parks and when necessary, defend them,” Mr. White said. He created antipoaching units and armed rapid-response teams to push, with much success, ivory poachers out of the parks.

There are exceptions. Parks officers have had two gunbattles with illegal gold miners in a park called Birougou in the past six months, Mr. White said.

At Zakouma, a national park in the desert nation of Chad, poachers had massacred about 90% of the park’s elephants by the time African Parks took over its management in 2010. Since then, the group has transformed the region into a haven for one of Africa’s largest single herds, now about 560 elephants strong. By establishing flights to link the park with Chad’s capital city— and joining with a group of private guides as part of the marketing strategy—the park’s revenue is expected to be just under a $1 million this year, up from about $50,000 in 2015.

The mobile-tented safari experience that African Parks offers is booked about 18 months in advance, but it takes a maximum of just eight guests at a time and is limited to the dry season.

“It’s not a sustainable solution for the park,” said Stuart Slabbert, head of conservation-led economic development for African Parks.

Experts say national parks across the continent will struggle to expand their tourism revenue without a cooperative and supportive government.

In Gabon, Mr. White’s plans have been aided by his close relationship with current President Ali Bongo Ondimba, established while his father, Omar Bongo Ondimba, was still in power. Though Gabon is

theoretically a democracy, the elder Mr. Bongo ruled for 42 years and the current president, who took over when he died in 2009, won close, tense elections in 2016 marred by accusations of fraud that ignited countrywide rioting.

This year, Mr. White began actively marketing safari-type trips to the parks for the first time. Possible sightings include sea turtles hatching on the country’s beaches, humpback whales breaching in the surf and Western lowland gorillas lazing while their babies climb and swing around trees: a literal jungle gym.

“It’s not savanna tourism. You have to work to see this stuff,“ said Michael Nichols, a photographer who took a picture of Gabon’s surfing hippos that Time magazine calls one of the 100 most influential images of all time. “That doesn’t preclude that it’s frigging unbelievable. It could be like the Amazon.”

Saxum Vineyard, in Paso Robles, CA, is one of the more than 8,000 wineries in the United States. While Saxum produces a number of different kinds of wine, they focus their production on Syrah (also known as Shiraz). Saxum sells their wines all over the United States. Suppose you manage a vineyard like Saxum and want to determine how much you should charge for your Syrah. Suppose the market demand function for Syrah is as follows.

QD = 200 - 38.18PO + 8.35PS - 2Pc + 10Inc + .8TS + .5M21

Where QD is monthly demand for bottle of Syrah (in millions), PO is the price of Syrah in the market, PS is the average price of substitute bottles of wine (other varieties), Pc is the average price of a pound of cheese and is used to gauge the price of complimentary goods, Inc is average US per capita income (in thousands), TS is the number of wine trade shows and competitions each year which firms can attend to market their wines, and M21 is the number (in millions) of millennials in the US over the age of 21. This last variable is included to capture a change in consumer preferences; millennials are drinking wine at a much higher rate than previous generations.

The market for Syrah also has supply, produced by wineries similar to Saxum Vineyard and your winery, which can be stated as follows.

QS = -100 + 22.93PO - 5PPI - 10PS + 8Temp + 1Sup

Where QS is monthly supply of bottles of Syrah (in millions), PO is the price of Syrah in the market, PPI is the Producer Price Index (an index used to gauge changes in the costs of production in the US), PS is the price of substitute wines which could easily be produced instead of Syrah, Temp is the expected temperature during the harvest season for grapes, and Sup is the number of wineries that supply Syrah in the market (in thousands).

Using the market supply and demand functions for Syrah given, fill in the template provided with the coefficients for each function.

Using the information below, fill in the values for each of the variables except Price of Syrah.

Demand:

-Price of Substitutes: $18

-Price of Cheese: $15

-Income: $53,000

-Trade Shows/Competitions: 3

-Millennials = 45 million

Supply

-PPI: 111

-Price of Substitutes: $18

-Temperature: 60

-Number of Suppliers: 8,000

a)   When the price of Syrah increases by $1, do supply and demand increase or decrease?                                  
b)   By how much? What is the effect on quantity demanded and quantity supplied?                                   
                       a)       b)      
                   Quantity demanded ____ by _______ million bottles.  
                   Quantity supplied ________ by _________ million bottles.  
c)   Does a $1 decrease in the price of substitute bottles of wine shift the demand and supply curves to the left or right?
                                  
d)   By how much?

                                  
                       c)       d)      
                   Demand curve is shifted to the _______ by ________ million bottles.  
                   Supply curve is shifted to the ________ by __________ million bottles.  
e)   Suppose the price of Syrah is currently $22 per bottle. How many bottles will be demanded and supplied monthly?

                                  
                   Price of Syrah =   $22.00              
                   Bottles demanded = _______ million          
                   Bottles supplied = _________ million          
f)   Is there a shortage or a surplus?

  
g)   How much is the shortage or surplus?

                                  
                       f)       g)      
                   There is a _______ equal to _______ million bottles.  
h)   If the market price of Syrah falls to $16 per bottle, how many bottles will be demanded and supplied monthly?

                                  
                   Price of Syrah =   $16.00              
                   Bottles demanded = __________ million          
                   Bottles supplied = ________ million          
i)   Is there a shortage or a surplus?

                                  
j)   How much is the shortage or surplus?                                  
                       i)       j)      
                   There is a ________ equal to _______ million bottles.  

                                  

Is Your Car “Made in the U.S.A.”? The phrase “made in the U.S.A.” has become a familiar battle cry as U.S. workers try to protect their jobs from overseas competition. For the past few decades, a ma- jor trade imbalance in the United States has been caused by a flood of imported goods that enter the country and are sold at lower cost than comparable American-made goods. One prime concern is the automotive industry, in which the number of imported cars steadily increased during the 1970s and 1980s. The U.S. automobile industry has been besieged with complaints about product quality, worker layoffs, and high prices, and has spent billions in advertising and research to produce an American-made car that will satisfy consumer demands. Have they been successful in stopping the flood of imported cars purchased by American consumers? The data in the table represent the numbers of imported cars y sold in the United States (in millions) for the years 1969–2009. To simplify the analysis, we have coded the year using the coded variable x = Year - 1969.

1. Using a scatterplot, plot the data for the years 1969–1988. Does there appear to be a linear relationship between the number of imported cars and the year?

2. Use a computer software package to find the least-squares line for predicting the number of imported cars as a function of year for the years 1969–1988.

3. Is there a significant linear relationship between the number of imported cars and the year?

4. Use the computer program to predict the number of cars that will be imported us- ing 95% prediction intervals for each of the years 2007, 2008, and 2009.

5. Now look at the actual data points for the years 2007–2009. Do the predictions obtained in step 4 provide accurate estimates of the actual values observed in these years? Explain.

6. Add the data for 1989–2009 to your database, and recalculate the regression line. What effect have the new data points had on the slope? What is the effect on SSE?

7. Given the form of the scatterplot for the years 1969–2009, does it appear that a straight line provides an accurate model for the data? What other type of model might be more appropriate? (Use residual plots to help answer this question.)

1)Find the permutation and combination of the letters a, b, c, d taking 2 at a time.

Verify your answers with the permutation & combination formula.2)

2.An urn contains 10 marbles. 3 blues, 4 yellow and 3 red marbles. 6 marbles is selected at random. Find the probability of picking 1 blue, 3 yellow marbles and 2 red ones.

3) A computer operator has to issue passwords made up of a letter followed by two digits. How many passwords are possible? Give two random passwords

4) In how many ways can you mark a 5-question test True / False? Give a random selection

5) A recent U.S survey shows that, the probability of living in California is 12%, the probability

of being Hispanic is 11% and the probability of being Hispanic and living in California is 4%.

Let H represents the events of “Being Hispanic” and L for living in CA. Evaluate i) P(H/L), ii)P(H U L)

6) A single card is picked at random. Find the probability of picking a red card or a 10.

7) a)Define mutually vs not mutually exclusive events give an example of two events that are mutually exclusive and two that are not.

b)Define independent events and give an example of an independent event and a dependent one.

c)Define independent events and give an example of an independent event and a dependent one.

8) a)A coin is tossed three times, use a tree diagram to construct all the possible outcomes.

8b)The odds-maker give the Yankees a 10 to 1 shot of winning the 2020 World Series.

What is the probability that the Yankees will win the 2020 World Series?

9)In Spring valley, NY about 56% of days in a year are cloudy. Find the mean,
variance and standard deviation for the number of cloudy days during the month of June

10) The probability that Yankees will 2020 world series is 20%.

Find the odds in favor that they will in fact win the 2020 world series? .20 to 1-.20 which reduces to 1 to 4 odds.

11. A sample task was given to 150 elementary school children.

The following table includes the times in minute it takes to complete the task.

a) Construct a probability distribution for the random variable x

b) Graph the distribution using a histogram (Times in minutes VS probability)

c) Verify that the probability is in fact a probability distribution.

d) Find the mean, the variance and the standard deviation

12) The table shows the number of male and female students enrolled in nursing at University of Oklahoma Health Sciences center for a recent semester.

A student is selected at random. Find the probability of each event.

Nursing Majors     Non Nursing Majors     Total

Males                 94                    1104                             1198

Females             725                    1682                           2407

Total                  819                    2786                            3605

Calculate the probability of a) choosing a male or a nursing major is

b)      The student is a female or not a nursing major. c)The student is a female given that nursing major d) Calculate P(M U F), P( M n F)

15)The probability that a person in the United States has type A+ blood is 31%. Three people in the United States are selected at random. Find the probability that

a) All three has blood type A+   b) None of the three has blood type A+

c) At least one of the three has blood type A+. d)Which of the events can be considered unusual? Explain

1.

2.

3.

4.

5.

6.

7,

8,

9.

10.

11.

12.

Famous Failures in Finance: Shady Trading at Enron Before it was known for its financial problems, Enron, a utility firm operating pipelines and shipping natural gas, had become famous as a business pioneer, blazing new trails in the market for trading risk. In the 1980s the price of natural gas was deregulated, which meant that its price could go down and up, exposing producers and consumers to risks. Enron decided to exploit new opportunities in the commodities business by trading natural gas futures. The natural gas futures that traded on the New York Mercantile Exchange did not take into account regional discrepancies in gas prices. Enron filled this void by agreeing to deliver natural gas to any location in the United States at any time. In addition to trading natural gas and other energy contracts, in the late 1990s Enron began trading weather derivatives for which no underlying commodities existed. These were just bets on the weather. Its weather-derivatives transactions were worth an estimated $3.5 billion in the United States alone. Thanks to its near-monopoly position in derivatives products, Enron’s trading business was initially highly profitable. At one point, the company offered more than 1,800 different contracts for 16 product categories, ranging from oil and natural gas to weather derivatives, broadband services, and emissions rights, and it earned 90% of its revenues from trading derivatives. And unlike traditional commodity and futures exchanges and brokers, Enron’s online commodity and derivative business was not subject to federal regulations. However, Enron eventually lost its unique position as the energy business started to mature. When other firms entered the online derivatives-trading business, they competed by charging lower commissions and exploiting the same regional price discrepancies that had been Enron’s bread and butter. Enron’s trading operations became less profitable. To find new markets and products, the company expanded into areas such as water, foreign power sources, telecommunications, and broadband services. The farther it moved from its core businesses of supplying gas, the more money Enron lost. The company sought to hide those losses by entering into more risky and bizarre financial contracts. When financial institutions began to realize that Enron was essentially a shell game, they withdrew their credit. At that point, despite rosy assurances from its founder and CEO Ken Lay, Enron went into a death spiral that ended in bankruptcy on December 2, 2001. In July 2004 Lay was indicted on 11 counts of securities fraud and related charges. He was found guilty on May 25, 2006, of all but one of the counts. Each count carried a maximum 5- to 10-year sentence and legal experts said Lay could face 20 to 30 years in prison. However, about three and a half months before his scheduled sentencing, Ken Lay died on July 5, 2006, while vacationing in Snowmass, Colorado. On October 17, 2006, as a result of his death, the federal district court judge who presided over the case vacated Lay’s conviction.

Please answer the questions.

Critical Thinking Questions: Could the Enron debacle have been prevented? If so, what actions should have been taken by auditors, regulators, and lawmakers? Please respond to the above questions.

Lazlo purchased a Samsung S7 smartphone from a local Toronto retailer in 2019. Initially, he was very happy with the phones’ performance, including the convenience of its extended battery life. This satisfaction ended abruptly, however, when Lazlo notice his pocket warming up, and upon pulling his phone out to investigate, felt it explode and catch fire in his hands. Lazlo was driving a vehicle at the same time so he quickly pulled over and tried throwing the phone out the car window. He did not initially succeed because, to his horror, the burning phone had stuck to the flesh of his hand. In great pain, Lazlo then drove himself to the hospital. There, doctors confirmed that the explosion had caused severe burns to Lazlo’s hands and wrists. Lazlo had to take several months off work to recover.

When Lazlo first purchased his S7 smartphone (S7), he considered it to be a safe product which reviewed well. However, Samsung’s Galaxy Note7 had the opposite reputation – it was actually considered to be dangerous. Indeed, the Note 7 had been made subject to a product recall around the time of Lazlo’s purchase because its defective battery system caused short-circuiting, leading the phones to sometimes burst into flames. Infact, the Note 7s were considered such a menace that they were banned on Canadian and US airlines – both in the cabin itself and in checked luggage. Samsung offered refunds or replacement phones but class actions against Samsung in relation to Note7 have still been proposed in the United States and Canada, for example.

Lazlo wondered if the S7 was being afflicted by the same battery problem as the Note7 and his internet search confirmed that several class actions had been commenced in the United States in relation to S7s catching fire and causing damage. The class actions allege that the S7 devices, along with several other Samsung models, are defective because they can overheat and explode. Lazlo is very relieved to have found a Canadian law firm that is pursuing a proposed class action against Samsung in relation to the S7 and Note7 as well as other Samsung models, and he would like to join it. But whether alone or as part of a class action, Lazlo wants to recover damages from Samsung for the terrible pain he suffered from being severely burned, his loss of income while he was off work, and the fact that one hand suffers from numbness that could well be permanent.

Applying the relevant and correct principle(s) of law discuss the following questions:

a) Explain the most applicable tort Samsung may have committed in relation to its S7 product   (4 marks)

b) Discuss what Lazlo have to prove in order to establish that tort and the defence(s) (if any) open to Samsung in this action? Test the elements of the tort identified against the scenario to determine whether an action based on the tort is likely to succeed. Provide reasons for your answer, with proper reference to the fact situation and the law.   (6 marks).

Note: Application means you have to identify the correct legal concept, define it, enumerate the elements and then apply it to the fact scenario before drawing conclusion.

The answers to each question should not exceed 1 page in length. Penalty will apply if length restriction is breached; 2 marks to be deducted. Marks will also be deducted for works without citations, bibliography and references.

PLEASE ADD REFERENCES.

T/F   

______ 21.    A member may omit answering a question on a tax return if reasonable grounds exist for omitting the answer to a question applicable to the taxpayer.

SSTS: ___________________________________________

______ 22. A member should not omit an answer to a question because it might prove disadvantageous to the taxpayer.

SSTS: ___________________________________________

______ 23.   If reasonable grounds do not exist for omission of an answer to an applicable question, a taxpayer is not required to provide on the return an explanation of the reason for the omission.

SSTS: ___________________________________________

______ 24. A member shall make a reasonable effort to obtain from the taxpayer that the taxpayers has maintained books and records or substantiating documentation to support reported deduction or tax treatments of items on a tax return.   SSTS: ___________________________________________

______ 25. A member can use estimates if fire, computer failure, or natural disaster has destroyed the taxpayer’s records.

SSTS: ___________________________________________

______ 26. A practitioner may endorse or otherwise negotiate any check issued to a client if the client has authorized the practitioner to do so.

230: ___________________________________________

______ 27. Tax advisors should provide clients with the highest quality representation concerning Federal tax issues by adhering to best practices in providing advice and in preparing or assisting in preparation of a submission to the Internal Revenue Service.

230: ___________________________________________

_____ 28. An enrolled agent has the same ability to practice before the Internal Revenue Service as does an attorney or CPA.

       230: ___________________________________________

______ 29. Practice before the Internal Revenue Service include preparing documents, filing documents, corresponding and communicating with the Internal Revenue Service and representing a client at conferences, hearings, and meetings.

230: ___________________________________________

______ 30. Enrolled Agents, enrolled retirement plan agents, and registered tax return preparers must renew their status with the Internal Revenue Service to maintain eligibility to practice before the IRS.

230: ___________________________________________

31. A CPA may be denied to practice before the IRS if he or she has not filed their own individual income tax returns.

230: ___________________________________________

______ 32. An employee of the Mississippi Department of Revenue may not practice before the Internal Revenue Service if such employment may disclose facts or information applicable to Federal tax matters.

230: ___________________________________________

______ 33. In order to practice before the Internal Revenue Service, an individual must be twenty-one years old.

230: ___________________________________________

______ 34. An individual must pass a written examination administered by the Internal Revenue Service in order to receive status as an enrolled agent.

230: ___________________________________________

______ 35. An enrolled agent must complete a minimum of 72 hours of continuing education credit during an enrollment cycle with a minimum of 16 during each enrollment year.

230: ___________________________________________

______ 36. An enrolled agent must complete two hours of ethics or professional credit each enrollment year.

230: ___________________________________________

______ 37. A practitioner who, having been retained by a client with respect to a matter administered by the Internal Revenue Service, knows that the client has not complied with the revenue laws of the United States or has made an error in or omission from any return, document, affidavit, or other paper which the client submitted or executed under the revenue laws of the United States, must advise the client promptly of such noncompliance, error, or omission.

230: ___________________________________________

______ 38. A practitioner should always exercise due diligence in determining the correctness or oral or written representations made by the practitioner to the Department of the Treasury.

230: ___________________________________________

______ 39. A practitioner should not publish the availability of a written schedule of fees and disseminate since it may be considered to be advertising.

230: ___________________________________________

______ 40. A practitioner should refrain from any type of advertising.

230: ___________________________________________