Risk Assessment for Vacation in Florida Scenario

QUESTION

Since the RFP for the new terminal was finished, I thought that I should take a well-
deserved vacation. I had not been on vacation with my family for several years and
we decided that we would take a two-week trip to Florida during the long Canadian
winter. Because of school and work schedules there was only one two-week period
that was open for all four of us. We decided that the vacation would be on a cash
basis and we would not use any “plastic.” None of the family was about to object –
they were ready for warm weather and a vacation too. We had about $3000 that we
had in a savings account for the vacation and we had another $7000 in a certificate
of deposit that would not mature until the start of the second week of our vacation.
We thought that we could make planning the vacation a collaborative process.
To start the process we had to decide upon the requirements. Because the family
cars both had more than 90,000 miles and had to last another couple of years and
because none of us cared to sit in a car, bus, or train for an extended period – we
decided that we would fly to Florida and back. Neither our ten-year old son nor the
sixteen-year old daughter had ever been to Florida and wanted to spend most of
their time at the theme parks after talking with their friends about the entertainment
alternatives. My wife and I just wanted warm weather and some time together, so
we were willing to go along with the theme park focus.
We sat down together and decided the basic requirements for the trip and what
would be the minimum necessary to satisfy each requirement as well as the more
desirable alternatives that we could hope for. After several days we had researched
the costs associated with all of the alternatives for each of our basic requirements.
We then calculated the cost of meeting the “threshold” value for each requirement.
The “bare bones” vacation would cost about $5,000 and was well within our budget.
We also calculated the cost of the “dream” vacation. It was about $21,000 and
definitely out of our price range. We imposed a $3,000 limit on the first week and a
$7,000 limit on the second week (and a total limit of $10,000 on the trip).
Our basic requirements for the trip were as follows:
 We chose to use our own car and park it at the airport because the cost of using
the limousine was too much more. We discounted having one of the relatives
driving us to the airport because we didn’t want to impose. Nobody wanted to
ride in the shuttle.
 Due to recent world events budget airlines were out of business and we couldn’t
afford a charter. The cost of first class was more than four times the cost of the
non-stop coach and was clearly exorbitant. Although the refundable tickets with
the non-stop coach would have been nice, the $3000 constraint on the first
week’s spending caused us to go for the non-refundable tickets with the one-stop
(it took about 2 hours longer to get there).
 When we looked at the rental car prices, we decided that using a Cadillac or a
Lincoln for a week was not worth more than twice as much as a full size Ford or
Chevrolet. With four people and two weeks worth of luggage, we thought that the
small difference in price between the full size and the intermediate was worth it. I
don’t think we could have taken four people and the luggage too in one of the
compact alternatives.
 The first-class hotel suite would have been a real treat, but again it was more
than twice as much as the next alternative and would have used almost our
entire vacation budget. We had stayed at the first-class two-bedroom timeshareon a previous trip and for the price it was clearly superior to the other alternatives
so we stopped the discussion at that point.
 Three of the four of us have sensitive digestive systems and the more fast food
we eat, the worse we feel. We decided that eating three good meals a day was
particularly important and saving money by eating fast food could spoil the
vacation and the medical costs could easily exceed the savings on food.
 There were two or three theme parks that both the kids were interested in visiting
and they wanted to “do it all.” We planned on spending two days in travel, two
days lounging around the hotel or resort, and ten days at the theme parks.
Because keeping the kids entertained with other local attractions was almost as
expensive per day as the theme parks, we agreed that we could reallocate the
days at almost any time during the trip depending upon the weather and the
family level of interest.
 We agreed in advance that we would restrict the spending on souvenirs. Since
the relatives made a practice of bringing us gifts when they traveled, we thought
that it was appropriate to reciprocate. It was essential that the gifts for the
relatives be approximately equal in value because they would compare the gifts
and we didn’t want to hurt anyone’s feelings. Based on the gifts that the
relatives had given us in the past, we thought those gifts of less than $30 would
also cause some bad feelings. The $30 limit on souvenirs for the immediate
family was an aggressive goal based on past experience.
 Although the other members of the family were not in favor of a “management
reserve,” I thought that it was necessary to handle unanticipated expenses. I
would have felt comfortable with a $500 reserve for the first week, but I was
willing to assume a “moderate risk” with a $300 reserve because of the other
priorities and the $3000 constraint on the first week spending. The $500 reserve
for the second week did not conflict with our other priorities and was within our
budget.
With the budget set and the priorities negotiated we patiently waited until our
departure date. The day before our departure we went to the bank and got $500 in
cash and $2500 in traveler’s checks. I took $50 and the traveler’s checks and my
wife took the remaining $450 in cash

Objective: Identify the risks associated with the Vacation in Florida
scenario:
Instructions:

1. Conduct the Risk Assessment as follows: Using the attached form identify the P-I (use a scale 1-10 with 10 being the highest) and calculate severity by multiplying Probability X Impact. Rank the risks and provide a reasonable course of action to proactively manage the risk or treat if the risk were to occur. Identify target score once course of action is implemented.
2. Risks should be clearly stated and actionable. A helpful
   approach is to think in terms of an if condition, then
   consequences.
3. You must find 10 risks and provide an action for each.

ANSWER

Risk Assessment for Vacation in Florida Scenario

Risk 1: Flight Delay or Cancellation Probability (P): 7 Impact (I): 8 Severity: 56

Action: To mitigate this risk, consider purchasing travel insurance that covers flight cancellations and delays. This insurance can help recoup some expenses and provide alternative travel arrangements in case of flight disruptions.

Risk 2: Unforeseen Medical Expenses Probability (P): 5 Impact (I): 9 Severity: 45

Action: Ensure that you have adequate health insurance coverage during your trip. Also, carry necessary medications and maintain a budget for unexpected medical expenses.

Risk 3: Overspending on Souvenirs Probability (P): 6 Impact (I): 6 Severity: 36

Action: Set a strict budget for souvenirs and communicate this with your family members to avoid overspending. Stick to the $30 limit and prioritize thoughtful gifts over expensive ones.

Risk 4: Weather-Related Disruptions Probability (P): 4 Impact (I): 8 Severity: 32

Action: Keep an eye on the weather forecast and be flexible with your itinerary. Consider allocating some reserve funds for indoor activities or extending your stay if the weather is unfavorable.

Risk 5: Luggage Loss or Damage Probability (P): 3 Impact (I): 7 Severity: 21

Action: Invest in quality luggage, use luggage tags with contact information, and carry essential items in your carry-on bags. Be prepared for the possibility of lost or damaged luggage and have a contingency plan in place.

Risk 6: Unplanned Expenses Probability (P): 6 Impact (I): 5 Severity: 30

Action: Stick to your budget, and use the reserve funds wisely. Avoid impulse spending and prioritize essential expenses over discretionary ones.

Risk 7: Health-Related Issues Probability (P): 5 Impact (I): 6 Severity: 30

Action: Prioritize health and well-being during the trip. Follow dietary restrictions and maintain a balanced diet to reduce the risk of health issues.

Risk 8: Transportation Issues Probability (P): 4 Impact (I): 7 Severity: 28

Action: Ensure your car is in good condition before the trip and have a contingency plan in case of breakdown. Familiarize yourself with local transportation options in Florida in case of unforeseen issues with your own vehicle.

Risk 9: Overcrowding at Theme Parks Probability (P): 7 Impact (I): 6 Severity: 42

Action: Plan your theme park visits strategically, considering off-peak hours and days to minimize overcrowding. Make reservations in advance to secure entry to popular attractions.

Risk 10: Disagreements and Family Dynamics Probability (P): 6 Impact (I): 7 Severity: 42

Action: Communicate openly with your family members and set clear expectations for the trip. Be prepared to compromise and adapt to changing circumstances to minimize conflicts and keep the vacation enjoyable.

In conclusion, by identifying and assessing these risks associated with your vacation to Florida, you can proactively manage potential issues and ensure a smoother and more enjoyable trip. Implementing the suggested actions will help reduce the severity of these risks and enhance your vacation experience. Keep in mind that flexibility and effective communication within your family will be key to resolving any unexpected challenges that may arise during your trip.