A manager received an analysis of several cities being considered for a new office complex. The data (10 points maximum) are as follows:

Location Score Factor A B C

Business services 6 6 6

Community services 4 6 7

Real estate cost 5 8 7

Construction costs 4 7 6

Cost of living 2 7 8

Taxes 4 5 4

Transportation 5 7 8

a. If the manager weights the factors equally, how would the locations stack up in terms of their composite factor rating scores?

b. If business services and construction costs are given weights that are double the weights of the other factors, how would the locations stack up?

Once the foreign physical asset risks have been analyzed their potential impact must be measured. As discussed in Unit 1, one method of determining impact is by applying Tables B. C and D found in Appendix B. Let’s take the previous example of CanCocoa, the hypothetical Canadian confectionery company. Instead of engaging new suppliers. CanCocoa has decided to purchase a small operation in Ecuador and they want to protect their new foreign physical assets. The practitioner completing the analysis has collected the following data: • Assume the nationally reported tosses from 2014-2021 were highest in the following areas: Flood (32.3 percent of incidents) Drought (27.5 percent of incidents) Eruption (21.7 percent of incidents) Landslide (7.8 percent of incidents) There are 35 volcanoes in Ecuador and 29 percent of the population tives within 30 km from a volcano; the new facility is not located within this range. • Ecuador’s GDP is very negatively affected by El Nino events, which occur approximately every 10 years • Estimate of probable losses in the region (probabilistic risk) for Ecuador are: Earthquake: 85.3 percent Flood: 14.5 percent < > FITT 417 Apply Your Learning 1. Why is it important to analyze and mitigate foreign physical asset risk? 2. Go to page 417 and answer the table. A travel services company based in Singapore is purchasing a branch office for a new venture in Mumbai, India. The following threat profile has been developed. a. Complete the chart with the associated threat values b. Rank the risks in priority order. c. If the organization decides to reduce the risk related to theft, what strategy could it implement?