Evaluate your client company’s contingency plan
Read your client company’s response, see whether it is consistent
with lessons we learned in chapter seven and whether you can improve it
by applying this week’s lessons. Elaborate at least in 200 words and
cite the lessons from the Best Practices 7 assignment.
Business response to the
questionnaire
Graponne
| Please, discuss your contingency plan for dealing with recession, if
you have one. |
Our contingency plan include:
- Tighter control of our inventory levels
- Managing our cash. Making sure we have enough liquid reserves to get
us through the downturn
- Limiting discretionary expenses. Including delaying intensive
capital type projects.
- Keeping our team members fully engaged
- Making sure we have available credit (to finance cars that are not
selling as well as lines to draw down for working capital).
|
Bank of New Hampshire
| Please, discuss your contingency plan for dealing with recession, if
you have one. |
As previously mentioned, we build loan loss reserves and carefully
monitor for signs of economic stress that may impact our business. We
have sources of emergency liquidity available, and other similar tools
to ensure the viability of the bank through a very severe downturn.
Furthermore, we stress test our loan portfolios and entire balance sheet
to determine how the bank would perform in various economic scenarios.
This allows us to determine is additional reserves, liquidity, etc. are
needed. |
Comptus
| Please, discuss your contingency plan for dealing with recession, if
you have one. |
We do not have a contingency plan for an extended recession. |
Comptus is in a unique situation since they are a relatively low
employed company that supplies products to other organizations. Since
Comptus has no current contingency plan, there are some recommendations
that can be made. First, it can be pointed out as discussed in Real
World Applications 5, Comptus staffing is very light, and they utilize
outsourcing when they are busy. In a downturn we can return to in house
production. Using this current model and building it into a contingency
plan could be a valuable asset to have during an extended recession.
Comptus should be smart to take early and moderate steps when preparing
for an extended recession. Seeing warning sign of recession should
trigger the business to review Spending and sales to adjust expenses for
the upcoming storm. Furthermore, since Comptus is so reliant on other
organizations purchasing their products, having relationships that are
strong with these partners is crucial. Taking advantage of their
business position of supplying to companies in need can be a way the
business stays afloat. Having good client relations will allow them to
not only communicate any rise in prices to to supply chain issues or
inflation, but to continue to sell products at a productive and
relatively profitable rate; thus keeping them afloat during a long
downturn. Comptus must properly manage sales during an economic boom.
Making the most of expenses from production and sales numbers will
create a fluid and balances rate of sale for the company. Creating
flexibility is the key during extended recessions. Comptus must begin to
prepare for a recession before it hits. Managing these events must be
done by analyzing previous recession trends and creating a plan that can
not only keep the business afloat, but even possibly allow the company
to take advantage of a recession. Comptus can possibly cut their
expenses on materials, while still managing to produce quality products.
Looking at sales data on higher demand products might allow Comptus to
focus in more on the production of these services before purchasing
materials for products that are less profitable, especially during an
extended recession. All these ideas can help develop a well put together
contingency plan that Comptus can use to plan for recessions and review
and adjust after a recession hits. |