Tropical Shores Resort (TSR) operates luxury beachfront properties across Southeast Asia. In December 2023, TSR developed detailed contingency plans for responding to potential tsunamis, including evacuation routes, emergency supply stockpiles, and staff training protocols.
Define the term 'contingency plan'.
Was this exam question helpful?
Atlas Manufacturing Ltd produces precision engineering components in multiple locations worldwide. After conducting risk assessments in 2024, AML identified several potential threats from crisis situations to business continuity.
State two potential crisis situations that could affect a business.
Was this exam question helpful?
Eastern Food Corporation, a major food producer in Indonesia, faced allegations of contamination in January 2024. Their management team managed the crisis situation well, with a particularly effective approach to communication.
State two elements of effective crisis communication.
Was this exam question helpful?
Alpine Solutions Ltd, a European logistics company, conducted detailed risk assessments in January 2024 to identify potential disruptions to their operations.
Define the term 'risk assessment'.
Was this exam question helpful?
As an important element of its contingency planning, Caribbean Cruise Lines developed new emergency protocols in March 2024 following changes to industry regulations.
State two key elements of contingency planning.
Was this exam question helpful?
Pacific Freight Limited conducted comprehensive risk assessments in February 2024 to identify potential threats to their operations.
State two limitations of risk assessment in contingency planning.
Was this exam question helpful?
Nomad Healthcare Solutions, a medical equipment manufacturer, implemented new organisational structures in March 2024 to improve their crisis management capabilities.
State two characteristics of crisis management.
Was this exam question helpful?
FoodWave, a restaurant chain, suffered a power outage affecting operations at multiple locations. It implemented a contingency plan that included backup generators and alternative cooking methods.
Explain one benefit for FoodWave of having a contingency plan during the power outage.
Was this exam question helpful?
AirEase Airlines is a low-cost airline operating domestic and regional flights. The company recently experienced a significant crisis when one of its planes encountered a mid-air technical failure, resulting in an emergency landing. While no injuries occurred, the incident caused widespread media attention, raising concerns about passenger safety.
To address the crisis, AirEase immediately grounded its fleet for inspections, issued public statements to reassure passengers, and provided compensation to affected customers. The company is now evaluating its contingency planning and communication strategies to minimise reputational damage and prevent similar incidents.
Explain one advantage and one disadvantage of AirEase Airlines’ crisis management approach during the technical failure incident.
Was this exam question helpful?
AirEase Airlines is a low-cost airline operating domestic and regional flights. The company recently experienced a significant crisis when one of its planes encountered a mid-air technical failure, resulting in an emergency landing. While no injuries occurred, the incident caused widespread media attention, raising concerns about passenger safety.
To address the crisis, AirEase immediately grounded its fleet for inspections, issued public statements to reassure passengers, and provided compensation to affected customers. The company is now evaluating its contingency planning and communication strategies to minimise reputational damage and prevent similar incidents.
Describe two factors AirEase Airlines should consider when revising its contingency plans.
Was this exam question helpful?
HealthPlus operates a chain of private hospitals. During a recent outbreak of a contagious virus in one of its facilities, the hospital faced a crisis when 20 staff members and patients were infected. The incident attracted media attention, and the hospital was criticised for its lack of preparedness.
To manage the crisis, HealthPlus implemented strict infection control measures, issued regular updates to the media, and provided counselling services for affected individuals. The company is now developing contingency plans to prevent similar crises in the future.
Analyse two benefits and one limitation of HealthPlus issuing regular updates to the media during the crisis.
Was this exam question helpful?
HealthPlus operates a chain of private hospitals. During a recent outbreak of a contagious virus in one of its facilities, the hospital faced a crisis when 20 staff members and patients were infected. The incident attracted media attention, and the hospital was criticised for its lack of preparedness.
To manage the crisis, HealthPlus implemented strict infection control measures, issued regular updates to the media, and provided counselling services for affected individuals. The company is now developing contingency plans to prevent similar crises in the future.
Explain one advantage and one disadvantage of HealthPlus implementing strict infection control measures during the virus outbreak.
Was this exam question helpful?
CleanWave installs water purification systems for residential and commercial customers. Recently, the company faced a crisis when its flagship water filter model was found to have a manufacturing defect that compromised water quality. This led to customer complaints, returns, and widespread criticism on social media.
To manage the crisis, CleanWave issued a product recall, offered free replacements, and posted updates on its website and social media channels. The company is now reviewing its production and quality control processes to prevent similar issues.
Explain one advantage and one disadvantage of CleanWave recalling its defective product.
Was this exam question helpful?
CleanWave installs water purification systems for residential and commercial customers. Recently, the company faced a crisis when its flagship water filter model was found to have a manufacturing defect that compromised water quality. This led to customer complaints, returns, and widespread criticism on social media.
To manage the crisis, CleanWave issued a product recall, offered free replacements, and posted updates on its website and social media channels. The company is now reviewing its production and quality control processes to prevent similar issues.
Analyse two benefits and one drawback of CleanWave posting updates on social media during the crisis.
Was this exam question helpful?
AeroLogix Drones (AD) is a medium-sized technology company based in Europe that designs and manufactures commercial drones for delivery services and agricultural use. Despite rapid growth, AD has faced production delays and increasing unit costs. Recent internal reports highlight that the AD’s overall capacity utilisation rate has fallen, while some parts of production experience bottlenecks.
To address inefficiencies, AD’s operations director has proposed changes to its production planning. One option is to introduce a just-in-time (JIT) system to reduce stock levels and speed up turnaround times. Another is to invest in greater stockpiling of components to minimise risks of supply chain disruption, as drone parts sourced from overseas can take up to two weeks to arrive.
AD has become increasingly concerned about inefficiencies in its operations. Managers regularly track performance measures such as labour productivity, delivery reliability, and workforce behaviour to inform decision-making. The operations director believes these indicators provide useful insights, but some employees argue that the measures do not capture the full picture of AD’s operational challenges. Table 1 shows selected performance measures for 2023–2025.
Table 1: Selected Performance Measures for AeroLogix Drones (AD)
Year | Average Labour Productivity (units per employee) | Deliveries Delayed (%) | Absenteeism Rate (%) | Defect Rate (%) |
2023 | 110 | 7 | 4 | 3 |
2024 | 108 | 10 | 5 | 4 |
2025 | 105 | 13 | 7 | 5 |
AD’s finance manager is concerned that the company’s profitability has weakened. Rising material costs, higher defect rates, and increased absenteeism have pushed up expenses and reduced profit margins. She has prepared a summary of key figures for 2025 (Table 2).
Table 2: Selected Financial Data for AD (2025)
Item | Value ($m) |
Sales revenue | 120 |
Cost of goods sold | 72 |
Operating expenses | 38 |
Interest | 2 |
Tax | 1.6 |
In late 2025, AD experienced a high-profile incident when one of its delivery drones malfunctioned, resulting in minor injuries to a member of the public. The event attracted significant media attention and sparked public debate about drone safety. Several municipalities have since tightened regulations, demanding stricter safety testing and certification before drones can be deployed commercially.
Internally, employees have raised concerns about the company’s response to the crisis, particularly the lack of clear communication and preparedness. The operations director has argued for urgent investment in a formal contingency plan to address potential crises in the future, while the finance director insists the priority should be on regaining profitability by cutting costs and addressing inefficiencies in operations.
In late 2025, AD experienced a high-profile incident when one of its delivery drones malfunctioned, resulting in minor injuries to a member of the public. The event attracted significant media attention and sparked public debate about drone safety. Several municipalities have since tightened regulations, demanding stricter safety testing and certification before drones can be deployed commercially.
Internally, employees have raised concerns about the company’s response to the crisis, particularly the lack of clear communication and preparedness. The operations director has argued for urgent investment in a formal contingency plan to address potential crises in the future, while the finance director insists the priority should be on regaining profitability by cutting costs and addressing inefficiencies in operations.
Using the information in the stimulus, discuss whether AD should prioritise contingency planning or cost-cutting in response to its current challenges.
Was this exam question helpful?
Resources 1-5 and Tables 1-2 (opens in a new tab) are required to answer this question.
Using the resources provided, recommend a course of action for Bella Moda Designs to ensure survival over the next five years. Justify your recommendation.
Was this exam question helpful?