HRM in International Context Essay Example | Topics and Well Written Essays - 2750 words

HRM in International Context - Essay Example This research will begin with the statement that the human resource department is of colossal importance with regards to sustaining the competitive advantage in any company. This paper will look at the best possible hiring method and selection in regards to the deployment procedures of international expansion of a company where an HR manager has to be hired. The best policy will be analyzed so that the optimal results can be experienced. The international HR manager will have a diverse range of activities from hiring to interacting with people at larger levels. Any kind of loopholes in this domain can cost the company a lot of monetary damage thus different criteria will be discussed. Risks in this process and their solutions will also be discussed. The key requirements of the job is to uphold the company work objectives and this requirement is perfectly in demand of the staffing policy which will make sure that the true potential of the company in terms of performance, results and s ervices is deployed. Any business or company that is looking to expand globally cannot sustain growth rate without optimal staffing strategies in the international context. In the given scenario, there can be a lot of options for the staffing policy and it is dependent on different volatile variables but keeping in view the company demands and international canvas setups, ethnocentric staffing policy will be best to adopt while hiring international HR manager. Ethnocentric staffing policy argues to hire the individuals from the company with the intention of transferring the core competencies beyond the borders. In this approach, the intent is to hire an individual from the parent country which is the baseline of the company and headquarters. All the services, instructions and process of the HR related activates takes place from the parent-oriented culture. Another staffing policy that can be best used in this case is geocentric in which there is an increased canvas of scope and the organizational hierarchy can hire best human resource irrespective of their location and nationality. This staffing policy promises the best results because this policy is feasible and prone to changes in terms of adaptability. In this policy, translational strategies must be inculcated because the need of both global integration and local responsiveness is very high.

Examining the influence of street gangs on juvenile delinquency in Thesis

Examining the influence of street gangs on juvenile delinquency in eastern NC - Thesis Example Currently according to police reports of eastern North Carolina the rate of growth of gangs is estimated to be at 35%. This year alone there are about 14,000 gang members with over 500 gangs. Some individuals have even attempted to carry out research on gang activities (Carlie, 2008). The table below was used by the department of Juvenile justice and delinquency prevention in North Carolina. It shows the level of prevalence of gang activity in North Carolina In his own account, Patrick Radden wanted to understand why the groups seemed to be distributed almost everywhere. He took the initiative of carrying out a research on the migration of gangs and the reason for gangs’ prevalence in some of the states, in the US (Kate, 2012). . He was able to carry out on the research explaining in details how the gangs migrated and spread to most parts of the state (Joyce, 2012). According to his research, he was unable to provide quantitative data, his information is only theoretical, and it proves the desire for further exploration. According to the various research activities carried out there is a problem to the society, as well as to the government. However, this works have helped the society to understand the magnitude and type of challenge it is facing. Conversely, the government has strived to establish the level of prevalence of the gang activities in the society together with its magnitude (Karen, Bullocka and Tilley, 2008). Although there is no much data concerning gang activities, what is available is enough to give all parties concerned i.e. the government and the society of the true picture of what is in the ground. The government has already done much concerning the issue of the gangs as well as the society. However, it is clear that what has been done is not enough and there is the need for more to be done (Harlow, 1983). These

Is Export oriented industrialization indispensable for economic growth

Is Export oriented industrialization indispensable for economic growth INTRODUCTION One of the key indicators, of economic development of a country, is its level of industrialization. That is, as many empirical investigations proved the main reason for increased divergence in living standards between the advanced countries and the developing countries is their level of industrialization. This being the fact, it is only after decolonization and end of world War II that, developing countries consciously adopted industrialization strategies for economic development purposes and as a solution, from their vulnerable dependence on export of few primary products and import of high valued manufactured goods (Brisbane, 1980). The low terms of trade in international market for primary goods from former colonies and the determination to get out of severe poverty and register sustained growth, were the main reasons for the diversification of the narrow structure of the colonial economy. Industrialization is beneficial for developing countries for many reasons including the following (i) it reduces their vulnerable dependence; (ii) it speeds up their economic growth process; (iii) it modernize the economy through spill over or externalities effects associated with industrialization, from advanced countries; (iv) create more employment for the vast population in rural agricultural sector and accelerate income growth which is used as a means to re-distribute income to the impoverished masses; and (v) generate more foreign currency through export which reduces balance of payment problems (Brisbane, 1980). As Brisbane explained, to industrialize, developing countries adopted import substitution strategies from about 1945 to the 1970s. Import substitution strategy is designed to produce few luxury consumer goods for domestic consumption behind a very high tariff wall. However, most countries which followed the import substitution strategy failed, to meet the goal of industrialization, while spectacular growth and development was reported from developing countries that pursued an export oriented strategy, in the 1970s. Defined simply, export-oriented Industrialization (EOI) often termed as export led industrialization (ELI) is a policy designed for the purpose of speeding up the industrialization process of a country through exporting goods for which the nation has a comparative advantage. This policy requires countries to open up their domestic market to foreign competition in return to getting access to international market. In order to promote EOI and ultimately economic development, complementary policies in relation to tariffs, trade, exchange rate, and others need to be adopted and employed. This paper will critically examine how export oriented industrialization is essential for economic growth in developing countries, if it can be backed up by appropriate policies on trade, industrial policy and exchange rate policy, geared for that purpose. The paper also argues that export oriented industrialization has its own drawbacks. Thus, the essay is structured as follows: In section 2, It the paper analyses the significance of policies on the functioning of EOI, particularly: trade policy, industrial policy and exchange rate policy that developing countries need to adopt and identifies areas where government intervention is needed to bring economic development. It then explains the drawbacks of export oriented industrialization, on export dependence countries, in Section 3. Then section 4, empirically examines how EOI contributes to economic development and the conclusions are presented in section 5. 2. Significance of Policies on EOI The role of complementary policies for effectiveness of export oriented industrialization is undeniable. This paper focuses mainly on how trade, industrial and exchange rate policies can support EOI policy. 2.1 Trade policy: Appropriate trade policy is one of the key tools used for effective of export oriented industrialization and for economic development, in general. That is, the better trade policy a country has, the better chance it has for industrial diversification, creating value added products and getting more income from export. Theoretical context: Even if, there has been little consensus on the relationship between trade and short- to medium -term economic growth-and even less on its role in long term economic development. The principle of comparative advantage, which prescribe countries to specialize as to their factor endowment, first described by David Ricardo, forms the theoretical basis for traditional trade theory and provides the rationale for free trade. The principle states that even if a country produced all goods more cheaply than other countries, it would benefit by specializing in the export of its relatively cheapest good (or the good in which it has a comparative advantage)(Murray Gibbs 2007, p. 10). And some classical economists believed that the principal base for this principle is the difference in factor endowments among countries determine the relative cost of production. However, this traditional theory from classical economists has been challenged as it doesnt explain well the actual trade patterns and as the theory has unrealistic assumptions, like perfect competition, full employment etc (Murray Gibbs 2007). In addition to the unrealistic assumptions, in real situations the theory favors advanced countries, and developing countries hardly benefit anything from it. The controversial Singer Prebisch thesis, also explained this situation by stating that it is the center that gets all the benefits of international trade while the periphery gets nothing, which opposes to the Ricardian Theory of Comparative Advantage. He argued: given the differences in the existing economic, productive and labor market structures between the periphery and the center (in the application of technology in traded goods and in the market structures; oligopoly vs. competitive) less-developed countries cannot benefit from international market, if they adopt comparative advan tage doctrine (Todaro and Smith 2009).This is because developing countries usually produce and export primary products which have lower terms of trade. And the scope for diversification is too narrow, and these conditions put developing countries to have vulnerable dependence on international market. Thus, unlike the classical economists static comparative advantage doctrine, dynamic comparative advantage is a better option for developing countries. This is because as more innovation, technology, capital, and other requirements for industrializations are met and as industrialization happens in developing countries, it will be easier to diversify their economic structure, as manufactured goods have better terms of trade than primary products. Skarstein (2007) in his paper Free Trade: A Dead End for Underdeveloped Economies,criticized the comparative advantage doctrine. He argued, what matters most in international trade is the absolute advantage that countries get out of it than a comparative advantage. And empirical evidences show that the doctrines of comparative advantage and free trade benefit the advanced countries only. This is mainly because the doctrines are likely to exclude international learning among countries. Particularly, the WTO agreement, Trade related intellectual property rights (TRIPS), which is a big challenge developing countries to acquire technology, skill and international learning from the rest of the world. He also argued, for a trade policy to function effectively, developing countries have to make sure that, this policy is well integrated with their industrial policy. And in addition to these, developing countries have to get support from advanced countries, through reduced import tariffs for goods from developing countries and by giving developing countries a chance to protect their industries and to get easy access to international market. He also stressed that, developing countries have to ensure that food security is maintained in their countries, as it keeps them safe from their foreign account, balance of payment problems as well. Thus, governments of developing countries have to protect agricultural production for consumption. Therefore, while designing policies, developing countries have to consider the dynamic comparative advantage or absolute advantage options. In addition to this, they also have to consider how their economic integration to the world economy should be in support of EOI. 2.2 Industrial policy: A proper industrial policy is also another important tool for effective export oriented industrialization, as a countrys industrialization depends on how individual domestic firms are protected. This is because, it is individual firms that innovate and harness technological change and compete in the world market (Suranovic, 2002). The basic policy component of industrial policy for developing countries is Infant industry protection. It is a necessary condition, because newly emerging firms in developing countries need some policy to help them grow strong and to safeguard them from intrusion of foreign firms in their market, that have a negative effect on their growth. Infant industries in developing countries can mainly be protected through import tariff mechanism, which reduce imports from the rest of the world and raises demand and production of domestic product. This protection enables the domestic firms to cover their higher production costs and to remain in business. Depending on the nature of the firm, infant industry protection strategy will help the domestic firms to produce efficiently and to be competent in international markets. However, in order to use the infant industry protection policy as a tool for export oriented industrialization, government of developing countries need to have reliable information about what industry to protect, how large the production tariffs need to be and over what period the tariffs will be reduced and eliminated. Because import tariffs have to be gradually reduced and eliminated, to increase efficiency of domestic firms. A complementary policy component to infant industry protection in export oriented industrialization is export promotion. This component stimulates export and allows the infant industry to have access to international market, while Infant industry protection policy allows the new domestic firm to grow strong. For industrial policy to be effective it has to be complemented by competition policy, as some regulations are required for the competition among domestic firms and simultaneously, as there is a need for policy to protect the domestic firms from intrusion of foreign firms in their market. A coherent execution of industrial policy requires a coordinated approach to trade policies. This is because trade policies are designed usually in accordance with a countrys trade negotiations, which include: policies related to investment, tariff, Intellectual property, and others. The effectiveness of tariffs as a tool for industrialization is also linked to the monetary policy framework within which it operates. When the capital account is liberalized control over exchange rates may be lost and the appreciation of exchange rates can obviously undermine export competitiveness and the impact of tariff protection (Murray Gibbs 2007, p. 19). 2.3. Exchange rate policy: The role of exchange rate policy in the success of export oriented industrialization strategy is undeniable. Exchange rate is a policy on the level of exchange rate of a countrys currency. The main challenge in formulating the exchange rate policy is in keeping balance between maintaining exchange rate stability and maintaining export price competitiveness, which requires devaluation. Devaluation increases the value of imports, while it gives options for exporters to choose either to reduce the prices of their products or to keep them as they are, to increase their profit margin. Thus, devaluation, at a cost of higher inflation, enables domestic industries to be competent internationally, by keeping the volume of import down and by raising the volume of export (domestic output) higher. The role of government in controlling inflation, to stabilize the economy is very essential, here. Thus, this phenomenon in addition to supporting the export oriented industrialization process it helps countries to improve their current account balance in Balance of payment problem (Jacob, Atta ; Keith R., Jefferis ; Ita, Mannathoko and Pelani, Siwawa-Ndai 2000) 3. Drawbacks of Export dependence A country is dependent on export, if export constitutes the largest portion of its gross domestic products. However, even if EOI strategy contributes for economic development, the extent to which this strategy is applied has to be considered for various reasons. To mention some of them, as dependency theorists argue: first, export dependent developing countries cause chaos on the long-term economic planning capacity of a nation-state (Barratt-Brown Prebisch) as these countries have little or no control over the market, to allow sustained economic growth through stable revenue. Second, Income from export is not a reliable source for economic development for developing countries. As many of the export oriented industrializations in these countries are owned by multinational corporations, and large portion of revenue from such sources are not repatriated, to be used for re-investment (Jaffee, 1985). 4. Empirical evidence: Skarstein, 2007 paper Free Trade: A Dead End for Underdeveloped Economies, showed the empirical evidences on EOIs contribution for miraculous economic development of the Asian tigers and the now developed countries. It mainly showed the relationship between economic development and effective implementation of infant industries protection policy and export promotion policy. In support of this, it is argued, that many people have argued that Infant industry protection was precisely the industrial development strategy that was pursued by countries like the US and Germany during their rapid industrial development before the turn of the 20th century. Both the US and Germany had high tariffs during their industrial revolution periods. These tariffs helped protect fledgling industries from competition with more efficient firms in Britain and may have been the necessary requirement to stimulate economic growth (Suranovic 2002) Bairoch also analyzed data and concluded that the different the effect of free trade on developed and developing countries is. In all the cases he analyzed, free trade has a positive effect on developed countries while it lets the least developed countries to suffer. He mentioned that United Kingdom registered its fastest growth during the period (1860 1880). In those cases he analyzed, how effective import tariffs for developing countries were in their economic development (Bairoch, 1972, p. 211). In his paper, Skarstein, illustrated, with detailed data how the East Asian tigers used industrialization policy for their economic development. That is: first by implementing a policy of protected import substitution and then, as their industries grow competent, by shifting their industrialization strategy to export oriented industrialization, with a slow reduction of import barriers for industrial good. And, at the same time, how implementing high import protection for their agriculture helped them to maintain food security and helped their success in industrialization The miraculous performance of the East and South East Asian countries during 1970s to 1990s cannot be analyzed without considering the connection between the export -oriented policies and economic growth. In the Newly Industrialized Economies from East and South East Asia, the general macroeconomic policies as well as selective export promotion policies facilitated the high export and economic growth. Following their path China and India also changed their policy stance in favor of export oriented policies and moved on the high growth trajectories. 5. Conclusions: In sum industrialization is a key process for developing countries for economic development. However, as many economists agree, the process of economic development is very complex, as it depends on large number of variables such as political system, socio economic structure, capital accumulation (both physical and human), trade, price fluctuations, and income distribution, and even more on geographical characteristics. As such, while export oriented industrialization contributes to economic growth, it is not necessarily indispensable to the growth and development of developing countries. As explained in this essay, EOI can be one of the key strategies to register economic growth. And in order for it to function effectively it has to be supported by appropriate components of the policy like: infant industry protection strategy, competition policy, export promotion strategy and others. More specifically, it requires well functioning and well integrated macroeconomic policies like: trade policy, industrial policy, exchange rate policy, investment policy, tariff policy and others. Government intervention also plays a key role in making the export oriented industrialization effective for economic development. Examined empirical evidences also reveal that Export-oriented Industrialization was particularly the characteristic of the economic development of the Asian Tigers: Hong Kong, South Korea, Taiwan and Singapore in the post World War II period . In addition to Asian Tigers, evidences also tell how EOI strategy contributed for the economic development of US, Germany and others, who are now in developed world category. However, though the role of export oriented industrialization in economic development is undeniable, countries have to also carefully consider its share in the gross domestic product, as larger export dependence has a negative effect on economic growth.

History of Motorcycles Essay

History Of Motorcycles And The Automobile Industries Marketing Essay Automobile is one of the largest industries in global market. Being the leader in product and process technologies in the manufacturing sector, it has been recognized as one of the drivers of economic growth. During the last decade, well directed efforts have been made to provide a new look to the automobile policy for realizing the sector’s full potential for the economy. Steps like abolition of licensing, removal of quantitative restrictions and initiatives to bring the policy framework in consonance with WTO requirements have set the industry in a progressive track. Removal of the restrictive environment has helped restructuring, and enabled industry to absorb new technologies, aligning itself with the global development and also to realize its potential in the country. The two-wheeler industry has been in existence in our country since 1955. Two-wheeler segment is one of the most important components of the automobile sector that has undergone significant changes due to shift in policy environment in India. The composition of the two-wheeler industry has witnessed sea changes in the postreform period. It consists of three segments viz. scooters, motorcycles and mopeds. India is the second largest producer and manufacturer of two-wheelers in the world. Indian two-wheeler industry has got spectacular growth in the last few years. Hero Honda, the ‘World No. 1’ two wheeler manufacturer for past 5 years in row is a joint venture between India’s Hero Group and Honda Motor Company, Japan has not only created the world’s single largest two wheeler company but also one of the most successful joint ventures worldwide. India is the second largest producer and manufacturer of two-wheelers in the world. Indian two-wheeler industry has got spectacular growth in the last few years. Indian two-wheeler industry had a small beginning in the early 50’s. The Automobile Products of India (API) started manufacturing scooters in the country. Bikes are a major segment of Indian two wheeler industry, the other two being scooters and mopeds. Indian companies are among the largest two-wheeler manufacturers in the world. Hero Honda and Bajaj Auto are two of the Indian companies that top the list of world companies manufacturing two-wheelers. The two-wheeler market was opened to foreign companies in the mid 1980s. The openness of Indian market to foreign companies lead to the arrival of new models of two-wheelers into India. Easy availability of loans from the banks, relatively low rate of interest and the discount of prices offered by the dealers and manufacturers lead to the increasing demand for two-wheeler vehicles in India. This lead to the strong growth of Indian automobile industry. The two-wheeler industry in India has grown rapidly in the country since the announcement of the process of liberalization in 1991 by the then finance minister Dr. Manmohan Singh, now Prime Minister of India. Previously, there were only a handful of two-wheeler models available in the country. Currently, India is the second largest producer of two-wheelers in the world. It stands next only to China and Japan in terms of the number of two wheelers produced and the sales of two-wheelers respectively. In the year 2005-2006, the annual production of two-wheelers in India stood at around 7600801 units. The trend of owning two-wheelers is due to a variety of facts peculiar to India. One of the chief factors is poor public transport in many parts of India. Additionally, two-wheelers offer a great deal of convenience and mobility for the Indian family. Hero Honda Motors Limited, based in Delhi, India, is the world’s largest manufacturer of motorcycles. Hero Honda is a joint venture that began in 1984 between the Hero Group of India and Honda of Japan. It has been the world’s biggest manufacturer of 2wheeled motorized vehicles since 2001, when it produced 1. 3 million motorbikes in a single year. Hero Honda’s Splendor is the world’s largest selling motorcycle. EVOLUTION OF TWO-WHEELER INDUSTRY IN INDIA Two-wheeler segment is one of the most important components of the automobile sector that has undergone significant changes due to shift in policy environment. The two-wheeler industry has been in existence in the country since 1955. It consists of three segments viz. scooters, motorcycles and mopeds. According to the figures published by SIAM, the share of two-wheelers in automobile sector in terms of units sold was about 80 per cent during 2003- ¬04. This high figure itself is suggestive of the importance of the sector. In the initial years, entry of firms, capacity expansion, choice of products including capacity mix and technology, all critical areas of functioning of an industry, were effectively controlled by the State machinery. The lapses in the system had invited fresh policy options that came into being in late sixties. Amongst these policies, Monopolies and Restrictive Trade Practices (MRTP) and Foreign Exchange Regulation Act (FERA) were aimed at regulating monopoly and foreign investment respectively. This controlling mechanism over the industry resulted in: (a) several firms operating below minimum scale of efficiency; (b) underutilization of capacity; and (c) usage of outdated technology. Recognition of the damaging effects of licensing and fettering policies led to initiation of reforms, which ultimately took a more prominent shape with the introduction of the New Economic Policy (NEP) in 1985. However, the major set of reforms was launched in the year 1991 in response to the major macroeconomic crisis faced by the economy. The industrial policies shifted from a regime of regulation and tight control to a more liberalized and competitive era. Two major results of policy changes during these years in two-wheeler industry were that the, weaker players died out giving way to the new entrants and superior products and a sizeable increase in number of brands entered the market that compelled the firms to compete on the basis of product attributes. Finally, the two- ¬wheeler industry in the country has been able to witness a proliferation of brands with introduction of new technology as well as increase in number of players. However, with various policy measures undertaken in order to increase the competition, though the degree of concentration has been lessened over time, deregulation of the industry has not really resulted in higher level of competition. A GROWTH PERSPECTIVE The composition of the two-wheeler industry has witnessed sea changes in the post-reform period. In 1991, the share of scooters was about 50 per cent of the total 2-wheeler demand in the Indian market. Motorcycle and moped had been experiencing almost equal level of shares in the total number of two wheelers. In 2003-04, the share of motorcycles increased to 78 per cent of the total two-wheelers while the shares of scooters and mopeds declined to the level of 16 and 6 per cent respectively. Different scenarios have been presented based on different assumptions regarding the demand drivers of the two-wheeler industry. The demand for mopeds is not presented in this analysis due to its already shrinking status compared to’ motorcycles and scooters. The high growth rate in motorcycle segment at present will stabilize after a certain point beyond which a condition of equilibrium will set the growth path. Another important thing to keep in mind while interpreting these growth rates is that the forecast could consider the trend till 1999 and the model could not capture the recent developments that have taken place in last few years . India is the second largest producer and manufacturer of two-wheelers in the world. Indian two-wheeler industry has got spectacular growth in the last few years. Indian two-wheeler industry had a small beginning in the early 50’s. The Automobile Products of India (API) started manufacturing scooters in the country. Bikes are a major segment of Indian two wheeler industry, the other two being scooters and mopeds. Indian companies are among the largest two-wheeler manufacturers in the world. Hero Honda and Bajaj Auto are two of the Indian companies that top the list of world companies manufacturing two-wheelers. The two-wheeler market was opened to foreign companies in the mid 1980s. The openness of Indian market to foreign companies lead to the arrival of new models of two-wheelers into India. Easy availability of loans from the banks, relatively low rate of interest and the discount of prices offered by the dealers and manufacturers lead to the increasing demand for two-wheeler vehicles in India. This lead to the strong growth of Indian automobile industry. HERO HONDA Hero Honda Motors Limited, based in Delhi, India, is the world’s largest manufacturer of motorcycles. Hero Honda is a joint venture that began in 1984 between the Hero Group of India and Honda of Japan. It has been the world’s biggest manufacturer of 2wheeled motorized vehicles since 2001, when it produced 1. 3 million motorbikes in a single year. During the 80s, Hero Honda became the first company in India to prove that it was possible to drive a vehicle without polluting the roads. The company introduced new generation motorcycles that set industry benchmarks for fuel thrift and low emission. A legendary ‘Fill it – Shut it – Forget it’ campaign captured the imagination of commuters across India, and Hero Honda sold millions of bikes purely on the commitment of increased mileage. Over 20 million Hero Honda two wheelers tread Indian roads today. These are almost as many as the number of people in Finland, Ireland and Sweden put together! Hero Honda has consistently grown at double digits since inception; and today, every second motorcycle sold in the country is a Hero Honda. Every 30 seconds, someone in India buys Hero Honda’s top -selling motorcycle – Splendor. This festive season, the company sold half a million two wheelers in a single month—a feat unparalleled in global automotive history. Hero Honda bikes currently roll out from its three globally benchmarked manufacturing facilities. Two of these are based at Dharuhera and Gurgaon in Haryana and the third state of the art manufacturing facility was inaugurated at Haridwar, Uttrakhand in April this year. These plants together are capable of producing out 4. 4 million units per year. Hero Honda’s extensive sales and service network now spans over 3000 customer touch points. These comprise a mix of dealerships, service and spare points, spare parts stockiest and authorized representatives of dealers located across different geographies. Hero Honda values its relationship with customers. Its unique CRM initiative – Hero Honda Passport Program, one of the largest programs of this kind in the world, has over 3 million members on its roster. The program has not only helped Hero Honda understand its customers and deliver value at different price points, but has also created a loyal community of brand ambassadors. Having reached an unassailable pole position in the Indian two wheeler market, Hero Honda is constantly working towards consolidating its position in the market place. The company believes that changing demographic profile of India, increasing urbanization and the empowerment of rural India will add millions of new families to the economic mainstream. This would provide the growth ballast that would sustain Hero Honda in the years to come. As Brijmohan Lall Munjal, the Chairman, Hero Honda Motors succinctly points out, â€Å"We pioneered India’s motorcycle industry, and it’s our responsibility now to take the industry to the next level. We’ll do all it takes to reach there. † WHICH SEGMENTS ARE BEING TARGETED AND NEED TO INFLUENCE THE TARGET MARKET? Geographic Segmentation calls for division of the market into different geographical units such as nations, states, regions, countries, cities, or neighborhoods. In the South Asian context, geographic segmentation assumes importance due to variations in consumer preferences and purchase habits across different regions, across different countries, and across different states in these countries. Demographic Segmentation In Demographic Segmentation, we divide the market into groups on the basis of variables such as age, family size, family life cycle, income, occupation, education, religion, race, generation, nationality and social class. One reason demographic variables are so popular with marketers in that they’re often associated with consumer needs and wants. Another is that they’re easy to measure. Psychographic Segmentation Psychographics is the science of using psychology and demographics to better understand consumers. In psychographic segmentation, buyers are divided into different groups on the basis of psychological/personality traits, lifestyle, or values. People within the same demographic group can exhibit very different psychographic profiles. Values and lifestyles significantly affect product and brand choice of consumers. Religion has a significant influence on values and lifestyles. Market Targeting: Effective Segmentation Criteria to be useful, market segments must rate favorably on five key criteria: 1. Measurable, the size, purchasing power and characteristics of the segments can be measured. 2. Substantial, The segments are large and profitable enough to serve. A segment should be the largest possible homogenous group worth going after with a tailored marketing program. It would not pay, for example, for an automobile manufacture to develop cars for people who are less four feet tall. 3. Accessible, The segments can be effectively reached and served. Differentiable, The segments are conceptually distinguishable and respond differently to different marketing-mix elements and programs. If married and unmarried women respond similarly to a sale on perfume, they do not constitute separate segments. Actionable, Effective programs can be formulated for attracting and serving the segments. Hero Honda is targeting at youth, Unicorn looked sportier than all the existing motorcycles in the premium segment and was pitted against Bajaj Pulsar, the leader with 75 percent market share in that segment. DIFFERENT PROMOTIONAL TOOLS USED AND THE STRATEGY BEING USING THESE TOOLS? Promotion: Above the line (ATL) is an advertising technique using mass media to promote brands. Major above-the-line techniques include TV and radio advertising, print advertising and internet banner ads. This type of communication is conventional in nature and is considered impersonal to customers. The ATL strategy makes use of current traditional media: television, newspapers, magazines, radio, outdoor, and internet. Hero Honda used Above the Line Promotion because in the Above the Line promotion co. members used advertisement through Radio, T. V. , Newspaper and Other media communications. Place: Geographical Placing: – Geographical placing of the product has divided into 4 markets and these are: 1. Local 2. National 3. Regional 4. International Hero Honda used National Market for sale the Hero Honda Splendor. Hero Honda is also planning an extensive marketing campaign with the launch, which would reflect the bike’s contemporary styling and advanced technology. The integrated marketing campaign for ZMR will include outdoor media, Web, mobile, ground activations, print and electronic media, said the company. Hero Honda Pleasure – â€Å"Why should boys have all the fun? † Isn’t that a must ride statement, that can tempt any girl to just buzz with the wind. The Hero Honda Pleasure is Hero Honda’s maiden venture into the burgeoning gear-less scooter market. The pleasure has schemed its strategies to be the best seller by concentrating much on the interest of young girls who love to rock the field of glamor, luxury and comfort. Eye catchy features: The Pleasure sports flashy colours, from Tahitian blue metallic, force silver to the ever trendy colour black. Multi-reflector headlight, body-coloured mirrors, multi-reflector indicators, trendy rear grip, modern tall light cluster, and a new age oval-shaped instrument panel all make the Pleasure a head-turner. For more comfort during the ride, the scooter is designed with broader seat that offers greater riding comfort. Capacious luggage space, has been configured which, is large enough to keep even a helmet. The Pleasure is equipped with a technology, tuff-up tube and tyre combo that offers immediate remedy in the event of a puncture, by releasing an anti-puncture sealant gel. It is capable of attaining a top speed of 77kph. Hero Honda ahead in introducing new technology. The Company has left the competition in the motorcycle segment far behind in volumes as its nearest rival, Bajaj Auto, is a distant second with a market share of around 28 per cent only. The company’s success till date relates to the timely decisions regarding introduction of new technology products. Hero Honda was the first company in India to set standards for fuel efficiency with the launch of a four-stroke motorcycle in the mid-Nineties. This decision is yielding good results even today as can be seen from an uninterrupted growth witnessed by the company in its sales turnover and profitability margins over the past several years. However, future growth in these financial parameters, to a large extent, would also depend upon the way competition gears up in the domestic motorcycle market from the local, as well as foreign players. An eye on the customer In an effort to enhance value for customers, the company has initiated the â€Å"Rs 1001 customer price† benefit program across all its models. In addition, the passport program — which entitles a customer to a Rs 1 lakh accident insurance, lucky draws, gifts against redeemable points, cash discount on consumer durables, free tickets to company sponsored events, etc. – has met with an encouraging response (it has attracted around five lakh members to date) and is expected to continue its success into the future as well. Hero Honda: A ‘passion’ for growth Hero Honda has come up with yet another year of sharp growth in financial performance. The company has developed this ability to spring a surprise in terms of outperforming expectationsThe increase in sales volume and improvement in realization have both played a role in pushing up the turnover. The change in product-mix in favour of higher value products has resulted in improved realization for the company. The growing popularity of the Passion model appears to be the key factor behind improvement in unit realization. Aided by the emphasis on indigenisation, the company has managed to achieve better operational efficiency. The positive impact of these measures is reflected in the form of lower raw material cost (in relation to sales). The company is all set to make a foray into the lower price segment of the four-stroke market. Taking into account the recent trend in performance, the company appears well positioned to retain its top position in the motor cycle market and also sustain the recent rate of growth. Hero Honda is World Leader For 2001- 02, volume up by 38 per cent ; net profit soars by 88 per cent; total turnover up by 42 per cent Achieves a high 48 per cent motorcycle market share; and 33 per cent two-wheeler market share Announces 350 per cent final dividend and 250 per cent celebration dividend (over and above special interim dividend of 250%) Over the last five years, company’s total turnover grows by a whopping 580 %; PAT by 919 % Hero Honda plans sports spectacular. Hero Honda plans to organize a sports and glamour extravaganza in the country, on the lines of the Laureus World Sports Awards currently on in Monaco , in association with the Laureus world sports for Good Foundation, the organizer of the award. Revving up to stay on top Having achieved the status of the largest two-wheeler company in the world, Hero Honda now seeks to retain that slot. The company has a large portfolio of brands, with the money-spinners being mainly Splendor (the world’s largest selling bike) and Passion. However, the company claims it was the launch of the 150cc CBZ, which established Hero Honda as an aspirational brand. â€Å"The launch of CBZ got us into a different league altogether. Celebrating its 25th year, Hero Honda released an innovative music video in the month of September. Titled â€Å"Hero Honda Dhak Dhak Go†, and involving as many as eight brand ambassadors of Hero Honda, the music video has been receiving rave reviews. WHICH STRATEGY OUT OF PUSH AND PULL IS USED AND WHY? Hero Honda is using both the strategy push as well as pull A push-pull-system in business describes the movement of a product or information between two subjects. On markets the consumers usually â€Å"pulls† the goods or information they demand for their needs, while the offerers or suppliers â€Å"pushes† them toward the consumers. Different push and pull strategies used by hero Honda: Push strategy Another meaning of the push strategy in marketing can be found in the communication between seller and buyer. In dependence of the used medium, the communication can be either interactive or non-interactive. For example, if the seller makes his promotion by television or radio, it’s not possible for the buyer to interact with. On the other hand, if the communication is made by phone or internet, the buyer has possibilities to interact with the seller. In the first case information is just â€Å"pushed† toward the buyer, while in the second case it is possible for the buyer to demand the needed information according to his requirements. Applied to that portion of the supply chain where demand uncertainty is relatively small Production & distribution decisions are based on long term forecasts Based on past orders received from retailer’s warehouse (may lead to Bullwhip effect) Inability to meet changing demand patterns. Large and variable production batches Unacceptable service levels Excessive inventories due to the need for large safety stocks Pull strategy In a â€Å"pull† system the consumer requests the product and â€Å"pulls† it through the delivery channel. An example of this is the car manufacturing company Ford Australia. Ford Australia only produces cars when they have been ordered by the customers. Applied to that portion of the supply chain where demand uncertainty is high Production and distribution are demand driven No inventory, response to specific orders. Point of sale (POS) data comes in handy when shared with supply chain partners Decrease in lead time Difficult to implement Key Hero Honda brands continue to drive strong volumes across segments – CD Deluxe in entry segment, Glamour, the new Splendor NXG, Splendor + and Passion Plus in deluxe segment, and Hunk, CBZ X-treme and Karizma in the premium segment. .Hero Honda’s strategy for aggressive top line growth through new product launches, brand building initiatives backed by innovative communication has resulted in market share gain across every segment. Indeed, Hero Honda’s share in domestic motorcycles market has been growing upward of 50 per cent, despite the slowdown in the two-wheeler industry â€Å"However, we will stay true to our winning strategy, and keep refreshing our product portfolio and continue to invest in brand building. CRITICAL APPRAISAL The feeling of freedom and being one with the Nature comes only from riding a two wheeler. Indians prefer the two wheelers because of their small manageable size, low maintenance, pricing and easy loan repayments. Indian streets are full of people of all age groups riding a two wheeler. Motorized two wheelers are seen as a symbol of status by the populace. Thus, in India, we would see swanky four wheels jostling with our ever reliable and sturdy steed: the two wheeler. Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile Industry of India has come a long way. India is the second largest producer and manufacturer of two-wheelers in the world. Indian two-wheeler industry has got spectacular growth in the last few years. In India there are 7 scooter manufacturers, 9 motorcycle manufacturers, 3 moped manufacturers. Bajaj Auto, Hero Honda, TVS, etc are the leading manufacturers. HEROHONDA has been the world’s biggest manufacturer of 2-wheeled motorized vehicles since 2001, when it produced 1. 3 million motorbikes in a single year. Hero Honda’s Splendor is the world’s largest selling motorcycle. Today Hero Honda has an assembly line of nine different models of motorcycles available. It holds the record for most popular bike in the world by sales for Its Splendor model. Strategies followed by hero honda Premium pricing, penetration pricing, economy pricing, and price skimming are the four main pricing policies/strategies. They form the bases for the exercise. However there are other important approaches to pricing. Promotion: Below the Line Promotion: „Below The Line is a common technique used for touches and feel products. Those consumer items where the customer will rely on immediate information than previously researched items. Below The Line techniques ensure recall of the brand while at the same time highlighting the features of the product. ‘Honda’ was already a household name in India. Hence, rather than putting major efforts into brand building, its marketing strategy emphasized on offering innovative products at competitive prices, novel promotional campaigns and developing an extensive distribution network†¦ So at last we can say that hero Honda is having a very good promotional strategy and this is the main reason of its success. It basically focuses on its customer satisfaction and from time to time it keep on showing its creativity and innovation It â€Å"However, we will stay true to our winning strategy, and keep refreshing our product portfolio and continue to invest in brand building. â€Å"One of the key pillars of hero honda strategy has been to consistently keep introducing new, advanced products and maintaining a balanced product portfolio.

Management And Maturity Of Income Essay Example Pdf - Free Essay Example

Sample details Pages: 17 Words: 5147 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? Financial Economics has made significant progress in asset management, the coordination between firms cash inflows with cash outflows by matching the maturity of income generated by assets with the maturity of interest incurring debts. People now little about the maturity structure of firms assets and liabilities, because willingly obtainable and thorough information regarding a firms liabilities and liabilities like commitment were not easy and time overwhelming to gather in our country, while many papers had explained how imbalances in the maturity period of asset and liability structure could be the main reason of currency and financial crises in the emerging markets, the factors that create such imbalances in the first place have established comparatively little attention so far. The agency costs can be reduced if firms issue short-term debt and, thus, are evaluated periodically. Don’t waste time! Our writers will create an original "Management And Maturity Of Income Essay Example Pdf" essay for you Create order Information asymmetry and conflict between shareholders and debt holders can be intensified in transition economies for three reasons: (i) lack of shareholder and creditor protection owing to the imperfect legal system; (ii) the high level of uncertainty enables firms with overdue debt to switch to high-risk assets, which increases flotation and/or transaction costs; and (iii) the ownership structure of companies in emerging markets creates potentially higher agency costs because managers dominate the board of directors and have comparatively greater control rights (Harvey, Lins and Roper (2004). Smith and Warner (1979) argue that riskier and smaller companies have higher agency related costs because managers of small companies have mutual interests with the shareholders since they are holding a larger proportion of the equity. The managers are interested in increasing the equity value even if doing so reduces the firms total value, behavior that obviously conflicts with the credi tors objectives. The objective of this study was to contribute and filling the gap of maturity mismatch between firms assets and liabilities, and firms can employ to reduce agency costs is to match the duration of assets and liabilities. Study showed theoretically how mismatch may lead to and exacerbate maturity mismatch due to market uncertainty, and how maturity mismatch increased output instability on the non/financial firms. Second, research provided empirical results that support the predictions that firms debt maturity was positively related to maturity of its assets to test this prediction the study made the model which depended on the following variable like debt maturity ratio, asset maturity ratio, market to book value ratio, and firm size. A common recommendation was that a firm would compare the maturity period of its assets to that of its long term liabilities. If long term liabilities had less maturity period with respect to assets, then there may not be sufficie nt cash on hand to pay back the principal when it was outstanding. On the other hand, if debt has a greater maturity period with respect to assets, then cash flows from assets come to an end, whereas debt expenses stay outstanding. Maturity matching could lessen these risks and then structure of corporate hedging that decreases predictable expenditure of financial distress. In a related element, Myers (1977) dispute that maturity matching could control agency conflicts between equity holders and debt holders by ensuring that debt reimbursements were planned to communicate with the reduction in the worth of assets. In a model of this fact, Chang (1989) revealed that maturity matching can reduce organization expenditure of debt financing. Hoven and Mauer (1996) study also reveals well-built support for the standard textbook recommendations that firms should compare the maturity period of their assets to that of their liabilities. Research investigation specified that asset maturity was an important aspect in explaining distinction in debt maturity structure. The sample of firms were taken from non/financial firms listed on the Kse-100 index and their financial data consisting from year 2004 to 2008 and those firms were used to analyze the distinctive financial characteristics. The reasons for choosing non-financial firms because it played significant role in the economy of our country and the measurement of maturity matching of assets and liabilities and reduction in agency cost would help these firms to avoid risks like liquidation and changing in interest rates. For example, if the duration of the maturity of assets was larger than the maturity period of its liabilities, then the maturity structure was at risk to growing interest rates. This was because the higher maturity period assets were more responsive to interest rates than the lower maturity period liabilities. If interest rates go up then the assets were turned down in value more rapidly than the liabilities were. If interest rates remain constant, there may be a deficit in supporting the liabilities. One way to diminish this problem was to rebalance the assets such that the maturity period of the assets were equal to the maturity period of the liabilities, then any interest rate modify has a minor outcome. If in the above case, the asset maturity period was too high, the maturity period must be shortened. This short fall may be achieved by either rebalancing the structure with shorter maturity period assets or by shorting longer maturity period assets, and if the firms debts and debt like obligations are larger then its assets in amount then this mismatch between the maturity period of assets and liabilities can lead it towards liquidation so to keep away from that liquidation the firms should keep up matching between the amount of its assets and liabilities, and companies that have a greater reliance on external finance face a comparatively weaker agency problem. De Ha as and Peeters (2006) agency cost issue can be alleviated by the higher variability of firm value, which can interfere with the firms ability to payoff its obligations. This was a key pattern of the advantage that Non-Financial firms listed on KSE-100 Index can acquire from this study by matching the maturity period of its assets to that of its debts and by reducing the agency cost problem. 1.2 Statement of Problem The objective of my study is to contribute to filling the gap of maturity mismatch between firms assets and liabilities, and the importance of agency cost, which shows theoretically how mismatch may lead to and exacerbate maturity mismatch due to market uncertainty, and how maturity mismatch increases output instability in the Non-Financial firms listed on KSE-100 Index. The purpose of the study is to notice whether the debt maturity structure described by Shah and khan (2005); Myers (1977); Titman (1992); Diamond (1991); Barnea, Haugen, and Senbet (1980); Jalilvand and Harris, (1984); Ozkan, 2000, Yi, 2005 and Whited, (1992); Warner (1979); Hoven and Mauer (1996); Barclay and Smith (1995); Barnea, Haugen, and Senbet (1980, 1985); and Hart and Moore (1995) present the detail regarding the debt maturity structure. The scope of study is to analyze the maturity matching structure between firms assets and liabilities, and agency cost problem. 1.3 Hypotheses H0: There is a posi tive relationship between Debt maturity and asset maturity. H1: There is a positive relationship between Debt maturity and Firm Size. H2: There is an inverse relationship between Debt maturity and Market to Book Ratio. 1.4 Outline of the Study The outline of the study processed as follows. Chapter one based on the introduction of the thesis, which consists of the some introduction of debt maturity structure by different researchers, the statement of problem, scope and objectives hypothesis etc. Chapter two consists of literature review given by different researchers, theories on debt maturity structure, and factors affecting the debt maturity structure. In chapter three, research methods were described, which contained method of data collection, sampling technique, sample size, research model developed, and statistical technique. Chapter four consists on the findings and interpretation of the results which were taken after the data collection process. Chapter five contained the conclusion, discussions, implications, recommendations, and future research. CHAPTER 2 LITERATURE REVIEW The literature included two types of theories about the debt maturity structure: agency cost theory, and maturity matching theory. 2.1 Agency Cost Theory Myers (1977) discussed that risky debt financing caused low investment benefits when a firms investment had chances to look for growth option. Financial Analysts worked to represent equity holders failed to accomplish profitable investment options because risky debt control a part of equity holders incentive in the form of a decrease in the probability of default. Myers represented that low investment benefits can be assured by providing short-term debt to mature before the growth options utilized. The hypothesis was that the firms assets had a greater ratio of growth options were used shorter-term debt. Titman (1992) presented that if growing firms have both the greater chances of bankruptcy and positive future-outlook then got incentive from borrowing short-term debt and going for a constant-rate contract. Briefly, there was an acceptance in the literature that growth (market-to-book ratio of assets) should be inversely correlated to debt maturity in the agency/contracting cos ts perspective. Williamson (1988) firms with more tangible assets should find asset substitution (risk shifting) more difficult, which lowers debt agency costs and thus raises optimal leverage. Hart and Moore (1995) defined the role of long-term debt in controlling managements capability in increasing funds for future projects. It was analyzed that long-term debt may restrict self-interested managers from financing non-profitable investments entails a direct variation of long-term debt with market-to-book ratio. Therefore, the relationship between growth options and debt maturity structure had an experimental issue. Diamond (1991) focused on the relationship between debt maturity and the credit value of a firm. Diamond defined liquidity risk as the risk that a debtor will lose control rents because creditors do not want to refinance, and therefore choose to liquidate the firm. Because short-term debt was seen by Diamond as being debt that matures before the profits of an in vestment were received, it was necessary to refinance short-term debt. For firms with high credit worthiness, the liquidity risk was not relevant. A decreased in credit worthiness did not lead to a crunch of credit to the firm. For this reason, firms with a high credit rating were expected to borrow on the short term. For firms with a medium credit rating, the liquidity risk can be of importance. Firms with a low credit rating also interested to borrow on the long term. Firms with a low credit rating were therefore forced to borrow on the short term. Firms with comparatively greater ratio of future investment opportunities tend to be littler. Barnea, Haugen, and Senbet (1980) found that organization conflicts, similar to Myerss (1977) underinvestment problem, could be restrained by reducing the maturity of debt. Therefore, smaller firms which faced additional harsh agency conflicts than larger well-maintained firms may use shorter-term debt to mitigate these conflicts. In most cases, the issuing costs of a public debt issue were fixed, and these costs were therefore self-determining of the size of the debt. Because public debt has a longer maturity than private debt, a positive relation between the size of a firm and the maturity of debt was proposed. However, those reasoning did not apply to small unlisted firms, because these firms make very little use of public debt. The present study also included leverage and industry affiliation as determinants of debt maturity. Arguably, larger firms have lower asymmetric information and agency problems, higher tangible assets relative to future investment opportunities, and thus, easier access to long-term debt markets. The reasons why small firms were forced to use short-term debt include higher failure rates and the lack of economies of scale in raising long-term public debt. It was further argued that larger firms tend to use more long-term debt due to firms remaining financial needs (Jalilvand and Harris, 1984). Agency problems (risk shifting, claim dilution) between shareholders and lenders may be particularly severe for small firms. Then, bondholders attempt to control the risk of lending to small firms by restricting the length of debt maturity. Large (small) firms, thus expected to had more long (short)-term debt in capital structure. Consequently, these arguments imply a positive relationship between firm size and debt maturity. It was widely accepted by the current literature that larger firms have lower agency costs of the debt (Ozkan, 2000, Yi, 2005 and Whited, 1992), because these larger firms were believed to have an easier access to capital markets (firms can more easily overcome the transaction costs) and a stronger negotiation power (firms have a stronger position in the debt negotiation than smaller firms). Hence both these arguments favor larger firms for issuing more long-term debt compared to smaller firms. In addition to it Smith and Warner (1979) argued that sma ller firms were more likely to face higher agency costs in terms of a conflict of the interest between shareholders and debt holders. Hoven and Mauer (1996) found out only little evidence for the agency cost aspect that debt maturity used to restrict the conflicts of interest between share holders and debt holders. Although smaller firms in the sample lead to used short term debt, findings also suggested that firms with big amounts of growth options have small leverage, and hence small to moderate incentive of debt maturity structure to reduce the conflicts of interest above the utilization of those options. Barclay and Smith (1995 ) test of the determinants of corporate debt maturity accepted the hypothesis that firms with greater growth choices in investment opportunity sets issued large amount of short-term debt. Study also found that firms issue large amount of long-term debt. The findings were robust to surrogate measures of the investment opportunity set. Technique as we ll propose to growth options in the firms investment opportunities be key in discussing both the time-series and cross-sectional fluctuation in the firms maturity structure. Study also supported strong relationship among firm size and debt maturity: superior firms issue a considerably bigger proportion of long-term debt. This was uniformed with the observance that small firms dependent more heavily on bank debt that traditionally had shorter maturity than public debt. Smaller firms had large growth options, which were indicating to employ shorter-term debt to reduce the agency conflicts; these indications assume debt as uncertain. Though, the capital structure theory suggested that these firms employ moderate amounts of leverage to mitigate the risk of financial loss. As such, firms with low leverage and low chances of financial loss would likely be unbiased to employ debt maturity structure to restrict agency conflicts, all other matters remain constant. Agency cost theory also proposed that smaller to medium size firms have relatively higher agency costs because the possible divergence of risk shifting and reducing the concentration between equity holders and managers (Smith and Warner, 1979). To overcome the issue and to control the agency cost short-term debts were recommended Barnea, Haugen, and Senbet (1980, 1985). The large constant flotation cost of constant securities comparative to the small size of the firm had an additional barrier that stops all small firms access to the capital market. Smith (1986) argues that managers of regulated firms have less discretion over investment decisions, which reduces debt agency costs and increases optimal leverage. Shah and khan (2005) evidenced the blended support for the agency cost, Study findings showed that smaller firms employ more shorter term debt then longer term debt; even there was no evidence that growing firms employ more of short-term debt as assumed by (Myers, 1977) that debt maturity varies i nversely to proxies for firms growth options in investment opportunities, The implication of firm size variable also verify the information asymmetry hypothesis, established it costly to access capital market for long term liabilities. 2.2 Maturity Matching Theory A frequent recommendation in the literature discussed that a firm should go with the maturity structure of its assets to that of its debt. Maturity matching can concentrate these threats and thus a structure of corporate hedging that decreased projected expenses of financial suffering. In a related element, Myers (1977) explained that maturity matching could control agency conflicts between equity holders and debt holders by ensuring that debt repayments had planned to match up with the decrease in the worth of assets in place. At the closing stages of an assets life, the firm encountered a reinvestment judgment. Concerning to debt that matures at that time assists to restore the suitable investment benefits as soon as new investments were needed. Though, this analysis specifies that the maturity of a firms assets did not the only determinant of its debt maturity. Its growth options play a vital role as well. Chang (1989) revealed that maturity matching could reduce organization ex penses of debt financing. Stohs and Maurer (1996) and Morris (1976) argued that a firm can face risk of not having sufficient cash in case the maturity of the debt had shorter than the maturity of the assets or even vice versa in case the maturity of the debt was greater than asset maturity (the cash flow from assets necessary for the debt repayment terminates). Following these arguments, the maturity matching principle belongs to the determinants of the corporate debt maturity structure. Emery (2001) argued that firms avoid the term premium by matching the maturity of firms liabilities and assets. Hart and Moore (1994) confirmed matching principle by showing that slower asset depreciation means longer debt maturity. Therefore, this study expected a positive relationship between debt maturity and asset maturity. Gapenski (1999) differentiated two strategies of maturity matching namely the accounting and financing approach. The accounting approach considers the assets as curren t and fixed ones and calls for the financing of the current assets by short-term liabilities and of the fixed assets by long-term liabilities and equity. The financing approach considers the assets as permanent and temporary. In these terms the fixed assets were definitely permanent ones and some stable part of the fluctuating current assets was also taken as permanent. This approach then suggests financing the permanent assets by long-term funds (long-term liabilities and equity) and temporary assets by short-term liabilities. Consequently, the financing approach generally employs ceteris paribus more long-term liabilities than the accounting approach does. Firms also consider asset maturity as an essential determinant of the debt structure. In contrast, companies that have a greater reliance on external finance face a comparatively weaker agency problem. The related agency costs are lower because the higher income variability of these firms erodes their capacity to cover their int erest and credit payments. Hoven and Mauer (1996) come across with well-built support for the regular textbook recommendations that firms should compare the maturity period of firms liabilities to that of firms assets. Study results were indicating asset maturity a key aspect in discussing instability in debt maturity structure. Shah and khan (2005) found unambiguous support for maturity matching hypothesis. Study findings reveal that the fixed assets vary directly with debt maturity structure. Myers (1977) argues that maturity matching of firm assets and liabilities can also partially serve as a tool for mitigation of the underinvestment problem, which was discussed in the agency costs theory section. Here the maturity matching principle ensures that the debt repayments should be due according to the decrease of the asset worth. Comparing maturities as an effort to list debt repayments to match up with the decrease in expected worth of assets now in place. Gapenski (199 9) differentiates two strategies of maturity matching namely the accounting and financing approach. The accounting approach considers the assets as current and fixed ones and calls for the financing of the current assets by short-term liabilities and of the fixed assets by long-term liabilities and equity. The financing approach considers the assets as permanent and temporary. In these terms the fixed assets are definitely permanent ones and some stable part of the fluctuating current assets is also taken as permanent. This approach then suggests financing the permanent assets by long-term funds (long-term liabilities and equity) and temporary assets by short-term liabilities. Consequently, the financing approach generally employs ceteris paribus more long-term liabilities than the accounting approach does. The financing approach (borrowing more on long-term basis) brings more stable interest costs than the accounting approach; but as the yield curve is usually upward sloped, the financing approach is also more costly. The financing approach versus accounting approach decision making is thus a classical risk return trade-off relationship. In praxis, the corporate commonly favor the accounting approach before the finance approach, the same holds for our consideration of maturity matching for the empirical evidence of the debt maturity structure. Based on these Maturity matching arguments, we will consider the impact of balance sheet liquidity immunization on the corporate debt maturity structure. The financing approach compared with accounting approach decision making had a classical risk return trade-off relationship. In praxis, the corporate commonly favor the accounting approach before the finance approach, the same holds for our consideration of maturity matching for the empirical evidence of the debt maturity structure. Based on these Maturity matching arguments, this study considered the impact of balance sheet liquidity immunization on the corporat e debt maturity structure. Guedes and Opler (1996) stated that the mean of estimation of asset maturity did not appear to be vary much between firms, those issue debt (term of one to nine years) and firms that issued debt up to twenty nine years term. But firms that issue debt for greater than thirty years term had assets with significantly long lives. Assumptions expect that firms will compare the maturity of assets and liabilities show that partially correct. Morris (1976) argues that such a strategy allows firms to decrease uncertainty both over interest costs over the assets life as well as over the net income that will be derived from the assets. (Emery (2001) the higher the term premium, the stronger should be the firms incentive for maturity matching. CHAPTER: 3 RESEARCH METHODS 3.1 Method of Data Collection Secondary data is comprised on non-financial firms listed on KSE-100 Index for year 2003-2008, collected from the different sources i.e. Karachi Stock M arket, Balance sheet analysis report published by State Bank of Pakistan and other internet sources. The data is comprised on following variables: Dependent variable Debt Maturity Independent Variables Asset Maturity, Firm Size, Market to Book Ratio, 3.2 Sampling Technique Procedure All the non-financial firms listed on the Karachi stock Exchange KSE-100 index selected for the purpose of conducting the research study. 3.3 Sample Size Sample for this study has been taken from Balance Sheet Analysis of non-financial companies listed on the Karachi Stock Exchange (2003-2008), a publication of Statistics Department of State Bank of Pakistan. The book contains six years data of balance sheets and income statements of non financial firms. 3.4 Research Model Developed Following model was determined the impact of different variables on the debt maturity and to test the hypothesis that the variables that impact on debt maturity were studied in this thesis, like: Asset Maturity, Firm Size, and Market to Book Ratio, by using multiple linear regression. DEBMAT = ÃÆ'Ã… ½Ãƒâ€šÃ‚ ± + ASSETMAT (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1) + SIZE (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2) + MV/BV (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²3) + ÃÆ'Ã… ½Ãƒâ€šÃ‚ ¼ Where DEBMAT is Firms Debt Maturity (Debt maturing more then one year / Total Debt) ASSETMAT is Firms Asset maturity (Fixed Assets / Depreciation) SIZE is Firm Size (Log (natural) of total assets) MV/BV is Market-to- Book Ratio (Market value of firms assets / Book Value of firms assets)  µ is error term ÃÆ'Ã… ½Ãƒâ€šÃ‚ ± is the Constant 3.5 Statistical Technique After collecting the data from the selected population, it was analyzed by using SPSS software to study the impact of independent variables on the dependent variables. The statistical technique Multiple Linear Regression was used to identify the variables that impact the debt maturity. CHAPTER: 4 RESULTS 4.1 FINDINGS AND INTERPRETATION OF THE RESULT: Multiple linear regression technique applied through SPPS software by using the Enter method, which is highly recommended for this type of analysis. Following results appeared: TABLE 1: MODEL SUMMARY FOR DEBT MATURITY Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate Durbin- Watson 1 .624 .389 .336 .16521 1.884 A. Predictors: (Constant), ln_assmt, ln_mkttobv, FIRM size B. Dependent Variable: sqrt_dema This table displays R, R squared, adjusted R squared, the standard error, and Durbin- Watson. R, the multiple correlation coefficients, is the correlation between the observed and predicted values of the dependent variable. Larger values of R indicate stronger relationships. R squared showed the percentage of deviation in the dependent variable explained by the regression model. Small values specify that the model did not in shape with the data well. Dependent variable (Debt maturity) and two independent variables (asset maturity, and market to book value ratio) were transformed to make the data normally distributed. It shows that 38.9 % variation in dependent variable (square root of debt maturity) was due to independent variables (log of asset maturity, firm size, and log of market to book value ratio). TABLE 3: ANOVA FOR DEBT MATURITY ANOVA Model Sum of Squares df Mean Square F Sig. 1 Regression .592 3 .197 7.228 .001* Residual .928 34 .027 Total 1.520 37 A. Predictors: (Constant), ln_assmt, ln_mkttobv, FIRM size B. Dependent Variable: sqrt_dema This table summarizes the results of an analysis of variance. If the significance value of the F statistic is small (smaller than say 0.05) then the independent variables did a fine work to clarify the deviation in the dependent variable. If the significance value of F is greater than 0.05 then the independent variables didnt clarify the deviation in the dependent variable. In this model the significance value of the F statistic is less then 0.05, thus the independent variables did a fine work to clarify the deviation in the dependent variable. TABLE 5: COEFFICIENT FOR DEBT MATURITY Unstandardized Coefficients Standardized Coefficients t Sig. Collinearity Statistics B Std. Error Beta Tolerance VIF Model 1 (Constant) -.733 .301 -2.434 .020 ln_assmt .266 .065 .559 4.063 .000 .948 1.055 FIRM size .041 .020 .288 2.097 .043 .954 1.048 ln_mkttobv -.055 .042 -.180 -1.311 .198 .957 1.045 EQUATION: Sqrt_dema = -0.733 + 0.266*ln_assmt + 0.041* Firm size 0.055*ln_mkttobv +  µ In this model square root of Debt Maturity was the dependant variable and the independent variables include Asset Maturity, Firm Size, and Market to Book Ratio,  µ is the error term. If debt maturity changed by 1 unit then asset maturity increased by 0.266, firm size increased by 0.041, and market to book value ratio decreased by 0.055. 4.2 HYPOTHESES ASSESMENT SUMMARY The hypotheses of the study were distinctive financial characteristics have significant impact on debt maturity. These financial characteristics were asset maturity, firm size, and market to book value ratio. In this study each the financial characteristic tested and concluded the results. TABLE 4.3 : Hypotheses Assessment Summary S.NO. Hypotheses R Square Coefficients SIG. 0.05 RESULT H1 There is a positive relationship between Debt maturity and asset maturity. 0.389 0.266 0.000 Accepted H2 There is a positive relationship between Debt maturity and Firm Size. 0.389 0.041 0.043 Accepted H3 There is an inverse relationship between Debt maturity and Market to Book Ratio. 0.389 -0.055 0.198 Accepted Chapter 5 DISCUSSIONS, IMPLICATIONS, FUTURE RESEARCH AND CONCLUSIONS In this study, multiple linear regression analysis is exercised to examine data collected from listed Pakistani non-financial firms for period 2003-08. Regression analysis is used to measure the long term debt used by firms. Debt maturity is taken as a dependent variable in the study where as asset maturity, firm size, and market to book value ratio are independent variables to measure their effect on debt maturity. 5.1 Conclusion The study concludes that the most important variables are debt maturity, and asset maturity. According to this study, these variables are most important in the prediction/ anticipation of maturity structure of firms asset and liabilities. According to study, asset maturity is very important for the model to predict the debt maturity structure. Asset maturity is positively related to debt maturity. This study confirmed matching principle by showing that slower asset depreciation means longer debt maturity. These results were also supported by Hart and Moore (1994). Firm size is also one of the important variables for this study. This study found out only little evidence for the agency cost aspect that debt maturity used to restrict the conflicts of interest between share holders and debt holders, these results were matching with the study conducted by Hoven and Mauer (1996). These results were varied in various countries, because there have been difference in environments and circum stances and firms make decision accordingly, it also showed that smaller firms employ more shorter term debt then longer term debt, which was supported by Shah and khan (2005). There was an acceptance of growth (market-to-book ratio of assets) should be inversely correlated to debt maturity in the agency/contracting costs perspective in this study, these results were supported by Titman (1992). 5.2 Discussion All variables were considered to be in line with the literature, however, based on regression coefficients shown by many variables along with dependency problem, the final model comprised of independent variables; asset maturity, and firm size had significant value of less than 0.05 which suggests that these variables have significant impact on the debt maturity of non-financial firms listed on KSE-100 index. On the other hand, results also revealed that market to book value ratio had significant value greater than 0.05 therefore it may not necessarily lead to an impact on non-financial firms listed on KSE-100 index. 5.3 Implications and Recommendations This research was limited to the non-financial firms listed on Karachi Stock Exchange. The data taken from 58 firms are taken through various sectors for the year 2003-08. It was suggested that such type of study should be carried out in other countries of Asia as well, as to have comprehensive idea about the debt maturity structure. Moreover, it is also suggested that other factors except ones examined in this study should be researched as to have perfect idea about the debt maturity structure. Besides that, this study can also be replicated in other developing countries. Reference Jose Guedes and Tim Opler The Determinants of the Maturity of Corporate Debt Issues The Journal of Finance, Vol. 51, No. 5 (Dec., 1996), pp. 1809-1833 Andreas Stephan, Oleksandr Talavera, and Andriy Tsapin (2008) Corporate Debt Maturity Choice in Transition Financial Markets Working Paper No.4/03 Harvey, C.R, Lins, K.V, and Roper, A.H (2004). The effect of capital structure when expected agency costs are extreme Journal of Financial Economic 74(1), 3-30. Attaullah Shah Shahid Ali Khan (2004) Empirical Investigation of Debt-Maturity Structure: Evidence from Pakistan Faculty member Institute of Management Sciences, Peshawar Mark Hoven Stohs and David C. Mauer The Determinants of Corporate Debt Maturity Structure The Journal of Business, Vol. 69, No. 3 (Jul., 1996), pp. 279-312 Michael J. Barclay and Clifford W. Smith, Jr. The Maturity Structure of Corporate Debt The Journal of Finance, Vol. 50, No. 2 (Jun., 1995), pp, 609-631. Williamson, 0, 1988, Corporate Finance and Corporate Governance Journal of Finance, 43, 567-591. Myers, S.C. (1977). Determinants of corporate borrowing Journal of Financial Economics 5 (November): 147-75 Hart, Oliver, and John Moore, (1995) Debt and seniority: An analysis of the role of hard claims in constraining management American Economic Review 85, 567-585. Smith, C, W, Jr, and Warner, J.B, (1979) On financial contracting: An analysis of bond covenants Journal of Financial Economics 7 (June):117-61. Diamond, Douglas W. (1991) Debt maturity structure and liquidity risk Quarterly Journal of Economics 106, 709-737. Chang, C, 1989. Debt maturity structure and bankruptcy Working paper, Minneapolis: University of Minnesota. Kim, C.S Mauer, D.C, and Stohs, M. Hoven. (1995). Corporate debt maturity policy and investor tax-timing options: Theory and evidence Financial Management 24 (spring): 33-45. De Haas, R, and Peeters, M, (2006). The dynamic adjustment towards target capital structures of firms in transition economies Economics of Transition 14(1), 133-169. Barclay, M.J, and Smith, C.W, Jr. (1995). The maturity structure of corporate debt Journal of Finance 50 (June): 609-31. Titman, S, and Wessels, R, (1988). The determinants of capital structure choice Journal of Finance 43 (March): 1-19. Gapenski, L. C. (1999): Debt-Maturity Structure Should Match Risk Preferences Healthcare Financial Management, December 1999, pp. 56-59,

System Engineering Management Plan - Free Essay Example

Sample details Pages: 26 Words: 7671 Downloads: 3 Date added: 2017/06/26 Category Statistics Essay Did you like this example? System Engineering Management Plan (SEMP) 1 Statement of work In 20th century, system engineering has been developed for human beings in order satisfy their needs in transportation services by implementing multipurpose vehicle. The aim of inventing amphibious automobile is to travel on the road as well as operate in water as water vehicle. The objective of our team is to produce an energy efficient, environmentally friendly consumer vehicle which can compete Richard Bransons record set in the Gibbs Aquada implemented on 2004.To develop the conceptual new generation of amphicar, the team has to research on the first generation model manufactured in 1961-1968. As described on the above, to beat in performance as well as in energy efficiency, team need to be digested in the ideas of Gibbs Aquada. Don’t waste time! Our writers will create an original "System Engineering Management Plan" essay for you Create order To meet the above requirements, amphicar should be assembled with jet engine using Supersonic Amphibious (SSA) Technology to increase the acceleration compare with the last generation. The vehicle will have the maximum capacity of 4 persons, which average body weight of 80KG. The amphicar should have minimum operation hour of 2 hours in the water. The expected project duration for the whole project will be 30 days with reserved one week for any delay. The project can be divided into 4 major chapters, which are Systems Engineering Management Plan, System Requirement Specification, Functional Analysis and Allocation and System Specification. Each chapter will have 2 days for preparation, 3 days for research and 2 days for final report. 2 Work breakdown structure 2.1 Gantt Chart 2.1.1 Schedule Functional Analysis Allocation 2.2 Cost No Name Budget (US$) Expected Cost (US$) 1 Project Plan 20,000 20,000 2 1 Statement of Work 1,000 3 2 Work Breakdown Structure 0 4 2.1 Schedule 0 5 2.2 Cost 0 6 2.3 Product Testing Method 1,500 7 3 Program Management 2,500 8 4 Risk Management 2,500 9 5 Resources Required 2,500 10 6 Deliverables 5,000 11 7 Organization Structure 0 12 8 Operational Concept 5,000 13 System Requirements Specification 20,000 20,000 14 9 Scope 0 15 9.1 System overview 1,000 16 9.2 Document overview 2,000 17 10 Referenced Document 2,000 18 11 Needs 12,000 19 12 Requirements 2,000 20 12.1 General Requirements 1,500 21 12.2/3 Priority Table Method Table 500 22 12.4 System Capability or Mode 1,000 23 Functional Analysis and Allocation 10,000 10,000 24 13 Scope 2,000 25 14 Referenced Documents 1,000 26 15 Functional analysis 2,500 27 16.1 Physical Overview 2,000 28 16.2 Component details 2,500 29 System test specification 10,000 10,000 30 Document overview 2,000 31 Test detail 8,000 32 Final system specification 15,000 15,000 33 Final analysis Documentation 15,000 34 Miscellaneous 5,000 5,000 Total cost for the whole project 80,000 80,000 2.4 Product testing method Testing is a kind of demonstration the abilities of the product in terms of performance characteristics, advantages and limitations that have been adequately determined for a specific purpose. Reliability is an objective measurement of method reproducibility. If the test is not sufficiently reliable, that product is not qualified for using on intended purposes. In order to achieve the relevant outcomes of our amphicars objectives, there is some common stages of testing method will be gone through as listed below; Risk Assessment Methods identify new methods in testing methods and strategies Research investigate mechanisms and other resources that can be applied in design and test activities Development incorporate strategies into standardized test methods Validation make sure the accuracy and reproducibility are 100% granted Acceptance determine acceptability for users Implementation ensure effective ways of method for operators and users 3 Program management Project manager will look after the entire project, call for meeting two times a week for progress checking and review whenever issues arise during the period. Project engineer will work out on design specification to be developed and tested accordingly. Risk officer will report risk resolution status to management team. Technical and sale engineers will control the quality assurances and functionality of entire project. Individual will have second plan for the case of emergency if first plan is failed to implement. Each and everyone will communicate and discuss the progress of the project via phone, online instant messages and email. 4 Risk management 4.1 Purpose This document describes how we perform the job of managing risk for Amphicar II project. It defines roles and responsibilities for participants in risk processes, risk management activities that will be carried out, schedule and budget for risk management activities including any tools and technique that will be used. 4.1.1 Project Manager The project manager will assign a Risk Officer to the project for identifying purposes on the projects organization chart. Project Manager, Risk Officer and all project engineers should have videoconference biweekly to review the status of the risk mitigation efforts, review the exposure assessments for any new risk items. 4.1.2 Risk Officer Coordination of risk identification and analysis activities, maintenance of the projects risk list, notification of project management of new risk items and submission of the report in risk resolution status to management. 4.1.3 Project Engineers/Sale/Technical Engineer Officer will assign each newly identified risk to a Project Engineer, who will assess the exposure and probability for the risk factor and report the results of that analysis back to the Risk Officer. All Project Engineers are also responsible for performing the steps of the mitigation plan and reporting progress to the Risk Officer biweekly. 4.2 Risk Documentation Risk Identification 1. Man Power From individuals or organizations, illness, death, resignation. 2. Project Job taking too long, unable to complete within deadline. 3. Financial Over spent project budget, no enough fund to complete the project. 4. System Failure Sever or PC down or crash. 5. Communication Break Down Failure to pass down information. 6. Technical Individual weakness of technical skill and knowledge 7. Procedural Failure of accountability internal system and control. 8. Health Safety Injuries staff in the course of project. 9. Security Loss of data through unauthorized access. 10. Confidential Improper used of data by the staff 4.3 Analysis of Risk and Risk Rating Matrix 4.3.1 Risk Likelihood Assessment Table Probability Description Almost Certain 1 in 10 Chance Likely To Occur Likely 1 in 100 Chance Will Probably Occur Possible 1 in 1000 Chance May Occur Occasionally Unlikely 1 in 10,000 Chance Do Not Expect To Happen Rare 1 in 100,000 Chance Do Not Believe Will Ever Happen 4.3.2 Risk Rating Matrix Table LIKELYHOOD CONSEQUENCE Insignificant Minor Moderate Major Catastrophic Almost Certain Low Significant High High High Likely Low Significant Significant High High Possible Low Low Significant High High Unlikely Very Low Low Significant Significant Significant Rare Very Low Very Low Low Low Significant 4.3.3 Risk Action Level Table Risk Level ACTION LEVEL Very Low Risk Officer Low Risk Officer Significant Department / Team High Project Manager / Department 4.4 Risk response 1. Man Power For individuals or organization, illness, death, resignation, personal matter. Lack of manpower could have caused the direct impact on the whole project progress, such as delaying on the deliverable of the project within given time. According to our Gantt chart, to lessen the impact or to overcome for above risk, we have targets for each section to complete one day before the dead line and also as we have split up our project, everyone has to be submitted to the project manager advanced in two days before the dead line. So that, in case someone leaves in an unexpected condition, we still have time slot to cope the job within the given time. 2. Project Job taking too long, unable to complete within deadline. There could be many reasons for the delay. It is very important and we could face the liability for the delay period. To overcome this risk, we have reserved some tolerance period and fund. Keep track on the project progress with the Gantt chart schedule. 3. Financial After spending more on low priorities, there is not enough funds to complete the project. There are a lot of factors that could cause the financial over spent. The major cost consuming factors are labor cost during the test process to improve the functionality due to unexpected time delay and longer period to done the test. Improper budget plan may cause the project failure. To overcome the risk, we have allocated the budget accordingly and set aside some fund, so that in case of financial crisis or in the worst scenario, we still have some budget to work out. To minimize the test cost without jeopardizing the quality of the product, we implemented all the test procedure and specification carefully. 4. System Failure Sever / PC down or crash. Equipment break down could cause the major issue as well. In the event of server or computer which important information stored was crashed or unable to operate, there will be a delay. We need to re-do all the work and it might cause project failure. To overcome and lessen the impact from this risk, everyone had kept their project information not only in the computer but also at external hard drive and thumb drive. After sending out to project manager at the given date, the project manager had compiled all the individual work and saved it in his external hard drive as well. 5. Communication Break Down Failure to pass down information. The breakdown in communication could cause the total destruction of the entire project. To overcome this risk, we have a schedule to meet one week 2 times, the first meeting of the week will be conducted by video conference. 6. Technical Skills- Weakness of knowledge in technical skill could prolong the employee is handling and maybe even impose the danger or damage to himself or the whole project. To overcome this risk, each one of us has to monitor closely and updates each other. Anyone finds out some important information on the web or book that could improve our knowledge and skill for this project, we had to share by mail or scan the page and attach it. 7. Procedure Failure of accountability, internal system and control. Failure of accountability, internal system and control could cause the whole organization structure collapsed. To lessen this risk, we had already implemented the role and responsibility for each one of us and organization chart. This will ensure each one of remain still on the track while doing project. Moreover by having flexible organization chart (rotation of duty) will ensure that everyone is involved. 8. Health Safety Injuries staff in the course of project. Health and safety always has been the highest priority in every organization. Lacking of safety requirement could cause paralyze the whole organization and goal. To overcome this risk, we had been oriented with safety requirement and regulation issued by WHS (Work place Safety and Health). 9. Security Loss of data through unauthorized access. Loss of data through unauthorized access could have more than unexpected impact on the progress of the project. To overcome the risk, we had implemented all the security access code to our equipments and facility, which contains the informations of the entire project. 10. Confidential Improper used of data by the staff. Improper used of confidential data may cause in leak aging of information to the third party as well as there can be bad reputation in Society. To lessen the risk, we had been brief all the staffs regarding about how to take precaution on this issue. 4.5 Risk Assessment RISK RISK TYPE IMPACT Likely-hood Risk level Current control Mitigation options Risk owner Man power Delay project Medium Medium Amber Back up man power Set target earlier date Risk Officer Overrun dead line Financial Medium Low Amber Closely monitor with schedule time line Risk Officer Over spent on budget Project failure High Low Amber Set aside some fund Risk Officer System Down Operational High Medium Orange Back up system Department /Team Communication break down Project failure High Low Amber Twice a week meeting Risk Officer Lack of skill and knowledge May danger to other Medium Low Amber Sharing knowledge Risk Officer Failure of accountability Operation Medium Low Amber Role responsibility Risk Officer Health safety Sick or Injury Medium Low Amber Brief on WHS Risk Officer Lack of security Operational Medium Low Amber Implement access code Risk Officer Leakage of confidential Operational, Financial High Low Amber Brief on the rule Risk Officer 5 Resources required Defining the resource requirement is dividing the responsibilities of the people who involved. To do this, initially, listing roles and responsibilities for the project then start with the ideal way in which the project should be organized. It is often useful to refer back to the previous project that the people done before which kind of roles and responsibilities exhibited. Also review the resources available such as software, PCs, budgets limitation for the project and the individual member skill that they possess. Lastly, it is required to arrange the responsibilities, which is suited for every team member. 6 Deliverables The projects are monitored from planning to operations. In accordance with the customers needs, wants and expectations, the project should have to plan towards delivering. The purposes are to complete on time, within budget, with the highest degree of quality, etc. Following are some facts of deliverables Procurement and Contract Management The decisions are to be made including selection of contractors and the types of contracts to be utilized. Executive Summary This should be a clear and concise summary of the current status of the project such as budget, schedule, quality etc Project Activities and Deliverables This is to highlight the deliverables occurring the previous month and planning for the next one to report in meeting, audits and other reviews, design packages submitted etc. Action Items/Outstanding Issues The action items/ outstanding issues may be dropped from this section upon full implementation of the remedial and upon no further monitoring anticipated. Product Quality The product is needed to plan corrective actions for deficient in quality. Internal and Stakeholder Communications It should have a discussion between the internal members and stakeholder. Environmental Monitoring The environmental permits may be obtained to specify additional requirements to be adhered. Safety and Security In order to complete the project, safety and security is required for all individuals working. Traffic Management This should be the requirement for providing monitoring and oversight of day-to-day maintenance of traffic operations. Project Communications (Media and Public Information) A critical objective for the projects is to maintain the trust, support and confidence of the media and public throughout the project. Human Resources Management This includes how roles and responsibilities for the project. Any other project functions that the project sponsors feel would be beneficial to include in the project Management Plan to ultimately help in meeting the project Objectives. 7 Organisational structure 7.1 Roles And Responsibility Project Manager will manage the entire project, assign right task to the right person, call up the meeting and always take note of the deadline. Project Engineer will directly assist to project manager with majority in developing and testing the project. Sale Engineer shall have responsibilities of marketing, budget control, banking and purchasing. Technical Engineer manages the technical part and specification of the project. Risk Officer will maintain the projects risk list, safety and security of the entire project. 8 Operational Concept The project is about the design of the Amphicar-II which is the amphibious vehicle and able to operate as a recreational water vehicle and travel on the land. The aim of the project is to produce an energy efficient, environmentally friendly consumer vehicle and crossing in the English Channel to beat the record of Richard Branson set in the Gibbs Aquada (2004). General description of the project The project carried into 4 parts. a. Draft systems engineering management plan (SEMP) b. Draft system requirement specification (SRS) c. Draft functional analysis and allocation (FAA) d. Final system specification (SS) Before we start the project, we formed the organizational group. Then we analyzed the work breakdown structure, such as schedule, cost and product testing method. First, we drew the gantt chat for schedule and estimated the cost. Then, we analyzed the program and risk management and defined resources and types of deliverables. In the second stage, we defined needs and system requirement specifications. The needs include able to travel on road and water, environmentally friendly, energy efficient and cross the English Channel to beat Gibbs Aquada. The requirements are general, safety, user, environmental, security and privacy and legal requirements. In the third stage, we sketched the functional analysis and allocation. We used the core software to produce the diagram. We sketched the physical designs and write the component details and matched them. And we drew the flow chart to analyze the system. In the final stage, we performed the system testing and summarized the project. And, we made the modification according to the test result. Then, we prepared the report and handover to the customer. System Requirements Specification (SRS) 9 Scope The aim of amphicar-II project is to produce an energy efficient, environmentally friendly consumer vehicle that is capable of travelling on road and operating as a recreational water vehicle. Moreover to introduce the vehicle to public, the first prototype will be used in crossing in the English Channel, beating Richard Bransons record set in the Gibbs Aquada. After years of on the road development, amphibious cars start to introduce to the public which can travel not only on the land also on the water. In this project, we are trying to pursue the new technologies to provide better innovative, efficient, affordable options for daily life. To concern about this, below will briefly describe what the system all about is according to purpose, operation and maintenance. 9.1 System Overview 9.1.1 Vehicle On The Road Hybrid system Hybrid means any vehicle that combines two or more sources of power that can directly or indirectly provide propulsion power. [7] It uses the rechargeable energy storage system and uses as power source to drive the vehicle. As concerns increase over global warming, hybrid uses less fuel and causes less pollution to environment as well as easy mode of transportation and lessening. Operation of hybrid system with engine According to our needs, we should be using Gasoline-electric Hybrid Structure that can compatible to our aims. This structure includes the following parts to operate as hybrid system; Gasoline engine the gasoline engine using in our Amphicar II project will be smaller than other normal car engines but it can help to reduce emissions and increase efficiency Fuel tank the fuel tank in a hybrid acts as an energy storage device for gasoline engine Electric motor the technology of electric motor using at hybrid system is very advance and can be used not only as a motor also as a generator to supply power source to engine. Electric motor can pull energy from the batteries as well as will recharge again while the vehicle is moving. Generator the generator only produce electric power to the engine Batteries the batteries are the energy storage devices for the electric motor in a hybrid car. As for energy efficiency and environmentally friendly, we have choose to use hybrid technology engine for our amphicar-II. Hybrid system is the wave of the future and there is more incentive to purchase one. In our conceptual design for land, the standard production model of Amphicar II will be sport car design and power by larger V-6 engine and more powerful electric motor, with the combination of the concept of plug-in hybrid that will able to go from zero to 62 miles per hour (100 kilometers per hour) in 3.5 sec and will has a top speed of 187miles per hour (301 kilometer per hours) with CVTs continuously variable transmission 5 speed manual high performance close ratio transmission. It will be the first ever its kind of in amphibian car, which can able to deliver the performance of sport car with maximum fuel efficiency. The vehicle type will be front engine, front wheel drive with 3.73-1 axle ratio, 2-doors, 4-passengers, convertible top, fitted with four wheel independent suspension and brake with stainless steel rotor. The amphicar-II will be approximately weighs 3,300lbs(1500 kg) and the weigh will be split up 53-47%, with 53% on the drive tires on the front 9.1.1.1 Operation The controls and operation will be completely carlike on the land. On water the accelerator can be use as a throttle and the steering remains as the same. 9.1.1.2 Vehicle Style The styling of the amphicar-II body structure will be look a bit like Lamborghini. The dimension of the vehicle is 4 meter in length, 2 meter in width and 1.5 meter in height. 9.1.1.3 General Feature Of The Vehicle There will be climate-control system, 4- air bags, tachometer, drivers passengers electric seat, drivers seat memory, speedometer for land and water, cruise control mode, oil pressure, engine temperature, voltage meter, gasoline fume detector, bilge ventilation blower, compass, clock, navigation (GPS), auto pilot system in water mode and AM/FM stereo. 9.1.2 Vehicle On Water Jet Engine To provide faster speed with better performance, we decided to use jet engine with lightweight and compact design while driving on the water. Though there are different types with varies sizes in jet engines, the technology used in jet engine is all the same. The fact is they depend on the high-pressure column of water pushed out of the engine to propel the boat. To travel on the water our Amphicar-II will be power by Berkeley Marine Jet with power trim package and it will has capable of speed up to 40mph (65 km/h) on water. It will able to pull a water skier easily. The Berkeley Marine jet will be design to be lighter and more compact. It will have half a length and one-third the weight, compare to most other water jet. The impeller will be installing and contain inside the body of the jet, therefore it will be very safe for swimmers. The amphicar-II will have a low speed reversing capability by running the water jet in reverse direction. The steering will be mounted on the back of the stator nozzle and will connect to the car steering wheel. 9.1.2.1 Main Body Materials Another great thing about this amphicar-II will be durable and attractive. The lower part of the amphicar-II will be lightweight component the 5052-alloy aluminum single piece hull. The upper part of the amphicar-II body will use lightweight fiberglass to minimize the overall weight of the amphicar-II. 9.1.2.2 Feature On The Lower Part Of The Body The hull will be design to be aerodynamic in road mode and hydrodynamic in water mode. It will provide over 1750kg of hydrodynamic lift. It will also provide a stable planning surface allowing the amphicar-II to skin/plane over the surface of the water when given sufficient from the jet. The hull will have a keel fin that will give s directional stability and provide grip for high speed handling performance on water. There will be a spray rails and chin either side of the body, it will prevent the water spray to the cockpit and ensure the occupants remain dry. Also it will provide grip to give exceptional maneuverability. 9.1.2.3 Special Feature The hull will be pack with floatation foam and the amphicar-II will not sink if it knocked at the bottom part of the body. It will only float on the water in the worst scenario, but it would not sink. 9.1.2.4 Special Feature Of Suspension This amphicar-II will have retractable 4 points independent front and rear suspension system. By retracting its four wheels up to within the wheels housing, it will prevent from the wheel dragging to the water and will increase its water performance, and better manoeuvre ability. Also it will automatically decouple when the engine no longer drives them. The hydraulic rams that move the control arm suspended corner up and down, also serve as automatic ride height control. 9.1.3 Mode Transition There will be mode selection switch, to change either water mode or land mode. The mode selection switch will interlock with water sensor, to prevent from changing to water mode while driving on the road. So that to change from land to water mode, the water sensor has to detect enough water depth in order to retract the four wheels. The switch will also have a cover to prevent from accidentally switching of mode select switch. By pressing the mode selector button to marine mode, it will drops the clutch, disengages the road drive, shifts the transmission into aquatic duty, retract the wheels, the jet drive kick in and take off in water. All this process will take place within 10 sec. The retraction of the wheel will be as same as what AQUADA used but only difference is that the wheels are retracted upwardly and aluminum plates will be occupied firmly without leak aging at the place of the wheels. So the entire Amphicar looks like totally as a boat floating on the water surface confidently. In order to prevent leaks, this Amphicar-II has covered with a single frame using aluminum metal. 9.1.4 Performance It will be like a sport car on the road and speedboat on the water. 9.1.5 Maintenance Frequent hull inspections at panel seams and joints are essential. The user should check and clean after cruising in salt or brackish water is a thorough hosing with fresh water for the entire hull and all exposed suspension and nautical propulsion components. Items need to be check by service engineers are lists down below, 1. Road test 2. Wash oil filter cap and breather 3. Wash air filter and carburetor 4. Renew filter 5. Wash out the petrol pump 6. Clean petrol gauge of three way cock 7. Check fan belt tension and dynamo mounting bolts 8. Check cooling and heating system 9. Clean sparking plugs 10. Renew sparking plugs 11. Check and clean dynamo and starter motor 12. Check and tighten cylinder head nuts 13. Check valve clearance (cold) adjust if necessary 14. Check ignition clean and adjust contact points 15. Check engine, gearbox, radiator and exhaust mountings 16. Check brake and clutch pedal travel, also handbrake 17. Check the gear shift mechanism 18. Check play of steering, adjust if necessary 19. Check tightness of steering mounting bolts and linkage 20. Check play of stub axle bolts, re tighten if necessary 21. Check steering knuckle arm play, re tighten if necessary 22. Check brake hoses for condition and leaks 23. Check front and rear hub bearing adjustment 24. Check shock absorber mounting and coil springs 25. Check function of door hinges and locks 26. Check weather-strips and sealers for condition. Apply talc powder to door sealers 27. Check the vehicle for water tightness 28. Check function of all Bowden cables 29. Check tightness of exhaust flange to manifold 30. Check all bolts, screws and nuts of body, retighten 31.Check wheel studs for tightness, retighten if necessary 32.Check tire pressures 33.Interchange road wheels to balance wear 34.Check toe-in align if necessary 35.Wash Bilge pump and strainer 36.Check operation of all electrical components, adjust headlamps 37.Wipe clean door handles, gear shift, and steering wheel 38.Test run, final inspection, check idling of engine, adjust if necessary Items to be service during maintenance. 1. Grease castor rods 2. Grease steering universal joints 2a. Check steering box oil level 3. Grease stub axle 4. Grease axles tubes 5. Pock front and rear wheel hubs with grease 6. Grease track rods 7. Check water transmission oil level 8.Check gearbox oil level 8a. Change gearbox oil 9. Grease inside joints 10. Grease universal joints 11. Check battery electrolyte 12. Grease propeller shafts 13. Generator a few drops of oil 14. Smear distributor cam with oil 15. Check radiator water level 16. Grease water pump (8 hand stokes) 17. Check engine oil level 18. Oil filter cap 19. Change engine oil 20. Grease outside joint 21. Grease axles tubes 22. Change water transmission oil 23. Lubricate hinges and door locks 24. Check and top up brake fluid 9.1.6 Sponsor and Developer Project sponsor is AdSing and the developer for conceptual design is New Generation Pte Ltd. AdSing will put forward to independent sub-contractors for further iterations of the SDLC (System Development Lifecycle). 9.1.7 Operating Site Current operating site is in Marina Bay, Singapore and future will be all over the world, which has resort beach. 9.2 Document overview This document comprises the detail in the allocation of the functional statements and physical elements of the Amphicar-II project system, which are decompose from the information gathered in the early phases. It incorporated with diagrams of the physical elements and functions breakdown in the form of Functional flow Block diagram. This will provide clearer view and presenting on the sequences and the interfaces between the main and the sub-categories. Detail descriptions on the functions and components attributes will mentions to provide information on each element performances. The purpose is to draw out all the requirements needed to be met and also identify the systems effectiveness and its performance at all levels. These documents are highly classified serves several important roles in the process for the development. Therefore, only with the given authorized project manager, Sithu Aung, would be allowed to access. Validation for referencing is needed at all times. Legal action will be taken for reviewing of contents and copyrights. 10 Referenced documents 10.1. Amphicar Website, 20 January 2010, Detail technical spec, viewed 20 21 January 2010 https://www.amphicars.com/acteng.htm 10.2. Youtube, 20 January 2010, Amphicar technical Video, viewed 20 21 January 2010 https://www.youtube.com/watch?v=kS_QW-Iw_eQ 10.3. Gibbstech Website, 20 January 2010, HSA Technology, viewed 20 21 January 2010 https://www.gibbstech.com/downloads/HSA_technology.pdf 10.4. Wikipedia, 20 January 2010, Environmental issues, viewed 20 21 January 2010 https://en.wikipedia.org/wiki/hybrid_vehicle#Environmental_issues 10.5. Eartheasy, 20 January 2010, Hybrid cars, viewed 19 20 January 2010 https://www.eartheasy.com/live_hybrid_cars.htm 10.6. Powerofh-asia, 20 January 2010, Lexus Hybrid Portal, viewed 19 20 January 2010 https://www.powerofh-asia.com/#/TheExperience 10.7. Howstuffworks, 20 January 2010, Hybrid-car, viewed 19 20 January 2010 https://auto.howstuffworks.com/hybrid-car1.htm 10.8. Amphibiouscar, 20 January 2010, Amphibiouscar, viewed 19 20 January 2010 https://www.amphibiouscar.net/ 11 Needs The customers desires become the important to our projects needs and requirements. The surveys come from the customer feedbacks are our core objectives and the project aims. To meet this aspect, we made the outlines for the needs. 11.1 Speed 11.2 Safety 11.3 Durability 11.4 Operation 11.5 Navigation 11.6 Security 11.7 Comfort 11.8 Entertainment 11.9 Engine and Fuel 11.10 Maintenance (Warranty) 11.11 Environmental friendly 11.11.1 Using Hybrid Engine for nature friendly and to go green 11.11.2 Recycle the vehicle when it ends the service life 11 Environmental friendly 11.1 Hybrid engine will be assembled for nature friendly and to go green. 2 Analysis Demonstration 11.2 Every vehicle needs to recycle when it ends the service life 2 Analysis Calculation 11.1 Speed 11.1.1 Able to drive at the maximum speed of 180 km/h on land 11.1.2 Able to drive at the maximum speed of 70 km/h on water 11.2 Safety 11.2.1 Equipped with enough air-bags for 4 persons 11.2.2 Equipped with water-leakage alarm 11.2.3 Equipped with over-load detection alarm 11.2.4 Equipped with 4 life-jackets 11.2.5 Equipped with built-in paddles in case of emergency of engine breakdown 11.2.6 Equipped with the button to trigger SOS signal to request the help from the coast guard 11.2.7 Equipped with fire-extinguisher to kill fire 11.2.8 Equipped with first-aid kit 11.3 Durability 11.3.1 The body of the car is hull type to be able to float on seawater as well as on fresh water 11.3.2 The material shall be tough enough to resist the weather 11.3.3 The engine shall be long-life span 11.4 Operation 11.4.1 Auto transmission system using user control switch (land/water) 11.4.2 Gear box using the auto mode and manual mode 11.4.3 Power steering wheel 11.4.4 Easy handling with foldable roof under shine or wet 11.4.5 Equipped with hydraulic wheel retracting method to reduce hull drag in water mode 11.4.6 On the land, using V.6 or hybrid engine 11.4.7 On the water, using Berkeley Marine Jet 11.5 Navigation 11.5.1 Using GPS to provide navigation 11.5.2 Able to view map location on LCD screen 11.6 Security 11.6.1 Support remote control 11.6.2 Authorize lock with thumbprint control 11.6.3 Equipped with alarm system to detect of unauthorized personal 11.7 Comfort 11.7.1 Cruise control for easy drive in land mode 11.7.2 Leather seats 11.8 Entertainment 11.8.1 In car entertainment system like radio or CD player 11.8.2 DVD player for land mode (optional) 11.9 Engines and Fuel 11.9.1top-up windscreen cleaning liquid when necessary 11.9.2 check air pressure of the wheel occasionally 11.9.3 refill the fuel before the empty fuel indicator light is on 11.10 Maintenance 11.10.1 Preventive maintenance in every 10,000 km or every 6 months 11.10.2 Servicing for Engine for both land and water 11.10.3 Maintenance service in wheel balancing and body alignment 11.10.4 Check regularly for hydraulic oil, engine oil and leakage checking 11.10.5 Preventive maintenance service in battery and electrical parts 12 Requirements 12.1 General requirement The general requirement of the system is able to drive on the land and water. It is also the energy efficient and environmentally friendly vehicle, which is easy to operate. Each requirement needs the following information: 12.1.1 Requirement Identifier: Required a unique requirement ID number 12.1.2 Requirement: Write requirement statement according to the needs 12.1.3 Traceability: Reference where the requirement came from 12.1.14 Priority: Levels of important of the requirements 12.2 Priority Table Priority No Summary 1 Highest Priority, safe and efficient 2 Higher Priority, affordable and environmental 3 Moderate Priority, ease and convenience 4 Lower Priority, to meet personal requirement 5 Lowest Priority, to meet general requirement 12.3 Verification Method Table Test type Description Demonstration Demonstrate and test to proof the performance. Analysis Analysis discuss the system which has not satisfied result. Calculation Calculate especially for mechanical parts Simulation Simulate the system before physically test ID Requirement Priority Verification Method 1 Speed 1.1 The speed of the vehicle shall not be less than 180 km/h with the maximum weight 1900kg on the land. 2 Calculation 1.2 The speed of the vehicle shall not be less than 65 km/h with the maximum weight 1900kg on the water. 2 Calculation 2 Safety 2.1 Air-bags protection system shall activate not more than 1 second for 4 persons. 1 Demonstration 2.2 Water-leakage alarm shall be sound not longer than 4 seconds where there is leakage. 1 Simulation 2.3 Over-load alarm shall be triggered whenever the load more than 1900 kg. 1 Demonstration 2.4 Life jackets shall be provided for 4 persons whose average weight is not greater than 80 kg. 1 Demonstration 2.5 Two built-in paddles shall not be longer than 50 cm in folded and 150 cm in normal condition. 1 Demonstration 2.6 The driver not more than 0.5 m away from the seat in case of emergency shall access the SOS signal button. 1 Simulation 2.7 Fire-extinguisher shall be installed not more than 0.5 m away from the driver seat. 1 Calculation Analysis 2.8 The passenger not more than 0.5 m from the seat shall access the first-aid kit. 1 Calculation 3 Durability 3.1 The body of the hull shall be made of alloy aluminum, which is able to float on water. 2 Simulation 3.2 The outer layer of the vehicle shall be painted with coating which is able to resist the weather. 2 Simulation Analysis 3.3 The engine of the vehicle shall be maintenance free engine, which has minimum life span of 10 years. 2 Analysis Calculation 4 Operation 4.1 The transmission of the car shall be auto transmission system, which is control by user switch. 2 Simulation 4.2 The gear box of the car shall be auto mode and manual mode. 3 Analysis 4.3 The car shall be had power steering function which is able to turn 360 degree. 3 Analysis 4.4 The vehicle shall be equipped with foldable roof, which can be operated not more than 5 seconds. 4 Demonstration 4.5 The vehicle shall be equipped with hydraulic wheel retracting system which is able to keep the wheel not more than 3 seconds. 2 Simulation 4.6 On the land operation, the vehicle shall be used hybrid engine. 2 Analysis 4.7 On the water operation, the vehicle shall be used Berkeley Marine Jet. 2 Analysis 5 Navigation 5.1 The vehicle shall be used GPS to provide navigation system. 3 Demonstration 5.2 The vehicle shall be equipped with LCD screen, which is not smaller than 10cmX8cm to view the map location. 4 Simulation Analysis 6 Security 6.1 The power of the vehicle shall be ON by users remote control not more than 2 seconds delay. 2 Analysis 6.2 The car operation shall be enabled by user thumb-print control. 2 Analysis Demonstration 6.3 The vehicle shall be equipped with alarm system whenever the car was driven by unauthorized personal. 2 Analysis 7 Comfort 7.1 The vehicle will be equipped with cruise control for easy drive in land mode 3 Demonstration 7.2 Leather seats is essential to be comfortable when drive in both land and water 3 Demonstration 8 Entertainment 8.1 In car entertainment system will definitely attract the user for listening music or news on radio or CD player 4 Demonstration 8.2 User can watch movie from 7 screen of DVD player for land mode (optional) 4 Demonstration 9 Engines and Fuel 9.1 User need to top-up windscreen cleaning liquid when necessary 5 Analysis Simulation 9.2 User must check air pressure of the wheel occasionally 1 Analysis 9.3 User need to refill the fuel before the empty fuel indicator light is on 5 Analysis 10 Maintenance 10.1 Service engineer have to do preventive maintenance in every 10,000 km or every 6 months according to PM checklist 1 Analysis Calculation 10.2 Technical engineer needs to service the engine for both land and water 1 Analysis 10.3 Wheel balancing and body alignment have to be performed by technical engineer 1 Calculation Analysis 10.4 Service engineer will check regularly for hydraulic oil, engine oil and leakage checking 1 Calculation Analysis 12.4 System capability or mode Amphi-car is able to hold the capacity of 4 persons including driver. Amphibious vehicle can speed up to 180km/h on land and 70km/h in water. There is user control switch, which will be computerised to change land and water mode. User will change from land mode to water mode once the vehicle hull touch the water and it will take less than 12 seconds to operate in water. After 12 seconds the vehicle will run with jet engine and can ride up to 70km/h as user desire. In the other hand, the vehicle will change from water mode to land mode once user switch it to and will take less than 12 seconds to drive on the road too. Functional Analysis and Allocation (FAA) 13 Scope 13.1 System Overview The purpose of this assignment is to analyse the functional design, physical design and components details of the Amphicar-II project. After assigned the needs and requirements from the previous assignment, we will continue the design process, which includes function and physical design. The purpose of the vehicle is able to operate on land and water, so that we will build the vehicle according to our requirements. 13.2 Document Overview This document includes of 4 major parts, namely scope, referenced documents, functional analysis and physical design. In the scope, we describe system overview and document overview. In the second part, referenced documents what we made. Then the main body of the documents are functional analysis design and physical design. In the functional analysis, we separate into 7 subsystems, performance, operation, design, safety, security, maintenance and personal requirements. In the physical design, we will mention physical overview and component details. 14 Referenced Documents 1. System Engineering lecture notes prepared by Mr. Bill Daniels 2. Core Tutorial taught by Mr. Bill Daniels 15 Functional Analysis 15.1 Amphicar-II System 15.1.1 Performance System 15.1.2 Operation System Design 15.1.3 Design System 15.1.4 Safety System 15.1.5 Security System 15.1.6 Maintenance System 15.1.7 Personal Requirement System 16 Physical Design 16.1 Physical Overview Amphicar II System 16.2 Component Details 16.2.1 Amphicar-II Design System As for the design system, the amphicar II mainly composed with below accessories. 16.2.1.1 Seats There will be four seats made up of high quality leather that can be used on the land and water without damages. 16.2.1.2 Hull The hull part of the vehicle is used 5052 alloy aluminum single piece in order to prevent from water leak aging and provides buoyancy in order to floating on the water. 16.2.1.3 Body The whole body of the vehicle is covered with alloy aluminum, which provides lightweight and proportional to the balance of the capacity. 16.2.1.4 Jet In order to increase the acceleration in water mode, we used compact design of Berkeley Marine Jet engine which capable in increasing speed up to 40mph (65 km/h). 16.2.1.5 Hybrid As concerns increase over global warming, we used hybrid system to develop Amphicar II. Also this system allows our V6 engine brings up speed to 62 mph (100 km/h). 16.2.2 Amphicar-II Maintenance System 16.2.2.1 Brake Brake is critical safety system of the vehicle. The brake system should be checked at every service and not to be interfered with by anybody who does not have the appropriate skill and experience. * Check disc brake and or drum shoe wear levels. * Replace front and rear pad/shoes if necessary. * Inspect brake fluid levels and check braking system components. * Road test vehicle to check that brakes are operating correctly. 16.2.2.2 Car Battery A car battery is the center of power supply for innovative car components. The battery must be check and test regularly. * Clean the battery terminals. * Measure the specific gravity with a hydrometer. * Ensure all the individual cell is in good condition. * Every 3-year replace all the batteries. 16.2.2.3 Car Body For amphicar-II, frequent hull inspections at panel seams and joints are essential. After cruising in salt or brackish water, a through hosing with fresh water for the entire hull and all exposed suspension and nautical propulsion components is required. Check and ensure that there is no corrosion, no damage, no crack at the lower part of the body the hull and upper part of the aluminum amphicar-II body. 16.2.2.4 Filter The filter for oil, fuel, cabin and air filters need to check and clean accordingly. If needed, replacement must be done immediately. Changing of car filter regular basic can have a significant impact on engine life and performance. 16.2.2.5 Gear Box Gearbox fluid protects the amphicar-II against the heat and contaminants by lubricating gears, bearings, and shafts. Every service need to be carry out as shown below, * Remove the old gearbox fluid. * Inspect check plug and drain plug. * Refill a new fluid. 16.2.2.6 Hybrid V6 Engine The amphicar-II hybrid V6 engine must be check and service regularly. * Check engine oil level, oil condition. Top up or refill the oil, if necessary. * Check automatic transmission fluid. Change after 5,0000 miles. * Check and inspect the engine coolant level. * Check the electric motors coil, rotor and all the wiring. * Check the gasoline tank. 16.2.2.7 Jet Engine Need to check and inspect the jet engine regularly before and after use. At least one a year recommends to carry out thorough diagnosis. * Check the impeller and all the axles. * Check and inspect the thrust bearing. * Check on the water seal. 16.2.2.8 Sensor All the electrical wiring and sensor, computerize pre-program sensor and alarm sensor are need to check and test regularly. 16.2.2.9 Wheels Check the tire pressure and the condition regularly, at least once a month. Check on the wheel balance and alignment. Note: Due to many components are cannot be inspected visually. It is recommend having amphicar-II inspected, check and test regularly, at least one a year, by a mechanic. 16.2.3 Amphicar-II Operational System 16.2.3.1 Hydraulic Wheels Amphicar II is using the hydraulic wheel lift method, which can be easily aligned with the vehicle to be towed without helping an operator, as well as it could not be damaged to the bumper or vehicle frame since retracting style is in an upward position. 16.2.3.2 Battery Amphicar II is equipped with the powerful 12V battery type (High quality Calcium) in order to maintain the acceleration and performance as well as can operate properly when dealing with water. 16.2.4 Personnel Requirement 16.2.4.1 GPS In order to convenient in navigation system, the vehicle had used GPS system to navigate user as well as user can be made sure that he is still on the right track and heading to the right destination. 16.2.4.2 CD/DVD Player To provide entertainment, we built in LCD DVD player prevent the user from drowsiness and keep awake while driving. 16.2.4.3 Cruise The vehicle implemented with cruise mode for user that can be loafing when Amphicar-II drives on the water. This system is fully compatible with the GPS system and it will stay on the right track after the user announced the exact location in the system. 16.2.5 Amphicar-II Safety In modern time, one of the most important aspects of the vehicles is the safety feature they contain. So our amphicar-II will be equip with safety feature as shown below. 16.2.5.1 Pre-Collision System The amphicar-II will be equipped with Pre-Collision System. This technology system sense and prepare for a collision. When a sensor signals an impending crash, the system will takes preemptive action such as pre-tensioning the seat belts, preloading the brake and aligning air bag to better protect occupants. 16.2.5.2 Brake control The amphicar-II will be equipped with Brake Control. In emergency situation, when the sensor detect panic braking, brake assist applies maximum brake boost and therefore decreases stopping distance. 16.2.5.3 Tire pressure monitor The amphicar-II will be equipped with Tire Pressure Monitor. Tire pressure-monitoring systems, which use sensor to provide information on tire inflation to a display instrument panel. It will show pressure in individual tires. 16.2.5.4 Navigation System The amphicar-II will be equipped with GPS navigation system. GPS navigation system will guide through the destination and very much safer than reading a map behind the wheel. They issue turn-by-turn guidance and will reroute if they miss a turn. 16.2.5.5 Electronic Stability Control The amphicar-II will equipped with Electronic Stability Control. Electronic stability control works by using a computer program, which can detect and effectively prevent skids. It does this by detecting loss of steering control and applying individual brakes to help keep the driver in some control of the vehicle. It can also reduce engine power until it deems that enough control has been regained. 16.2.5.6 Air Bags The amphicar-II will equipped with 4-air bags. When collision occurs, the air bag suddenly expand and stopping the heads from crashing into the steering wheel or dashboard and saved a person from serious head injuries. 16.2.5.7 Seat Belt Pretensioners The amphicar-II will be equipped with Seat Belt Pre-tensioners. Seatbelt tensioners are component of the seatbelt system, which locks the seatbelt in place during a crash. 16.2.5.8 VHF-FM Radio (S.O.S Signal) The amphicar-II will be equipped with VHF-FM Radio. This marine VHF-FM radio is the most critical pieces of safety equipment for the Amphi car. This VHF-FM radio have a new feature called digital selective calling DSC. With a press of a button, the radio sends distress alerting signal and the location to the coast guard using GPS. 16.2.5.9 Life Jacket (or) Personal Floating Device (PFD) The amphicar-II will have life jacket. There will be 4-adult and 1-child sizes life jacket in the amphicar-II, for emergency used. Children younger than 13 year old must wear a life jacket while under way. 16.2.5.10 First Aid Kit There will be first aid kit box for emergency use in the amphicar-II. 16.2.5.11 Fire Extinguisher There will be 1 Kg CO2 fire extinguisher at the back of amphicar-II. 16.2.5.12 Water Leakage Sensor Water leakage sensor will be install to monitor water leakage to the lower parts of the amphicar-II. 16.2.5.13 Over Load Detection Alarm The amphicar-II will be equipped with over load detection alarm system if the overall weight of 1900kg exceed. 16.2.5.14 Paddle The amphicar-II will be equipped with 2 paddles for emergency use , incase of engine break down. 16.2.6 Amphicar-II Security System 16.2.6.1 Motion Sensor Amphicar-II will be equipped with motion sensor. The sensor will sense the movement within the vehicle. This is perfect for amphicar-II with foldable roof. 16.2.6.2 Thumb Scanner Amphicar-II will be equipped with finger scanner to start the engine. Its can be stored up to 10-persons authorized fingerprint. 16.2.6.3 Two-Way Communication Remote These amphicar-II will come with two-way communication remote. It will provide visual or auditory confirmation of alarm status right on the key fob. 16.2.6.4 Immobilizer The amphicar-II will be equipped with engine immobilizer using transponder operation. High security code is transferred b an automated signal. Transponder tag is active only when in close proximity to the ignition switch.