Question 3 The excerpt below is about severe flooding in Thailand in 2011 that a

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Question 3 The excerpt below is about severe flooding in Thailand in 2011 that affected many industries, including car manufacturer, Toyota. Toyota profits hit by floods in Thailand 8 November 2011 Second quarter profits in 2011 for Japanese carmaker Toyota have fallen by 18.5% due to supply problems caused by the recent floods in Thailand. The company has withdrawn its profit and vehicles sales forecasts due to uncertainty over the flood impact. A Toyota spokeswoman said lost output from the Thai floods in October would be about 150,000 vehicles. Disruption to the supply of parts caused by the floods has affected production. "Supply problems caused by the floods will not be over this year", Yuuki Sakurai, chief executive of Fukoku Capital Management in Tokyo told the BBC. These cutbacks have come at a time when Toyota was starting to ramp up global production to make up for lost output after the earthquake and Tsunami in Japan in March 2011. However, Toyota Vice President Satoshi Ozawa said that although sales in Japan and the US had fallen due to these natural disasters, demand from emerging economies had made up some of the shortfall Source: http://www.bbc.com/news/business-15633051 accessed 15 Dec 2017)

Explanation / Answer

A) Contingency plans are plans created to be executed in case of emergency when usual operation is disrupt due to issue or problems. The Contingency plans should be planned in the early stage of project or operation and should be active with triggers activities. In the above case the Toyota had no contingency plan in case of disruption in operation such as floods or any natural disaster. They should have planned for contingency plans such as moving the supplier from outside Thailand in case of natural disaster in Thailand. They should have forecasted the impacts of floods on sales forecast and supplier problems

B) Some of the measures that can be taken by organization to manage contingencies are

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