DQWEEK8 Essay Example | Topics and Well Written Essays - 750 words

DQWEEK8 - Essay Example The software requirements process will give the developers the requirements that will be required of the system that will be developed. The developers will use the blueprint of the business requirements to come up with the system. It is an important process that will determine the outcome of the system. For any system to be accepted by the users, it will have to meet the requirements and the needs of these users (Tan & Ruighaver 2005). Another important software process is that of software development. This is so because the avoidance of software bugs will help to eradicate the errors that will be met when using the software. The software development process should be undertaken using the right software tools and the right technologies. Without proper tools, there will be many deficiencies in terms of functionalities. When developing the software, the right and modern trends and technologies should be used. Technology is dynamic as it keeps changing. The right and current technology should be used. This will ensure that the resultant software product will be as recent and up to date as much as possible (Tan & Ruighaver 2005). Software improvement is yet another important software process that is important in the software processes. This process is important as it enables the organization to have the latest capabilities from the software. It enables developers to integrate the latest technologies and patch holes that have been identified in the software. Even though the technologies that were used in the initial development of the software could be obsolete, this process of software improvement will enable the software to have the latest features and have had recent technologies integrated. It is, therefore, important to have this important process while developing the software (Tan & Ruighaver 2004). The key processes that are used in the course are six. The parts that re missing are the testing of the software. The ramification of the missing parts is that sof tware testing, if not done, will bring software which might be having deficiencies. This could bring errors in the business processes. Deploying a software product without testing will introduces bugs to the business process. If the bug affects financial procedures, then a lot of money will be lost in the business (Tan & Ruighaver 2005). Another important process that has been missed is that of software analysis and design. This is an important which could bring errors if it is not undertaken. The software product that could be developed could meet the technical requirements but not in the way the users wanted it to be used. It is important to follow the needs of the users. The users will require that the software product follows the design that they anticipated. They might dismiss the whole system just because some function has not been designed in the way they wanted it to be (Tan & Ruighaver 2005). Another process that has not been mentioned is that maintenance and repair. If the software product is not well maintained, then there will be a lot of problems that will be met by users. It will bring a lot of problems to the software users. To improve the process, there will be the need to ensure that the requirements of the users are followed to the latter (Tan & Ruighaver 2004). Question 2 Timing issues are an important component that should be considered when implementing a real-time system. Timing will affect many processes in the whole business process if timing is not effectively undertaken.

Metallgesellschaft Case Study Example | Topics and Well Written Essays - 1000 words

Metallgesellschaft - Case Study Example MGRM's Supervisory Board avoided bankruptcy by liquidating its forward delivery positions in December 1993. MGRM had begun to experience significant growth since 1989 when it acquired 49% stake in Caste Energy as part of its efforts to become a fully integrated oil business in the United States. As MGRM continued to make a series of costly expansions, its fixed-assets values tripled between 1989 and 1991. In a continuing effort to expand its US business, MGRM entered in to forward delivery contracts with Energy end-users at historic low prices during the summer of 1993. However, these contracts exposed MGRM to the risk of rising energy prices. To hedge this price risk, MGRM acquired energy futures at NYMEX and entered into OTC swaps with large OTC swap dealers. However, since future markets do not trade in very long term (10 years in this case), MGRM's strategy was to concentrate its derivatives positions in stacks or short-dated futures. Similarly the swaps had to be rolled forward continuously. MGRM's strategy exposed it to various risks. Its short-dated positions left it exposed to rollover risk. If the prices had risen, MGRM would have made substantial profits. And the opposite was true in case of the prices falling. However historically, energy prices have always shown an upward trend. Over a period of ten years prior to 1993, the energy market had been predominantly in backwardation. MGRM was betting on Energy prices continuing to rise. However, as shown by Edwards and Canter, its rollover risk was only about 15% of its price risk. Had the market been in backwardation, MGRM would have made handsome profits. But in 1993, crude oil was in contango every month, heating oil was in contango every month except March and April and gasoline was in contango every month except August. As a result, MGRM made substantial rollover losses during 1993. MGRM was also exposed to funding risk since its strategy was that of one-to-one hedge instead of a "minimum variance" hedge. This strategy would have worked had there been a one-to-one relationship between forward and spot energy prices. In that case, a fall in the spot prices would have been balanced by an equal and opposite change in the value of its forward delivery contracts. However, as shown by Edwards and Canter, a one-to-one relationship between spot and forward prices does not exist in the energy market. MGRM was also exposed to credit risk due to the long duration of its forward-supply contracts. And once the prices started to fall, this risk further increased as with the increased disparity in spot and contractually fixed price, the risk of the smaller firms defaulting also increased. Finally, MGRM was also exposed to basis risk due to the one-to-one hedge ratio. The timing of the investment in derivatives also went against MGRM. As stated above, 1993 proved to be disastrous year with energy market in contango for most part of the year. The huge size of MGRM's rollover trade was also responsible for increasing these risks. MGRM's huge holdings, equivalent to 160 million barrels, meant that other firms would have looked at MGRM before taking any steps. The size of MGRM's rollover trade could have also been indirectly responsible for pushing down energy prices. Hedging or Speculating There is some debate over whether MGRM's strategy was hedging or speculation. Culp and