What is a good reponse to this student? 1. "Outline the tangible and intangible losses as a result of the cyberattack."Tangible and Intangible Losses as a Result of the Cyberattack Tangible Losses: Lost Sales: Michael estimates that $700,000 worth of customer orders were unfillable due to the vendor website being down. Of these, only 40% (or $280,000) can potentially be filled, leading to $420,000 in lost revenue. Increased Costs: Emergency purchases from higher-priced vendors and additional shipping costs amounted to $200,000. Restoration and Analysis Labor: The labor costs associated with restoring the system and analyzing the issue were $220,000. Total Tangible Losses: $420,000 (unfillable orders) $200,000 (increased costs) $220,000 (restoration costs) Total: $840,000 Intangible Losses: Customer Trust: The company may lose customer trust due to its inability to fulfill orders, which could hurt its reputation and future sales. Vendor Relationships: Soap Shop’s reliance on a just-in-time (JIT) system and its auction-based vendor website means vendors may become less willing to participate in the auction or offer competitive prices in the future, fearing similar disruptions. Loss of Competitive Advantage: The auction-based system provides a cost-saving edge, but its vulnerability may reduce the rate of return, making the company less competitive overall. Operational Disruption: The disruption could affect internal processes, employee productivity, and the efficiency of supply chain operations. Denial of service attacks don’t just lead to direct financial losses but also harm the reputation and long-term competitiveness of a company. This demonstrates the wide-ranging effects of cyberattacks beyond immediate financial damages.
What is a good reponse to this student? 1. "Outline the tangible and intangible losses as a result of the cyberattack."Tangible and Intangible Losses as a Result of the Cyberattack Tangible Losses: Lost Sales: Michael estimates that $700,000 worth of customer orders were unfillable due to the vendor website being down. Of these, only 40% (or $280,000) can potentially be filled, leading to $420,000 in lost revenue. Increased Costs: Emergency purchases from higher-priced vendors and additional shipping costs amounted to $200,000. Restoration and Analysis Labor: The labor costs associated with restoring the system and analyzing the issue were $220,000. Total Tangible Losses: $420,000 (unfillable orders) $200,000 (increased costs) $220,000 (restoration costs) Total: $840,000 Intangible Losses: Customer Trust: The company may lose customer trust due to its inability to fulfill orders, which could hurt its reputation and future sales. Vendor Relationships: Soap Shop’s reliance on a just-in-time (JIT) system and its auction-based vendor website means vendors may become less willing to participate in the auction or offer competitive prices in the future, fearing similar disruptions. Loss of Competitive Advantage: The auction-based system provides a cost-saving edge, but its vulnerability may reduce the rate of return, making the company less competitive overall. Operational Disruption: The disruption could affect internal processes, employee productivity, and the efficiency of supply chain operations. Denial of service attacks don’t just lead to direct financial losses but also harm the reputation and long-term competitiveness of a company. This demonstrates the wide-ranging effects of cyberattacks beyond immediate financial damages.
Chapter7: Losses—deductions And Limitations
Section: Chapter Questions
Problem 45P: The Goodson Company is a chain of retail electronics stores. How much of a loss can Goodson deduct...
Related questions
Question
What is a good reponse to this student?
1. "Outline the tangible and intangible losses as a result of the cyberattack."
Tangible and Intangible Losses as a Result of the Cyberattack
Tangible Losses:
-
Lost Sales: Michael estimates that $700,000 worth of customer orders were unfillable due to the vendor website being down. Of these, only 40% (or $280,000) can potentially be filled, leading to $420,000 in lost revenue.
-
Increased Costs: Emergency purchases from higher-priced vendors and additional shipping costs amounted to $200,000.
-
Restoration and Analysis Labor: The labor costs associated with restoring the system and analyzing the issue were $220,000.
Total Tangible Losses:
- $420,000 (unfillable orders)
- $200,000 (increased costs)
- $220,000 (restoration costs)
- Total: $840,000
Intangible Losses:
- Customer Trust: The company may lose customer trust due to its inability to fulfill orders, which could hurt its reputation and future sales.
- Vendor Relationships: Soap Shop’s reliance on a just-in-time (JIT) system and its auction-based vendor website means vendors may become less willing to participate in the auction or offer competitive prices in the future, fearing similar disruptions.
- Loss of Competitive Advantage: The auction-based system provides a cost-saving edge, but its vulnerability may reduce the rate of return, making the company less competitive overall.
- Operational Disruption: The disruption could affect internal processes, employee productivity, and the efficiency of supply chain operations.
Denial of service attacks don’t just lead to direct financial losses but also harm the reputation and long-term competitiveness of a company. This demonstrates the wide-ranging effects of cyberattacks beyond immediate financial damages.
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