In December 2016, Hactive Sdn. Bhd. had purchased the exclusive rights to operate a Ferry Service in Penang (car and passenger ferry route) until December 2021. This offers an alternative to driving an additional 10km via the nearest bridge crossing. There have been several ambitious plans to build another tunnel crossing, but they have all failed through lack of public support and government funds.

Hactive Sdn. Bhd. had refurbished two 10-year-old roll-on, roll off ('Ro-Ro') ferries to service the route. Periodic engine overhauls are expected to put the ferries out of commission for several days in every six months. If the engine overhauls were not carried out, fuel consumption is likely to be higher as the engines will be less efficient. Each ferry makes three return crossings every day of the year, subject to weather conditions, and has the capacity to carry approximately 300 passengers and 30 vehicles. The ferry service carried 80,000 vehicles in year 2019. (2018: 58,000 vehicles; 2017: 47,000 vehicles).

Hot and cold refreshments and travel booking facilities are offered on the ferries during the one-hour crossing. These services are provided to the passengers by independent businesses operators on a franchise basis from Hactive Sdn. Bhd. Passenger responses received have shown that passengers were generally least satisfied with the quality of the food provided on the ferries. Hactive Sdn Bhd employs 50 full time crew members who are trained in daily operations and customer service, as well as passenger safety in the event of personal accidents, collisions, or breakdowns. The management of Hactive Sdn. Bhd. is planning to add a "Round Island Tour Ferry Service" in the year 2021 to fully utilise the operation hours of the ferries.

Required:

The chief executive officer of Hactive Sdn. Bhd has asked you to assist the risk manager who was hired recently to:

(a)Evaluate FOUR (4) types of business risks that are faced by Hactive Sdn. Bhd. in the above ferry service operations.(10 marks)

(b)Recommend how the risks identified in part (a) above could be managed and maintained at an acceptable level by Hactive Sdn. Bhd.(10 marks)

(c)The management of Hactive Sdn. Bhd. is planning to add a "Round Island Tour Ferry Service" in the year 2021.

Evaluate FOUR (4) types of risk related to the above proposed service that the company will be facing.(10 marks)

Recommend FOUR (4) measures of operational performance that are available to provide assurance on Hactive Sdn. Bhd's business.