Discussion Board #3

A contingency budget is important for all business to have in the case that there are any unexpected circumstances that they come across. It is to make sure that the business takes the right steps so that they will be covered. Having a contingency budget is about being proactive and planning ahead, rather than reacting to an unplanned situation and ensuring that there is flexibility within the planning process to allow for unforeseen circumstances (Contingency Plans, n.d.).
In good times or bad, a contingency plan can provide a path to help weather downturns, manage risks and seize opportunities (Fry, 2013). An example of an event or problem that could occur that a contingency plan is needed is if employees decide to go on a strike. This could cause great harm to a business so it is imperative that they are still able to meet the business demand and still be profitable. They could hire temporary workers and lower the usual production amount.
Another event that could occur is a natural disaster that could cause millions of dollars in damage due to the physical damage but also the interruption in business. In a situation for a manufacturing company that want to make sure not only that their employees are safe but also that their customers are satisfied. They should have plans of how long it would take to remake the factory if needed. It needs to be determined how long it would take to produce at certain levels, which will provide them with a time frame (Keenan, 2006). They also should take into consideration the possibly of outsourcing or having production done at another factory location. It is also to evaluates and identifies suppliers that can meet the company's requirements and quality standards in case of a disruption, also look at IT issues and practices if restoring data in necessary (Keenan, 2006).
Contingency Plans. (n.d.). Retrieved from https://www.dlsweb.rmit.edu.au/toolbox/leadership/toolbox/mis/mis_c10.html