Teacher Materials

1. SkimaTalk Official Course
Advanced Improvisation – Business Problems
Lesson 4: Should We Build a New Warehouse?

2. Story: Should We Build a new Warehouse?
2
XYZ Industries is considering building a new warehouse close to its top customer. The new
warehouse will be profitable for XYZ as long as gasoline prices in the U.S. remain above the
historic average of $3 per gallon. Economists are confident that gasoline prices will be well
above $3 per gallon in the long term, so the project is expected to be profitable.
Time
Price /
gallon
$1
$2
$3
$4
$5
Expected gas price
Break even gas price
Projected Profit
Teacher Instructions:
Ask the student to read the story out loud, then discuss the questions on the next page.

3. Task 1
3
1. What do you think are the top risks to the success of the warehouse?
2. In addition to generating a profit, what are some other potential
advantages of the new warehouse?
3. Do you think it makes sense to build the warehouse? Why or why not?
4. Is there any additional information that would help you decide whether
or not to build the warehouse?
Questions
Teacher version only
Teacher Guide: (if the student struggles with the answers)
Q1. lower gasoline prices
Q2. faster shipping, improve customer satisfaction

4. Task 2
4
Additional Information:
Recently, it has come to your attention that your top customer is not very happy with
XYZ Industries, and is exploring other suppliers. The primary areas of dissatisfaction are
product delivery times and delivery costs.
Teacher version only
Follow-up Questions
1. Based on this new information, what are top risks to the success of the
warehouse?
2. Do you think the warehouse can help solve the customer’s concerns?
3. Would you build the warehouse?
Teacher Instructions:
1. Tell the student that you are going to reveal some additional information for the story.
2. Read the additional information to the student.
Q1. Unhappy customer stops buying XYZ products, and the warehouse loses money.

5. Task 3
5
Teacher version only
When evaluating investment projects, it is important to consider ALL of the potential risks
involved. Sometimes, the biggest risks are not always the most obvious. In this lesson we saw
that the biggest risk was actually not the price of gasoline as first believed, but rather the
customer’s low satisfaction with XZY Industries.
1. What are some potential strategies to ensure you are considering all of the risks involved
in a project?
2. Can you think of a time in your career where you didn’t fully consider all of the risks
involved in a project?
Discussion
Teacher Instructions:
1. Read the first paragraph and then discuss the questions.
Q1 Examples:
• Brainstorm the risks with lots of team members.
• List all of the assumptions you are making when evaluating a decision (for example, XYZ
assumed the customer wouldn’t leave).
• Ask yourself what could go wrong in a worst case scenario.

6. 6
End of Lesson
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