SSO Cost & Pricing Analysis 3 â Questions and Answers
Question 1: A port facility charges $500 per ship call for security screening. If a vessel makes 24 port calls annually, what is the annual security screening cost?
- $10,000
- $12,000 (Correct answer)
- $14,400
- $6,000
Correct answer: $12,000
$500 Ă 24 port calls = $12,000 annual security screening cost.
Question 2: When performing a cost-benefit analysis for an access control system, which benefit category is hardest to quantify?
- Equipment purchase cost savings
- Deterrence effect on security incidents (Correct answer)
- Labor hours saved per watch
- Reduction in insurance premiums
Correct answer: Deterrence effect on security incidents
The deterrence effectâincidents that did not occur because of the systemâis inherently difficult to measure since it involves hypothetical prevented losses.
Question 3: An SSO compares two alarm systems: System A costs $8,000 upfront with $500/year maintenance; System B costs $3,000 upfront with $1,500/year maintenance. After how many years does System A become more cost-effective?
- 3 years
- 4 years
- 5 years (Correct answer)
- 6 years
Correct answer: 5 years
The crossover point occurs when 8,000 + 500x = 3,000 + 1,500x, solving to x = 5 years.
Question 4: Which document is the primary reference for establishing security-related budget line items in a Ship Security Plan?
- ISM Code Chapter 3
- ISPS Code Part A, Section 9 (Correct answer)
- SOLAS Chapter II-1
- IMO Resolution A.741(18)
Correct answer: ISPS Code Part A, Section 9
ISPS Code Part A, Section 9 specifies the required contents of the Ship Security Plan, which frames the budgetary scope for security measures.
Question 5: A company negotiates a 15% discount on bulk purchase of security equipment costing $20,000 at list price. What is the discounted purchase price?
- $16,000
- $17,000 (Correct answer)
- $15,000
- $18,500
Correct answer: $17,000
$20,000 Ă (1 â 0.15) = $20,000 Ă 0.85 = $17,000.
Question 6: In the context of ship security budgeting, what does 'life-cycle costing' primarily consider?
- Only the initial purchase price of equipment
- Total costs from acquisition through disposal over the equipment's useful life (Correct answer)
- Annual depreciation for accounting purposes
- The vendor's warranty period only
Correct answer: Total costs from acquisition through disposal over the equipment's useful life
Life-cycle costing encompasses all costsâacquisition, operation, maintenance, and disposalâacross the full useful life of an asset.
Question 7: Which method is most appropriate for forecasting security training costs for the next fiscal year when historical data is available for the past five years?
- Random sampling
- Trend analysis using historical data (Correct answer)
- Benchmarking against competitor firms
- Zero-based budgeting without reference to history
Correct answer: Trend analysis using historical data
Trend analysis of multi-year historical data provides a statistically grounded forecast baseline, making it the most reliable method when past data is available.
SSO Cost & Pricing Analysis 3
A port facility charges $500 per ship call for security screening.
If a vessel makes 24 port calls annually, what is the annual security screening cost?