Strategic Cost Management - DOC - DOC

							MBA 710
Strategic Cost Management
Winter 2012
Dr. Dave Bukovinsky

COST TERMINOLOGY, CONFRONTATION STRATEGY, BALANCED SCORECARD EXERCISE

PURPOSE:
The purpose of this assignment is to determine the extent of student knowledge of the related topics and their application to real-
world situations.

REQUIREMENTS:
Each student will prepare written responses to the attached questions relating to each case. Papers should be typed, double-
spaced. Papers should not exceed eight pages. Number the question you are answering. Your responses should reflect a grasp
of the issues, be clearly and concisely expressed, and integrate readings and course material where appropriate.

1.       Profit is defined as revenues minus expenses. Therefore, companies frequently focus on reducing expenses to increase
         profits. Discuss the limitations of this approach and how it can negatively impact a company’s future.

2.       Define prevention, appraisal and failure costs. These are typically discussed in the context of quality control, but they
         can also relate to a number of other areas such as environmental management. Give an example of each type of cost
         that would be incurred in environmental management.

         a.       Which of the three types of costs is most likely the most important (not necessarily most expensive),
                  and why?
         b.       Which of the three types of costs can be the most expensive, and why?

3.       Define discretionary costs and discuss their role in creating future value for an organization. Give two specific
         examples of discretionary spending on employee-related activities that can result in greater future value for the
         organization, and describe how these activities would help to create future value.

4.       What is the difference between a leading indicator and a lagging indicator? Describe one thing you think should be a
         critical success factor for the Norwalk Division (Chadwick case), then describe two activities you think would be
         necessary to achieve that CSF. Finally, describe one leading metric for each activity and discuss why it is appropriate
         and how it can be used to influence decisions.

5.       Consider the United Way of Southeast New England case.

         a.       Discuss three implications resulting from UWSENE’s top management’s approach to the BSC
                  process.
         b.       Consider the metrics used for the financial perspective. Select two metrics you think are very
                  appropriate and implementable and discuss why. Select two other metrics and discuss why you
                  think they would not be useful or appropriate.

GRADING:
The exercise is worth 35 points (approximately 22% of possible course points). Points will be based on thoroughness and depth
of analysis, organization and clarity and conciseness of answers, spelling, grammar, etc. You may e-mail your case to me.

DUE DATE:
January 30th.