Sales Territory Business Plan by rzl21321

VIEWS: 882 PAGES: 31

More Info
									CHAPTER 1—Solutions
THE CHANGING BUSINESS ENVIRONMENT:
s

Chapter 1, SE 1.

1.   FA
2.   MA
3.   MA
4.   FA
5.   FA
6.   MA
7.   MA
8.   MA


Chapter 1, SE 2.

1.   Q
2.   Q
3.   C
4.   Q
5.   C
6.   C
7.   Q
8.   Q
9.   C


Chapter 1, SE 3.

1.   C
2.   PE
3.   PL
4.   PE
5.   E
6.   PL


Chapter 1, SE 4.

Rick Caputo should first make sure he understands exactly why the president is
concerned about the costs of electricity. Next he should determine exactly what
information he needs from each division. He already knows who the report is in-
tended for—the president—but he still needs to ask her when the report is due.



                                                Ch1 SE1 to SE4
Chapter 1, SE 5.

1.   SS
2.   PP
3.   SC
4.   SS
5.   PP
6.   SC


Chapter 1, SE 6.
Primary processes:
    Research and development                                       $1.40
     Design                                                          0.15
     Supply                                                          1.10
     Production                                                      4.00
     Marketing                                                       0.80
     Distribution                                                    0.90
     Customer service                                                0.65
     Total cost per unit                                           $9.00

Support services:
     Human resources                                               $1.45
     Legal services                                                  0.50
     Information systems                                             0.85
     Management accounting                                           0.20
     Total cost per unit                                           $3.00


Chapter 1, SE 7.

The solution to this exercise will depend on the resource the student has chosen
to analyze. The following is a sample discussion of labor time:

Labor time is wasted when it is not being used to produce a product or provide a
service. Illness, absenteeism, poorly coordinated production processes, machine
breakdowns, poor-quality materials and parts that cause work stoppages, and
product changes all waste labor time. Such problems can be reduced or elimi-
nated by determining their causes. Why was the employee absent? Why did the
machine break down? Why did the vendor deliver poor-quality materials and
parts? If management continuously tracks these areas and looks for areas to im-
prove, labor waste will decrease.




                                              Ch1 SE5 to SE7
Chapter 1, SE 9

1.   L
2.   P, C
3.  C
4.  F
5.  L
6.  P
Chapter 1, SE 10.

Topher Sones may be disclosing confidential information to a person employed by
a competitor; therefore, he is not adhering to the ethical standards of manage-
ment accountants.




                                             Ch1 SE8 to SE10
Chapter 1, E 1.

The statement is true. Several parts of a management accountant's work, such
as product costing and pricing analyses, feed directly into the financial account-
ing system. Because the two fields are interrelated, management accountants
and financial accountants must work closely together. Budget data must be com-
patible with the organization's records or data accumulation system so that pro-
jected and actual operating results can be compared and differences can be
analyzed. Reports to outsiders, although usually audited or reviewed by outside
public accountants, are created by and are the responsibility of the organiza-
tion's financial accountant. Tax aspects of the organization affect management
accounting as well as financial accounting projects and analyses. Therefore, it
is impossible to distinguish where financial accounting ends and management
accounting begins.

Chapter 1, E 2.
Management accountants now act as business partners in management decision
making, which is a broader role than the one defined in the previous definition.

Chapter 1, E 3.

1.   PE                                          6.    C
2.   E                                           7.    PE
3.   PL                                          8.    PL
4.   C                                           9.    C
5.   PL                                        10.     PE




                                               Ch1 E1 to E3
Chapter 1, E 4.

Jefferson did a poor job of preparing a management accounting report because
he didn't use the four w' s as guidelines. He should have asked himself the fol-
lowing questions:

"Why was the report being prepared?" The strategic planning team was having a
meeting to plan next year's operating activities. The purpose of the report was
to review the success of the new birthday card line so that the team could de-
cide if changes in selling price or strategies to stimulate sales volume in specific
sales territories were needed. Clearly, Johnson either did not understand the
purpose of the report or refused to address it for some reason.

"What information was needed in the report?" At a minimum, Jefferson should
have prepared an income statement for each sales territory, showing the sales
and operating activities for the humorous birthday card line. Additional informa-
tion about the selling prices of cards from competitors and an analysis of the
new line's successes and failures would have been beneficial. Jefferson provided
none of this information. Written comments from a few sales representatives
about general topics do not satisfy the purpose of the report.

"To whom would the report be distributed?" The report was prepared for mem-
bers of the strategic planning team. Given the nature of his audience, Jefferson
needed to prepare a concise summary of quantitative and qualitative information.
He did not.

"When was the report due?" The report was due on August 31. Jefferson pro-
vided a memo on a timely basis, but it was inadequate. Often, time constraints
can cause a report to be briefer or less thorough than its writer or recipient
 would like. However, the inadequacy of Jefferson's report is due to factors other
than timing.


Chapter 1, E 5.

The UPS website on solutions provides a variety of case studies on how UPS has
solved supply-chain problems for client companies like Fujitsu Technology Solu-
tions, Honeywell, Nikon, SGI, TeddyCrafters, Kingsdown, GM,
National Semiconductor, Intermec Technologies Corporation, IBM, Welch Allyn,
Wrigley, Cisco Systems, and Canadian Pharmaceutical Distribution Network.




                                                Ch1 E4 & E5
Chapter 1, E 6.
    1. Budget
    2. Goal
    3. Operating objectives
     4.   Mission
     5.   Business plan
     6.   Strategic objectives
     7.   Tactical objectives


Chapter 1, E 7.

     1.   Management accounting
     2.   Human resources
     3.   Design
     4.   Production
     5.   Legal services
     6.   Supply
     7.   Distribution
     8.   Research and development
     9.   Customer service
     10. Information systems
     11. Marketing

Candidates for outsourcing: Actions 1, 2, 5, and 10 are the most likely candidates
because they are support services. The other activities are primary processes. As
this is a new company, its efforts are best focused on the activities that make up
the value chain.




                                              Ch1 E6, to E7
Chapter 1, E 8.

1. S
2. V
3. V
4. V
5. S
6. S


Chapter 1, E 9.


The report on the left is the financial report because it is organized by costs. The one on the right is
ABM because it is organized by activities. Even though the total costs are the same, the reports differ
because ABM focuses on reducing or eliminating nonvalue-adding activities, not costs.




                                                Ch1 E8 to E9
Chapter 1, E 10.

       Primary processes:
             Research and development               $5.00
             Design                                  1.50
             Supply                                  1.00
             Production                              4.50
             Marketing                               2.00
             Distribution                            2.50
             Customer service                        6.50
             Total cost per unit                    $23.00

       Support services:
             Human resources                        $4.50
             Legal services                          0.50
             Information systems                     1.80
             Management accounting                   0.20
             Total cost per unit                    $7.00



Chapter 1, E 11.


Manager 1:               ABM
Manager 2:               JIT




                                  Ch1 E10 to E 11
Chapter 1, E12.
Financial perspective: 3, 5
Learning and growth perspective: 4, 7
Internal business processes perspective: 1, 6
Customer perspective: 2, 8

Chapter 1, E 13.
1. d
2. a
3. b
4. c




                                      Ch1 E12 to E13
Chapter 1, E 14.

Katrina Storm is in a delicate situation. The ethical issue is one of professional
competence. Her boss is violating the ethical standard that requires manage-
ment accountants to maintain an appropriate level of professional competence
through ongoing development of their knowledge and skills.

Storm has two choices. She can either (1) approach Vickery Howe and urge her to re-
consider her thoughts and actions regarding professional development or (2) re-
port her actions to someone higher in the organization. Since Howe's actions
can affect the financial outcome of company activities, Storm is ethically obligated
to do something about the situation. Howe's actions constitute employee theft
of services because she is receiving a salary and travel, lodging, and meal ex-
penses for personal pleasure instead of work-related activity. As is the case with
so many ethical dilemmas, there is no easy solution for Storm. If Howe does not
remain competent, management should be informed.



Chapter 1, E 15.

Depending on the company selected, each student's description will vary. For
example, some companies, such as Lockheed Martin, state their ethical principles
on their website (www.lockheedmartin.com). The Lockeed Martin principles ar-
ticulate the company's commitment to honesty, integrity, responsibility, trust,
respect, and citizenship. Other companies, such as Nokia, not only have a code
of conduct but also provide information about the environmental attributes of
its products and how it is being a good corporate neighbor wherever it
does business. Students' conclusions about corporate ethical conduct should be
supported by their findings.




                                                Ch1 E14 to E15
Chapter 1, P 1.

1.   Types of needed information identified

Henry will need information about the market demand for the pants broken
down by region. An analysis of sales growth over the past three years would be
useful for this purpose. Also needed is an analysis of the growth potential of the
entire industry. Information about production cost per unit and selling expenses
per unit would be needed to ensure that adequate cash is on hand. Henry
would need to know if the increased production will require new equipment or
will wear out the old machinery more quickly than originally estimated. Finally,
Henry would need information about Clothing Industries' ability to get financing
and the feasible sources of that financing.


2.   The four w' s considered:

 a. Why prepare the report?
     The report is prepared to analyze sales growth over the past three years to
     determine the ability of Clothing Industries to sell an increased quantity of
     pants and the areas of the country in which to sell those pants.

 b. What information should the report contain to meet its purpose?
     The report should contain sales information for the last three years broken
     down by the area covered by each sales representative. The percentage of
     change from year to year for the area covered by each representative should
     be calculated.

 c. For whom is the report being prepared? To whom should the report be dis-
    tributed? Who will read the report?
     The report is most likely being prepared for the president, Jefferson Henry,
     and for the vice president of marketing, since they will be the ones deciding if
     a larger market for the company's product exists.

 d. When is the report due?
     When the report is needed depends greatly on the volatility of the market and
     the aggressiveness of the competition. The president and vice president
     need the information before they can make any decisions, so the report needs
     to be completed early in the planning process.




                                                 Ch1 P1
Chapter 1, P 1. (Continued)

3.        Report format designed

                                                           Clothing Industries, Inc.
                                                          Sami Pants Sales Analysis
                                                        For the Years 2010, 2011, 2012
                                              2010                                        2011                         2012
                                             Percent                                     Percent                      Percent
                                             of Total       Percent                      of Total   Percent           of Total   Percent
              Sales Representative   Sales    Sales         Growth         Sales          Sales     Growth    Sales    Sales     Growth
     1.
     2.
     3.
     4.
     5.
     6.
     7.
     8.
     9.
 10.
Chapter 1, P 2.

1.   Projected cost per unit computed

                                                         Current     Percentage
                                                          Cost       (Decrease)       Projected Cost
                                                         per Unit     Increase           per Unit
Research and development*                                $ 2.50         (0.10)              2.25
Design                                                      3.50        (0.10)              3.15
Supply                                                      4.50        (0.15)              3.83
Production                                                  6.70        (0.20)              5.36
Marketing                                                   8.00        (0.35)              5.20
Distribution                                                1.90        (0.10)              1.71
Customer service                                            0.50        0.50                0.75
Total                                                    $27.60                          $22.25

*Computation: $2.50 x (100% - 10%) = $2.25
2.   Manager insight: Results discussed.

Management has not met its goal of reducing projected cost per unit to $20. Re-
search and development and design are still a significant portion of the costs.
Management should try to reduce these costs per unit further by rethinking both
processes. The most difficult cost reduction to achieve would seem to be the re-
duction in marketing costs. Telecom companies, in general, are in a very difficult,
competitive environment and likely would not be able to afford to take over a sig-
nificant part of the marketing costs. Further, the telecom companies can go to
other cell phone companies. This marketing strategy could backfire.
The other proposed cost reductions are more under the control of management
and do not require such a sacrifice on the part of the customer.


3.   Manager insight: Support services identified and discussed.

The support services are human resources, legal services, information systems,
and management accounting. The analysis thus far has not mentioned these ser-
vices, which are necessary but do not provide value to the final product. Man-
agement should analyze these functions carefully to see if they can be reduced.
If they can be reduced, it may not be necessary to reduce the primary process
cost per unit as much as proposed.




                                                Ch1 P2
Chapter 1, P 3.

1. The ways in which MPC accomplished each of the primary processes in the value
chain are as follows:

Research and development: The company is known for developing innovative
and high-quality products. Its latest product is an extremely thin, tough, and non-
porous disposable glove.

Design: The glove comes in white or is transparent.

Supply: The glove is made out of a material that another company manufactures
according to MPC's exact specifications and quality standards.

Production: Gloves are manufactured in the company's plant. They will not split
or leak.

Marketing: The company informs potential buyers by advertising in professional
journals and providing free samples to physicians and dentists.

Distribution: The agents inform the company of orders, which are then shipped
by the company.

Customer service: Following up with postsale service or warranty service. For
example, MPC provides a free replacement for any glove that does not satisfy
the customer and uses questionnaires to measure customer satisfaction.

2. A core competency is what the company does best. It is what gives the company
an advantage over competitors. The one area in which MPC excels is research
and development. It develops high-quality gloves that are extremely
thin, tough, and nonporous, making them very safe and extremely well fitted for
very detailed handling. These traits are highly valued in the medical profession,
which gives the company an advantage over competitors. In the other parts of
the value chain, MPC is apparently similar to other companies.




                                                 Ch1 P3
Chapter 1, P 4.

1. Balanced scorecard prepared

Mission
To provide high-quality, innovative risk-protection services to individuals and
businesses

Financial Perspective
Objective:
     • To provide a sufficient return on investment by increasing sales and main-
       taining the liquidity needed to support operations
Performance measures:
     • Growth in revenues for each type of insurance
     • Cash flow
     • Return on assets

Learning and Growth Perspective
Objective:
     • To add value to the agency's services by training employees to be knowl-
       edgeable and competent
Performance measures:
     • Number of new ideas for customer insurance
     • Number of dollars spent on training
     • Percentage of employees who complete 40 hours of training during the year

Internal Business Processes Perspective
Objective:
     • To operate an efficient and cost-effective support system for customer
       agents
Performance measures:
     • Average time for processing insurance applications
     • Average time for processing claims
     • Percentage of revenue devoted to office support system (information sys-
       tems, accounting, orders, and claims processing)

Customer Perspective
Objective:
     • To retain customers and attract new customers
Performance measures:
     • Percentage of customers who rate services as excellent
     • Percentage of new customer leads that result in sales
     • Number of customer complaints
     • Percentage of customers who renew policies



                                                    Ch1 P4
Chapter 1, P 4. (Continued)


Manager insight: Benchmarking discussed.

Benchmarking is a technique for determining a company's competitive advantage
by comparing its performance with that of its best competitors. Benchmarks are
measures of best practice in the industry. Referring to industry statistics can help
Howski in at least two ways:
 • The industry statistics may provide other key performance measures in addition
   to the ones already identified.
 • The industry statistics will provide a basis for Howski in determining bench-
   marks against which to measure the company's performance.




                                                Ch1 P4 (2)
Chapter 1, P 5.

1.   Taylor Zimmer is facing an issue of integrity, not one of confidentiality. Two ethical
     standards come into play:
       Refuse any gift, favor, or hospitality that would influence or would appear to
       influence your actions.
       Communicate unfavorable as well as favorable information and professional
       judgments or opinions.
2.   Zimmer is ethically bound to report the write-off of the obsolete inventory in the
     year that the inventory became worthless. He should make this decision and
     support it with both professional and ethical reasoning. Since his boss is also an
     accountant, the same ethical standards apply to his work and judgment. Under
     no circumstances should the obsolete inventory be reported in a subsequent
     accounting period.
(Note that other standards of integrity can also be brought into the discussion of
this case.)




                                                    Ch1 P5
Chapter 1, P 6.

1.    Types of needed information identified.

Generally speaking, Daisy Flowers will need information about the feasibility of the lawn
and garden center, the best way to build the center, the characteristics of alterna-
tive locations, the revenues that can be generated from the center, the cost of build-
ing and running the center, the projected costs of staffing the center, and the avail-
ability of financing if it is needed. Flowers should also consider the possible negative
impact on future sales to current retailers because the proposed wholesaler-owned
retail store would be competing with the wholesaler's current retail customers.


2.    The four w' s considered.

 a.   Why prepare the report?
      The report is prepared to analyze various locations that have favorable climate
      and soil conditions for the plant and tree nursery that will be part of the retail
      lawn and garden center.

 b.   What information should be included in the report?
      The report should include information about the plants and trees to be grown
      at the nursery, the locations under consideration, and the suitability of the cli-
      mate and soil in each location for the plants and trees to be grown.

 c.   For whom is the report being prepared? Who will read the report?
      The report will be prepared primarily for Flowers. If Flowers is knowledgeable
      about the technical side of her business, the vice president of research and de-
      velopment may prepare a more technical report. Although the report is pre-
      pared for Flowers, the other vice presidents may be interested in seeing a copy.
      They may be able to give additional information that will influence the choice of
      location.

 d.   When is the report due?
      Flowers probably has a timetable for the steps that must be taken to build the cen-
      ter. The analysis of plants, trees, and locations would be due early in the project
      because a suitable location must be found before other decisions can be made.




                                                        Ch1 P6
Chapter 1, P 6. (Continued)

3.   Report format designed.

                                         Yardworks, Inc.
                  Summary of Plants and Trees for Retail Lawn and Garden Center
                                      Analysis by Location
                                            —Date—
Location             Boston, Massachusetts
                                     Climate                               Soil
Plant/Tree              Good           Bad           Reason     Good       Bad     Reason
Live Oak                                X            Too cold               X     Too rocky




(List continues with other possible plants and trees.)
(Similar analyses for each location would follow.)




                                               Ch1 P6 (2)
Chapter 1, P7.
    1.
                                                   Current        Percentage   Projected
                                                    Cost          (Decrease)     Cost
                                                   per Unit        Increase     per Unit
       Primary processes:
              Research and development            $ 5.00            (0.20)       $4.00
              Design                              $    3.00         (0.20)       $2.40
              Supply                              $    4.00         (0.15)       $3.40
              Production                          $ 16.00           (0.40)       $9.60
              Marketing                           $    6.00         (0.25)       $4.50
              Distribution                        $    7.00         (0.10)       $6.30
              Customer service                    $    1.00         0.20         $1.20
              Total cost per unit                   $42.00                      $31.40

       Support services:
             Human resources                      $        2.00     (0.20)       $1.60
             Information services                 $        5.00     (0.20)       $4.00
             Management accounting                $        1.00     (0.20)       $0.80
             Total cost per unit                        $8.00                    $6.40

    2. Manager insight: Results discussed.
       Management has met its goal of reducing primary process unit costs below $32.00.
        Production and distribution are still a significant portion of the costs and
       management may still be able to reduce them with additional analysis.
        The outsourcing of support services does not reduce these costs to $5.00 or or less.
       Management may be able to lower these costs further by analyzing which support
       service tasks are essential to the business and eliminating the rest. Management
       then must determine the cost of keeping these remaining support services in house
       and compare the cost to revised bids for outsourcing only the most essential
       support services.

    3. Support service functions should be analyzed carefully to reduce them as much as possible.




                                               Ch1 P7
Chapter 1, P 8.

1. The ways in which SPC accomplished each of the primary processes in the value
chain are as follows:

Research and development: The company is known for developing innovative
and high-quality products. Its latest product is a tough, all-weather, and
very agile shoe.

Design: The shoes come in white or black.

Supply: The shoes are made out of a material that another company manufactures
according to SPC's exact specifications and quality standards.

Production: Shoes are manufactured in the company's plant. They will not split
or leak.

Marketing: The company informs potential buyers by advertising in sports
magazines and providing free samples to well-known lacrosse players.

Distribution: Distributors inform the company of orders, which are then shipped
by the company.

Customer service: Following up with postsale service or warranty service. For
example, SPC provides a free replacement for shoes that do not satisfy
the customer and uses questionnaires to measure customer satisfaction.

2. A core competency is what the company does best. It is what gives the company
an advantage over competitors. The one area in which SPC excels is research
and development. It develops high-quality patented shoes that are extremely
tough, all-weather, and very agile. These traits are highly valued by players,
which gives the company an advantage over competitors. In the other parts of
the value chain, SPC is apparently similar to other companies.




                                          Ch 1 P8
Chapter 1, P 9.

1. Balanced scorecard prepared

Mission
To provide high-quality courses and degrees to individuals
to add value to their lives

Financial Perspective
Objective:
    • To provide a sufficient return on investment by increasing tuition revenues
      and maintaining the liquidity needed to support operations
Performance measures:
    • Growth in revenues for each department
    • Cash flow
    • Return on assets

Learning and Growth Perspective
Objective:
    • To add value to the college's courses by encouraging faculty
      to be lifelong learners
Performance measures:
    • Number of faculty publications
    • Number of dollars spent on professional development
    • Percentage of faculty who annually do 40 hours of professional development

Internal Business Processes Perspective
Objective:
    • To operate efficient and cost-effective student support systems
Performance measures:
    • Average time for processing student applications
    • Average time for processing transcript requests
    • Percentage of revenue devoted to student services systems (registrar,
      computer services, financial aid, and student health)

Customer Perspective
Objective:
    • To retain students and attract new students
Performance measures:
    • Percentage of students who rate college as excellent
    • Percentage of new student leads that result in enrollment
    • Number of student complaints
    • Percentage of returning students


                                                    Ch1 P9
Chapter 1, P 10.


   1. It would be wrong for Hanley and Obbo to keep quiet about the matter. They
      too might have an opportunity for promotion, and recognition of their suc-
      cessful suggestions would be to their advantage. In addition, Knightly has com-
      mitted an unethical act and should not be considered for any future mana-
      gerial position. He is dishonest and has put his own gain ahead of the inter-
      ests of his subordinates and the company. If Knightly refuses to disclose his
      fraudulent act, Hanley and Obbo should take the matter to Knightly's superior.

   2. Knightly has committed an unethical act and should have agreed to explain the
      situation to the vice president of production. He should have identified Hanley
      and Obbo as the authors of the suggestions and turned back the bonus for
      distribution to them.




                                           Ch1 P10
Chapter 1, C 1.

1.    The contents of the description will vary depending on the nature of the or-
      ganization and the student's ability to summarize. Specific grading criteria
      may be set for content, organization, clarity, grammar, and spelling.
2.    In general, students should find that the financial statements provide infor-
      mation for items 1, 2, and 3. The remaining items require information that is
      not available to external users. Much of the information available to manage-
      ment cannot be found in external financial statements because it either is in-
      cluded in consolidated form or is confidential. This emphasizes the fact that
      many decisions made by management involve information that is not accumu-
      lated and reported in financial accounting systems.
3.    The disclosure notes accompanying the financial statements may provide
      very limited information for items 4, 5, and 6. The remaining items require in-
      formation generated internally for management purposes only. In addition,
      the president's letter to the stockholders or other information contained in
      the annual report may provide limited information for items 1, 2, 3, 4, 5, 6,
      and 8. Discussions of specific divisions' activity are generally not provided
      to external users.
 4.   Students' responses will vary. Probably students will find very little addi-
      tional information they would be interested in knowing. Some of the informa-
      tion may be of general interest but would have no direct impact on their man-
      agement responsibilities for the division. In some cases, students will find
      no additional information.




                                           Ch1 C1
Chapter 1, C 2.

1.   Information about competition would include:
     Products or services currently being sold
     Selling price of each product or service
     Sales volume of each product or service
     Research and development activities for future products
     Materials and processes used to manufacture products
     Types of customers buying the products or services
     Sales territories
     Volume of sales by sales territory
     Profitability of operations
     Financial leverage
     Liquidity
     Sales and credit policies
     Advertising and marketing activities
     Responses to social issues
     Responses to environmental issues
     Methods of distributing products or services to customers
     Types of packaging used to distribute products

2.   The information is relevant for making a variety of decisions, including the
     following:
     Determining a new selling price
     Identifying changes in materials or processes to improve quality and reduce
        costs
     Redesigning marketing activities to compete better in selected sales
        territories
     Reexamining credit policies to stimulate sales activity or improve cash
        position
     Considering alternative financing activities
     Examining capital budgeting opportunities
     Considering alternative advertising campaigns
     Developing environmentally safe products and packaging

3.   Information can be obtained in a number of ways, such as:
     Talking to organizations that buy the competitors' products or services
     Reviewing trade and business journal articles
     Observing advertising and marketing activities
     Examining the products sold by the competition
     Talking to vendors of competitors

4.   This information is critical and would be needed immediately.
     There should also be a network in place that continuously accumulates in-
        formation about competitors.



                                                      Ch1 C2
Chapter 1, C 2. (Continued)

5.   Students' solutions will vary. The important thing is that they focus on pre-
     paring a report with a specific purpose. Differences in student report forms
     and content will lead to a very interesting class discussion. You may also
     want to poll the class about such things as the proper name of the report and
     the frequency of preparation.




                                               Ch1 C2 (2)
Chapter 1, C 3.

                   For Students                           For Instructors
 1.   a.   Who?    Student                                Instructor
      b.   Why?    To provide feedback on per-            To provide a formal record of
                     formance in several courses            the performance of students
                     for a period of time                   in each course for a period of
                                                            time
      c.   What?   Student's name                         Students' names
                   Student's identification number        Students' identification numbers
                   Name of college                        Name of college
                   Titles and numbers of courses          Title and number of each course
                     taken                                  taught
                   Time period for each course            Time period for each course
                     taken                                  taught
                   Credits or hours earned for            Credits or hours given to each
                     each course                            student
                   Grade earned for each course           Grade distributed to each
                   GPA for time period of course            student
                     work
                   Cumulative GPA
      d.   When?   Shortly after courses were taken       Shortly after courses were
                                                            taught




                                                 Ch1 C3
Chapter 1, C 3. (Continued)

 2.   Differences exist between the information on students' grade reports and the
      information on instructors' grade reports because the needs of students and
      instructors are different. The student wants a record of the courses taken for
      the semester and the grades earned. The instructor wants a record of the
      courses taught and the grades assigned.
 3.   The information on the grade reports is probably similar to the information
      listed in 1 . However, the reports may not communicate the information well.
      Also, some students may want information that the registrar's office does not
      have the resources to provide or that would violate the confidentiality of the
      student or the instructor.
 4.   To make sure that the most useful information is provided to each user group,
      the employees of the registrar's office can (a) talk to members of each group
      to determine if their needs are being met; (b) talk to administrators to ensure
      that institutional policies are not being violated; (c) review the college's man-
      agement information system to determine what other information is available
      that may be beneficial to students and instructors; and (d) discuss with infor-
      mation system personnel the need to redesign the report to improve its use-
      fulness to user groups.




                                                 Ch1 C3 (2)
Chapter 1, C 4.

The following are examples of information useful for making a decision on open-
ing a restaurant in a foreign country.
a.   Quantitative Financial Information
     Operating information:
          Estimated food costs
          Estimated labor costs
          Other estimated operating costs (taxes, insurance, utilities, and supplies)
          Estimated selling price for each food item
     Capital investment information:
          Cost of land, building, equipment, and furniture
          Financing options and amounts

b.   Quantitative Nonfinancial Information
     Estimated number of customers per day
     Estimated number of hamburgers to be sold per day
     Estimated pounds of meat needed per day
     Estimated number of employees needed per day
     High-traffic time periods
     Income of people living in the area
     Ratio of population to number of restaurants
     Traffic counts past similar restaurants in the area

c.   Qualitative Information
     Government regulations
     Taxes, duties, and tariffs
     Government involvement in business operations
     Property ownership restrictions
     Demographics
     Accessibility
     Degree of competition
     Site visibility
     Process for training local managers and hiring employees
     Restaurant owner's level of education (Operations tend to be more success-
        ful if the owner possesses a college degree.)
     Local customs and practices (For example, in Saudi Arabia, separate en-
        trances, ordering windows, and eating areas for single men and for fam-
        ilies are required.)



                                              Ch1 C4
Chapter 1, C 5.


This assignment is designed to develop research, writing, and speaking skills.
Students will identify many different performance measures and targets for each
balanced scorecard perspective for a variety of local businesses. The email-style
report allows them to practice how to construct an informative email. In class,
after several students have presented their group's findings, ask each student to
identify the single most important measure for his or her business. List the measure
on the board and ask the class if there are any common threads among the meas-
ures. At the end of the discussion, you might summarize the linked perspectives
and measures. Then reinforce a balanced evaluation approach that takes all per-
spectives into consideration. If students have interviewed their business's man-
ager or accountant, ask how their companies actually implemented the balanced
scorecard. Compare the students' and the business manager's perceptions of
measurement.




                                            Ch1 C5
Chapter 1, C 6.
1. a. The mission statement students select indicates whether a student's cookie business
       will focus on low cost, branded quality product, or a specific need.
       Performance objectives and measures of success will vary depending on which of the
       three statement is selected.
     b. Student answers to 1a. should agree with their answer to 1b. The mission statement
        "To provide cheap cookies…" matches a cost focus. The mission statement "Our
        mission is to make the best…" matches a quality focus.
        The mission statement "Handmaking the best in custom..." matches to satisfying a
        specific need focus.
     c. Student mission statements should be unique and express in as few words as
        possible their company's fundamental goal or ideal state.

2.      Students should list their main products, primary customers, and where they will
        operate their business.
        Strategic objective: To not have a retail operation but to rely solely on the Internet to
3.      market products
        Tactical objective: To expand the ecommerce website to include 20 varieties of
        cookies over the next five years
        Operating objective: To keep expenses low and generate enough revenues during the
        first two months of operations to have a positive cash flow by the third month

        Business plan: To develop a complete list of goals, objectives, procedures, and
        policies relating to how to find, buy, store, sell, and ship goods and collect payment
        Budget: To list expected expenses and revenues for the first six months of operations

4.      Company name should be unique for each student.
5.      Management tools explained briefly in this chapter. Students may list ABM, ABC,
        TQM, JIT, TOC, and balanced scorecard. In future chapters, these tools will be
        explained further.




                                               Ch1 C6

								
To top