Stewart Box Company Visit… http://www.mbappt.blogspot.com/
Flow Of the Presentation <ul><li>Brief Summary </li></ul><ul><li>Strategic Planning </li></ul><ul><li>Issues & Concerns </...
SBC - Brief Summary <ul><li>Well established packaging company manufacturing both paper cartons & boxes </li></ul><ul><li>...
<ul><li>Various costs like labour & factory oh costs were apportioned annually </li></ul><ul><li>Budget was prepared by ea...
Strategic Planning <ul><li>Visionary outlook (larger space for warehouse) </li></ul><ul><li>NPV method for the purpose of ...
 
ISSUES & CONCERNS <ul><li>External Issues - </li></ul><ul><li>Paperboard & carton industry- characterized by strong compet...
<ul><li>Internal Issues- </li></ul><ul><li>Only President, Vice President Marketing & Controller involved in discussing & ...
<ul><li>Job-costing requires fixed costs to be allocated to each job. If allocation incorrect then costing goes wrong & sa...
 
Answer 1 <ul><li>Board Mill & Carton factory </li></ul><ul><li>(b)  $ 724.34 </li></ul><ul><li>(c)  If inventory level in ...
 
Answer 2 <ul><li>$ 9416 </li></ul><ul><li>(b)  16,847 – 830 = $ 16017 </li></ul><ul><li>(c)  $ 16847 </li></ul>
Answer 5 <ul><li>Strong Points –  </li></ul><ul><li>Differential Pricing Policy </li></ul><ul><li>Customized Production </...
<ul><li>Factories are located near to each other, so transportation cost is also saved </li></ul><ul><li>Company has well ...
Suggestions… <ul><li>Separate strategic tasks from functional tasks for better accountability & implementation </li></ul><...
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Stewart Box Company 2nd March

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Stewart Box Company 2nd March

  1. 1. Stewart Box Company Visit… http://www.mbappt.blogspot.com/
  2. 2. Flow Of the Presentation <ul><li>Brief Summary </li></ul><ul><li>Strategic Planning </li></ul><ul><li>Issues & Concerns </li></ul><ul><li>Answer 1 </li></ul><ul><li>Answer 2 </li></ul><ul><li>Answer 5 </li></ul><ul><ul><li>Strong Points </li></ul></ul><ul><ul><li>Suggestions </li></ul></ul>
  3. 3. SBC - Brief Summary <ul><li>Well established packaging company manufacturing both paper cartons & boxes </li></ul><ul><li>Paperboard & carton industry- characterized by strong competition because of potential overcapacity in most plants </li></ul><ul><li>High quality products </li></ul><ul><li>Marketing of products within a radius of 500 miles from factory </li></ul>
  4. 4. <ul><li>Various costs like labour & factory oh costs were apportioned annually </li></ul><ul><li>Budget was prepared by each responsibility center head. </li></ul><ul><li>Pricing policy followed was flexible depending on competitive conditions & design work </li></ul><ul><li>Contribution pricing was also practiced on some occasions to keep mill busy </li></ul><ul><li>Company followed job costing method using standard costs </li></ul>
  5. 5. Strategic Planning <ul><li>Visionary outlook (larger space for warehouse) </li></ul><ul><li>NPV method for the purpose of capital acquisition </li></ul><ul><li>Purchase of new assets on periodic basis (eg. printing press) </li></ul><ul><li>Designing special boxes to customer specifications </li></ul><ul><li>Periodic review done on each facet of its operation ( Experts for Production) </li></ul>
  6. 7. ISSUES & CONCERNS <ul><li>External Issues - </li></ul><ul><li>Paperboard & carton industry- characterized by strong competition because of potential overcapacity in most plants </li></ul><ul><li>Due to overcapacity, competition for large orders is particularly keen & price cutting is common </li></ul>
  7. 8. <ul><li>Internal Issues- </li></ul><ul><li>Only President, Vice President Marketing & Controller involved in discussing & finalizing sales estimates for Budgeting </li></ul><ul><li>Control system is based on the business units, not on the organizational structure. Difficult to pinpoint the source of the variances </li></ul><ul><li>Vague Distinction between task control and management control. </li></ul>
  8. 9. <ul><li>Job-costing requires fixed costs to be allocated to each job. If allocation incorrect then costing goes wrong & same will be passed on to customer or carton division </li></ul><ul><li>The products are marketed within a radius of 500 miles </li></ul>
  9. 11. Answer 1 <ul><li>Board Mill & Carton factory </li></ul><ul><li>(b) $ 724.34 </li></ul><ul><li>(c) If inventory level in Dec varies then it will be difficult to determine the profits of carton factory as there is interdepartmental transfer </li></ul><ul><li>(d) $ 86(Dec.) & $ 760 for year 1993 </li></ul><ul><li>(e) Above the standard level </li></ul>
  10. 13. Answer 2 <ul><li>$ 9416 </li></ul><ul><li>(b) 16,847 – 830 = $ 16017 </li></ul><ul><li>(c) $ 16847 </li></ul>
  11. 14. Answer 5 <ul><li>Strong Points – </li></ul><ul><li>Differential Pricing Policy </li></ul><ul><li>Customized Production </li></ul><ul><li>Meeting delivery deadlines </li></ul><ul><li>In-House Raw Material Supply </li></ul>
  12. 15. <ul><li>Factories are located near to each other, so transportation cost is also saved </li></ul><ul><li>Company has well establishes strategic planning & Periodic Reporting </li></ul><ul><li>Reporting system – exhibit 4 such that president can easily see which of his divisions are making money </li></ul>
  13. 16. Suggestions… <ul><li>Separate strategic tasks from functional tasks for better accountability & implementation </li></ul><ul><li>Periodic review of job cost to be allocated to labour & machine hour rate on frequent (monthly or quarterly) basis rather than yearly </li></ul><ul><li>Encourage sales force to tap other markets and new customers to fulfill volume requirement </li></ul><ul><li>Separate two manufacturing departments in order to allocate expenses related to sales, marketing, finance, HR </li></ul>
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