This document provides suggested answers to questions for a final exam on strategic performance management. It begins by outlining the structure of the exam, which has three sections: Section A on performance management, Section B on IT and econometric tools, and Section C on enterprise risk management. For Section A, it provides detailed answers to two sample questions, which assess objectives, importance and measures of supply chain management for a food company, and define customer relationship management and the problems and solutions for an insurance company. It also provides concise answers to two other sample questions.
This document provides suggested answers to exam questions for a strategic performance management exam. It begins by listing the sections and structure of the exam. It then provides a detailed answer to sample Question 1, which asks the student to define target costing, identify problems faced by a company, and recommend solutions. The answer defines target costing, lists the key principles, analyzes the company's issues, and proposes strategic and functional steps the company could take to address the problems. The document continues answering additional sample questions in the same level of detail.
DND is a delivery startup showing sales growth but still operating at a loss. It faces challenges from competition, an unclear expansion plan, unreliable delivery partners, and poor customer service. The advisor proposes solutions including a 3-year expansion plan targeting break-even, entering new large cities like Mumbai and Kolkata, feasibility studies, improved customer service, and adding new product categories to expand offerings. Key elements are developing local supplier relationships, hiring local delivery executives, and ensuring cross-departmental collaboration in implementing changes.
The document provides details about the author's internship at Jubilant Life Sciences. It discusses:
1) The author's responsibilities in controlling machines like pumps, boilers, and compressors to regulate mass flow rates, temperatures, and pressures.
2) A challenging situation where boiler furnace temperature increased drastically due to high coal mass flow, which was solved by shutting down some nozzles.
3) Maintenance tasks performed on equipment like testing and maintaining a heat exchanger, setting up a new refrigeration system, and replacing compressor parts.
MANAGEMENT PRACTICES IN BEXIMCO PHARMAArif Hossain
Beximco Pharmaceuticals Limited (BPL) is a pharmaceutical company established in 1976 in Bangladesh. It has over 30,000 employees and is a subsidiary of the Beximco Group. BPL has a tall organizational structure with different executive roles performing specialized skills like technical, human, conceptual, and design. BPL engages in comprehensive planning processes including establishing objectives and strategies, developing short, mid, and long-term plans, and allocating resources and budgets. Its objectives are set hierarchically from the overall mission down to individual employee objectives. BPL prioritizes verifiable objectives that create clear understanding of plans among employees.
This document is an internship report submitted by Jewel Rana on their internship at Next Collections Limited, which is part of the Ha-Meem Group. The report provides an overview of the production processes and coordination at Next Collections Limited. It describes the various sections involved in garment production such as design, pattern making, sampling, grading, cutting, sewing, inspection, finishing and packing. The report also discusses the duties performed by the intern in the production coordination section and analysis of production reports. It aims to understand the garment factory environment and document the learning during the internship period.
The document describes Porter's Five Forces model and Porter's value chain using Petronas, a Malaysian oil and gas company, as an example. It outlines Petronas' business activities, subsidiaries, and role in the Malaysian economy. It then applies Porter's Five Forces model to analyze competition in the oil and gas industry in Malaysia. Finally, it maps out the elements of Petronas' value chain, including its primary and support activities.
this project is a view of compensation process in BEXIMCO following the core book Fundamentals of Human Resources Management by Stephen P. Robbins, David A. DeCenzo.
This document provides suggested answers to exam questions for a strategic performance management exam. It begins by listing the sections and structure of the exam. It then provides a detailed answer to sample Question 1, which asks the student to define target costing, identify problems faced by a company, and recommend solutions. The answer defines target costing, lists the key principles, analyzes the company's issues, and proposes strategic and functional steps the company could take to address the problems. The document continues answering additional sample questions in the same level of detail.
DND is a delivery startup showing sales growth but still operating at a loss. It faces challenges from competition, an unclear expansion plan, unreliable delivery partners, and poor customer service. The advisor proposes solutions including a 3-year expansion plan targeting break-even, entering new large cities like Mumbai and Kolkata, feasibility studies, improved customer service, and adding new product categories to expand offerings. Key elements are developing local supplier relationships, hiring local delivery executives, and ensuring cross-departmental collaboration in implementing changes.
The document provides details about the author's internship at Jubilant Life Sciences. It discusses:
1) The author's responsibilities in controlling machines like pumps, boilers, and compressors to regulate mass flow rates, temperatures, and pressures.
2) A challenging situation where boiler furnace temperature increased drastically due to high coal mass flow, which was solved by shutting down some nozzles.
3) Maintenance tasks performed on equipment like testing and maintaining a heat exchanger, setting up a new refrigeration system, and replacing compressor parts.
MANAGEMENT PRACTICES IN BEXIMCO PHARMAArif Hossain
Beximco Pharmaceuticals Limited (BPL) is a pharmaceutical company established in 1976 in Bangladesh. It has over 30,000 employees and is a subsidiary of the Beximco Group. BPL has a tall organizational structure with different executive roles performing specialized skills like technical, human, conceptual, and design. BPL engages in comprehensive planning processes including establishing objectives and strategies, developing short, mid, and long-term plans, and allocating resources and budgets. Its objectives are set hierarchically from the overall mission down to individual employee objectives. BPL prioritizes verifiable objectives that create clear understanding of plans among employees.
This document is an internship report submitted by Jewel Rana on their internship at Next Collections Limited, which is part of the Ha-Meem Group. The report provides an overview of the production processes and coordination at Next Collections Limited. It describes the various sections involved in garment production such as design, pattern making, sampling, grading, cutting, sewing, inspection, finishing and packing. The report also discusses the duties performed by the intern in the production coordination section and analysis of production reports. It aims to understand the garment factory environment and document the learning during the internship period.
The document describes Porter's Five Forces model and Porter's value chain using Petronas, a Malaysian oil and gas company, as an example. It outlines Petronas' business activities, subsidiaries, and role in the Malaysian economy. It then applies Porter's Five Forces model to analyze competition in the oil and gas industry in Malaysia. Finally, it maps out the elements of Petronas' value chain, including its primary and support activities.
this project is a view of compensation process in BEXIMCO following the core book Fundamentals of Human Resources Management by Stephen P. Robbins, David A. DeCenzo.
Pankaj Kumar Gupta is a sales and marketing professional with over 17 years of experience in key account management, business development, sales, marketing, and team management. He currently works as the Product Head for Aluminium Chloride at Grasim Industries Limited in Mumbai. He has extensive experience in dealer network development, market penetration, and managing sales teams. He holds an MBA in Marketing and a BSc in Physics and Chemistry.
Smu mba om- solved assignments spring -2016smumbahelp
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Send your semester & Specialization name to our mail id :
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The document discusses the organizational structure of Beximco Pharmaceuticals Ltd (BPL). It provides an overview of BPL, describing it as Bangladesh's largest private sector company with a presence in many industries. It then outlines BPL's business areas and reasons for its leading position, including new technology, innovation, distribution strength, and experienced workforce. The document analyzes BPL's departments, human resources model, organizational chart, regional structure, decision-making policies, and use of Likert's organizational systems. It discusses methodology, findings, analysis, and considerations for BPL's organizational structure.
The document describes the trainees' in-plant training report submitted to Beximco Pharmaceuticals Ltd, thanking the company for the opportunity and providing an overview of the aims and objectives of their training, as well as summaries of their experiences in each department.
Emerging markets like China, India, and Brazil are driving growth in the pharmaceutical industry. This is affecting contract manufacturing organizations (CMOs) in three key ways:
1) CMOs face increased competition from large pharmaceutical companies investing in local production in these countries.
2) Demand is shifting to smaller niche products, requiring CMOs to develop new skills and business models.
3) A lack of qualified talent in emerging markets makes it difficult for CMOs to take advantage of new opportunities or produce more complex products. CMOs must invest in training and recruiting to develop the skills needed.
This document summarizes Procter & Gamble's (P&G) supply chain strategies and drivers. It provides an introduction to P&G, outlines their product lines, and describes their distribution channels. The key drivers of P&G's supply chain are then discussed, including facilities, transportation, information, inventory, sourcing, pricing, and promotion strategies. P&G follows both efficient and responsive supply chain strategies depending on the situation. Their goal is to minimize costs and immediately respond to consumer needs. The document concludes that P&G targets the middle class consumer segment in highly competitive fast moving consumer goods markets.
The structure of the slide is in the following way
1. Introduction
2. Company Overview
3. Findings
5. Analysis
6. Conclusion
The total valuation was done in the following way
1. Dividend Discounting Model
2. Operating Free Cash Flow Model
3. Relative Valuation
The analysis is done in two method
1. Fundamental Analysis
2. Technical Analysis
This document is a report on the functions of a corporate financial organization manager for a public limited company. It includes an introduction, organizational profile of Beximco Pharmaceuticals Ltd, work responsibilities of team members, findings and analysis of investment decisions, financing decisions, working capital management and dividend decisions. The conclusion provides an overall analysis and recommendations to improve Beximco Pharma's performance.
This document is a report on logistics management at Blue Dart in Bangalore, India. It was submitted by Pradeep M M to fulfill requirements for an MBA degree from Bangalore University. The report provides an overview of concepts in logistics management including supply chain management and logistics. It also profiles Blue Dart's services and operations. The methodology section outlines a review of literature, the existing logistics model at Blue Dart, objectives of the study, and limitations. The analysis section presents findings from data analysis and a suggested new logistics model. Major conclusions and recommendations are also provided.
This document provides an overview of MBM Garments Ltd., including:
1. MBM Garments Ltd. is a 100% export oriented garment manufacturer in Bangladesh that was founded in 1983 and has expanded to include multiple production facilities.
2. It describes the organizational structure and departments of MBM Garments Ltd., including merchandising, production, quality control, accounts, and human resources.
3. The document outlines the mission and vision of MBM Garments Ltd., which is to excel in responsible and efficient operations focused on creating value while respecting customers, maintaining professionalism, and respecting employees.
This document introduces Team Exodus and their presentation on Beximco Pharma. It provides an overview of Beximco Pharma, including that it was founded in 1976, manufactures generics for diseases like AIDS and cancer, and is the first Bangladeshi pharmaceutical company approved by the US FDA. It also describes Beximco Pharma's mission, vision, operations, recruitment process, training programs, and certification under ISO 9001.
The document provides information about the RMG (Ready Made Garment) sector in Bangladesh and MBM Garments Ltd., which is a garment manufacturing company. It discusses the history and growth of the RMG sector in Bangladesh as well as MBM Group, including details about its various subsidiaries. It then covers MBM's organizational structure, mission, vision, social compliance practices, and descriptions of key departments. The document aims to provide an overview of the RMG industry in Bangladesh and insights into the operations of MBM Garments Ltd.
Research Report on Abbott India Ltd. on the basis of Company Profile, Management, Shareholding Pattern, SWOT Analysis, Competitive Analysis, and Way forward.
The document provides information and instructions for Assessment 1, which requires students to develop a 5-year marketing plan for the Co-op Group's food retailing business. It will account for 50% of the final grade. Students must submit the assignment by the deadline and meet formatting requirements. The assessment addresses learning outcomes related to marketing strategies and ethics. To pass, students must demonstrate knowledge of marketing concepts and trends, apply theory to critically evaluate the Co-op's strategies, and develop a viable marketing plan to help rebuild the business.
This document summarizes a research study that compared two optimization algorithms, Symbiotic Organisms Search (SOS) and Particle Swarm Optimization (PSO), for solving a vehicle routing problem with time windows (VRPTW) as a case study to determine the most cost-effective distribution method for a central kitchen supplying multiple outlets. The study developed a VRPTW model to minimize distribution costs by considering vehicle capacities and time windows for delivering to each customer. The algorithms were applied to route design options for the central kitchen currently considering changing to a milk-run distribution approach from the current method.
This document provides an overview of Shore to Shore (BD) Ltd, including their production capacities and facilities. The key points are:
- Shore to Shore has three production facilities in Bangladesh and provides brand packaging solutions.
- Their production technologies include offset printing, flexography, screen printing, and weaving techniques like broadloom and needle loom.
- The company has a high daily production capacity across various product lines like woven labels, printed ribbons, tags, and heat transfer products.
- Shore to Shore aims to be a one-stop supplier of brand packaging products through superior quality, competitive pricing, short lead times, and good customer service.
This document discusses the importance of integrating applications to support e-business. It provides examples of how Amazon integrates its ordering, inventory, packing and shipping systems to efficiently fulfill customer orders. The document then discusses how integrating different application clusters is key to building a world-class enterprise. It outlines five stages of e-business design from cross-functional business units to inter-enterprise communities. Finally, it discusses key aspects of customer relationship management including using customer data to provide excellent service, implementing repeatable sales processes and creating loyalty through proactive solutions.
Lecture 1 Cost and Management AccountingRiri Ariyanty
This document summarizes a lecture on cost and management accounting. It introduces key concepts like the value chain, value chain analysis using examples, strategic cost management, and key success factors for businesses. It also discusses the decision making, planning and control process, including developing budgets, accounting systems to record transactions, and performance reports to compare actual results to budgets. Examples are provided to illustrate value chain analysis and how key success factors apply to proposed changes for a manufacturing company.
This document discusses the importance of successful relationships between customers and suppliers in a supply chain. It provides examples of how DynMcDermott Petroleum Operations Company achieves performance excellence in its customer-supplier relationships by aligning its purpose, vision, and values with its customer, the Department of Energy. It also discusses practices for developing strong customer-supplier relationships, such as collecting and disseminating customer information to design products and services, and establishing long-term contracts with suppliers.
Pankaj Kumar Gupta is a sales and marketing professional with over 17 years of experience in key account management, business development, sales, marketing, and team management. He currently works as the Product Head for Aluminium Chloride at Grasim Industries Limited in Mumbai. He has extensive experience in dealer network development, market penetration, and managing sales teams. He holds an MBA in Marketing and a BSc in Physics and Chemistry.
Smu mba om- solved assignments spring -2016smumbahelp
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
help.mbaassignments@gmail.com
or
call us at : 08263069601
The document discusses the organizational structure of Beximco Pharmaceuticals Ltd (BPL). It provides an overview of BPL, describing it as Bangladesh's largest private sector company with a presence in many industries. It then outlines BPL's business areas and reasons for its leading position, including new technology, innovation, distribution strength, and experienced workforce. The document analyzes BPL's departments, human resources model, organizational chart, regional structure, decision-making policies, and use of Likert's organizational systems. It discusses methodology, findings, analysis, and considerations for BPL's organizational structure.
The document describes the trainees' in-plant training report submitted to Beximco Pharmaceuticals Ltd, thanking the company for the opportunity and providing an overview of the aims and objectives of their training, as well as summaries of their experiences in each department.
Emerging markets like China, India, and Brazil are driving growth in the pharmaceutical industry. This is affecting contract manufacturing organizations (CMOs) in three key ways:
1) CMOs face increased competition from large pharmaceutical companies investing in local production in these countries.
2) Demand is shifting to smaller niche products, requiring CMOs to develop new skills and business models.
3) A lack of qualified talent in emerging markets makes it difficult for CMOs to take advantage of new opportunities or produce more complex products. CMOs must invest in training and recruiting to develop the skills needed.
This document summarizes Procter & Gamble's (P&G) supply chain strategies and drivers. It provides an introduction to P&G, outlines their product lines, and describes their distribution channels. The key drivers of P&G's supply chain are then discussed, including facilities, transportation, information, inventory, sourcing, pricing, and promotion strategies. P&G follows both efficient and responsive supply chain strategies depending on the situation. Their goal is to minimize costs and immediately respond to consumer needs. The document concludes that P&G targets the middle class consumer segment in highly competitive fast moving consumer goods markets.
The structure of the slide is in the following way
1. Introduction
2. Company Overview
3. Findings
5. Analysis
6. Conclusion
The total valuation was done in the following way
1. Dividend Discounting Model
2. Operating Free Cash Flow Model
3. Relative Valuation
The analysis is done in two method
1. Fundamental Analysis
2. Technical Analysis
This document is a report on the functions of a corporate financial organization manager for a public limited company. It includes an introduction, organizational profile of Beximco Pharmaceuticals Ltd, work responsibilities of team members, findings and analysis of investment decisions, financing decisions, working capital management and dividend decisions. The conclusion provides an overall analysis and recommendations to improve Beximco Pharma's performance.
This document is a report on logistics management at Blue Dart in Bangalore, India. It was submitted by Pradeep M M to fulfill requirements for an MBA degree from Bangalore University. The report provides an overview of concepts in logistics management including supply chain management and logistics. It also profiles Blue Dart's services and operations. The methodology section outlines a review of literature, the existing logistics model at Blue Dart, objectives of the study, and limitations. The analysis section presents findings from data analysis and a suggested new logistics model. Major conclusions and recommendations are also provided.
This document provides an overview of MBM Garments Ltd., including:
1. MBM Garments Ltd. is a 100% export oriented garment manufacturer in Bangladesh that was founded in 1983 and has expanded to include multiple production facilities.
2. It describes the organizational structure and departments of MBM Garments Ltd., including merchandising, production, quality control, accounts, and human resources.
3. The document outlines the mission and vision of MBM Garments Ltd., which is to excel in responsible and efficient operations focused on creating value while respecting customers, maintaining professionalism, and respecting employees.
This document introduces Team Exodus and their presentation on Beximco Pharma. It provides an overview of Beximco Pharma, including that it was founded in 1976, manufactures generics for diseases like AIDS and cancer, and is the first Bangladeshi pharmaceutical company approved by the US FDA. It also describes Beximco Pharma's mission, vision, operations, recruitment process, training programs, and certification under ISO 9001.
The document provides information about the RMG (Ready Made Garment) sector in Bangladesh and MBM Garments Ltd., which is a garment manufacturing company. It discusses the history and growth of the RMG sector in Bangladesh as well as MBM Group, including details about its various subsidiaries. It then covers MBM's organizational structure, mission, vision, social compliance practices, and descriptions of key departments. The document aims to provide an overview of the RMG industry in Bangladesh and insights into the operations of MBM Garments Ltd.
Research Report on Abbott India Ltd. on the basis of Company Profile, Management, Shareholding Pattern, SWOT Analysis, Competitive Analysis, and Way forward.
The document provides information and instructions for Assessment 1, which requires students to develop a 5-year marketing plan for the Co-op Group's food retailing business. It will account for 50% of the final grade. Students must submit the assignment by the deadline and meet formatting requirements. The assessment addresses learning outcomes related to marketing strategies and ethics. To pass, students must demonstrate knowledge of marketing concepts and trends, apply theory to critically evaluate the Co-op's strategies, and develop a viable marketing plan to help rebuild the business.
This document summarizes a research study that compared two optimization algorithms, Symbiotic Organisms Search (SOS) and Particle Swarm Optimization (PSO), for solving a vehicle routing problem with time windows (VRPTW) as a case study to determine the most cost-effective distribution method for a central kitchen supplying multiple outlets. The study developed a VRPTW model to minimize distribution costs by considering vehicle capacities and time windows for delivering to each customer. The algorithms were applied to route design options for the central kitchen currently considering changing to a milk-run distribution approach from the current method.
This document provides an overview of Shore to Shore (BD) Ltd, including their production capacities and facilities. The key points are:
- Shore to Shore has three production facilities in Bangladesh and provides brand packaging solutions.
- Their production technologies include offset printing, flexography, screen printing, and weaving techniques like broadloom and needle loom.
- The company has a high daily production capacity across various product lines like woven labels, printed ribbons, tags, and heat transfer products.
- Shore to Shore aims to be a one-stop supplier of brand packaging products through superior quality, competitive pricing, short lead times, and good customer service.
This document discusses the importance of integrating applications to support e-business. It provides examples of how Amazon integrates its ordering, inventory, packing and shipping systems to efficiently fulfill customer orders. The document then discusses how integrating different application clusters is key to building a world-class enterprise. It outlines five stages of e-business design from cross-functional business units to inter-enterprise communities. Finally, it discusses key aspects of customer relationship management including using customer data to provide excellent service, implementing repeatable sales processes and creating loyalty through proactive solutions.
Lecture 1 Cost and Management AccountingRiri Ariyanty
This document summarizes a lecture on cost and management accounting. It introduces key concepts like the value chain, value chain analysis using examples, strategic cost management, and key success factors for businesses. It also discusses the decision making, planning and control process, including developing budgets, accounting systems to record transactions, and performance reports to compare actual results to budgets. Examples are provided to illustrate value chain analysis and how key success factors apply to proposed changes for a manufacturing company.
This document discusses the importance of successful relationships between customers and suppliers in a supply chain. It provides examples of how DynMcDermott Petroleum Operations Company achieves performance excellence in its customer-supplier relationships by aligning its purpose, vision, and values with its customer, the Department of Energy. It also discusses practices for developing strong customer-supplier relationships, such as collecting and disseminating customer information to design products and services, and establishing long-term contracts with suppliers.
(1) A supply chain consists of all parties involved in fulfilling customer requests, including suppliers, transporters, warehouses, retailers, and more. It transfers information, products, and finances between stages.
(2) Major stages of a supply chain include sourcing/procurement, materials management, logistics, sales and marketing, quality control, customer service, inventory management, and transportation. Lack of coordination between stages can increase costs.
(3) Differences between push and pull supply chains relate to when customer demand is known. In a pull process, demand is known with certainty, while in push demand must be forecasted.
This Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants specialized in Supply Chain Management, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Supply Chain Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to improve your skills and the supply chain capability of your organization. Build success stories such as Walmart, Amazon and Zara who all gain a competitive advantage through supply chain improvements.
This Powerpoint presentation is only a small preview of our Toolkit.
You can download the entire Toolkit in Powerpoint and Excel at www.domontconsulting.com
Customer Relationship Management (CRM) is a business strategy that aims to understand customers and manage relationships to improve business. CRM integrates marketing, sales, customer service and support through people, processes and technology. It focuses on customer retention in addition to new customer acquisition. The purpose of CRM is to create value for customers and the company over the long term by improving customer service and gaining a competitive advantage. Strategically significant customers that provide high lifetime value, serve as benchmarks, or inspire change are priorities for building relationships through CRM.
Sample assignments of two year mba programsmumbahelp
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Send your semester & Specialization name to our mail id :
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Help you innovate business processes to differentiate your enterprise
Create value that contributes to bottom-line savings
Apply flexible and robust methodology and toolset that allow us to contractually commit to measurable outcomes for our clients
Help you take advantage of the opportunities of a global economy
Demand Management- Logistics and Supply Chain Management SumayyaMuhamed
In this presentation, I have explained about the demand management in supply chain management. This presentation can be very helpful for students and teachers who are studying or researching on subjects like supply chain management, demand management, logistics management, etc
Total Quality Management (TQM) aims to meet customer expectations through continuous improvement. The five principles of TQM are to produce quality work the first time, focus on the customer, have a strategic improvement approach, improve continuously, and encourage teamwork. Six Sigma is a data-driven approach to reducing process variation and defects using DMAIC (Define, Measure, Analyze, Improve, Control). Case studies show how TQM and Six Sigma helped healthcare provider AtlantiCare improve patient satisfaction and double revenues, and helped appliance maker LG Electronics and pharmaceutical company Catalent Pharma Solutions reduce defects and process inefficiencies.
7 R’s of Supply Chain Management explained in Brief | Distance Learning Cours...MIT School
Check out here, seven R’s of supply chain management that ensure that the whole process of logistics is carried out effectively. A Post Graduate Diploma in Supply Chain Management from MIT School of Distance Learning provides extensive knowledge of the field so that the successful candidates are immediately absorbed in the industry.
This was a proposal for a business plan for a company that I had once worked with that wanted to develop a long term business plan. I had worked with this company on TQM back in the 90's and they asked me to submit a proposal to help develop a business plan.
Apply Strategic Plan EvaluationRefer back to the Week 2 compa.docxjewisonantone
Apply: Strategic Plan Evaluation
Refer back to the Week 2 company, Hoosier Media, Inc. Your consulting firm is now ready to present suggestions regarding the strategic plan of Hoosier Media, Inc.
In a 10- to 20-slide presentation with speaker notes, address the following which will be presented to the Director of Marketing:
· The best possible options for evaluating a strategic plan
· Corrective actions that should be taken to ensure company operations are correctly aligned with the strategic plan
Include the following in your presentation:
· How should the company measure organizational performance?
· How will the company examine what progress is being made toward the stated objectives?
· What criteria will be used when determining whether company objectives are measurable and verifiable?
· Based on your knowledge of the company, what changes should be made to reposition Hoosier Media competitively for the future?
Research and find 2-3 topics in current news/events
and be prepared to explain the event/news item and its relationship to
the material that we have covered in the course.
You should review papers, magazines and news feeds
to bring potential items for the group to discuss and decide on the
topics. You should then put together a slide on each item which
describes the event and demonstrates how it would impact strategic
management planning processes.
Six Sigma
The term Six Sigma, popularized by Motorola, Honeywell, and General Electric, has two meanings in TQM. In a statistical sense, it describes a process, product, or service with an extremely high capability (99.9997% accuracy). For example, if 1 million passengers pass through the St. Louis Airport with checked baggage each month, a Six Sigma program for baggage handling will result in only 3.4 passengers with misplaced luggage. The more common three-sigma program (which we address in the supplement to this chapter) would result in 2,700 passengers with misplaced bags every month. See Figure 6.4.
Six Sigma
A program to save time, improve quality, and lower costs.
The second TQM definition of Six Sigma is a program designed to reduce defects to help lower costs, save time, and improve customer satisfaction. Six Sigma is a comprehensive system—a strategy, a discipline, and a set of tools—for achieving and sustaining business success:
1. LO 6.3Explain Six Sigma
· It is a strategy because it focuses on total customer satisfaction.
· It is a discipline because it follows the formal Six Sigma Improvement Model known as DMAIC. This five-step process improvement model (1) Defines the project’s purpose, scope, and outputs and then identifies the required process information, keeping in mind the customer’s definition of quality; (2) Measures the process and collects data; (3) Analyzes the data, ensuring repeatability (the results can be duplicated) and reproducibility (others get the same result); (4) Improves, by modifying or redesigning, existing processes and procedures; a.
Bbr 501 store operations and job knowledgesmumbahelp
This document provides information for students about getting fully solved assignments. It includes contact information to email or call for assistance with assignments. The document also includes sample assignments for a Bachelor of Business Administration program covering topics like store operations, visual merchandising, distribution center management, and employee policies. Questions include guidelines for inventory optimization, opening and closing checklists, the importance of visual merchandising, distribution center head duties, and policies around employee breaks and lunch. Short notes are also provided on solvency ratios and pilferage handling.
This document discusses strategy formulation and strategic decisions in operations. It outlines 5 steps to strategy formulation: 1) defining the primary task, 2) assessing core competencies, 3) determining order winners and qualifiers, 4) positioning the firm, and 5) deploying the strategy. It also discusses 7 areas of strategic decisions in operations: 1) products and services, 2) processes and technology, 3) capacity and facilities, 4) human resources, 5) quality, 6) sourcing, and 7) operating systems. The document provides examples and definitions for each step and strategic decision area.
Bbr 501 store operations and job knowledgesmumbahelp
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
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call us at : 08263069601
Who we are and what we can do for your company.
We believe that prosperity must include company and workers.
We face every challenge with the right thinking and tool: Lean Six Sigma, simulation, design of experiments, change management, training.
Solution manual for operations management processes and supply chains 10th ed...Aamir Ali
This document contains 11 discussion questions about operations management concepts. The questions cover topics like identifying core processes, competitive priorities for companies like Amazon and FedEx, designing hospital emergency room operations, and calculating productivity metrics. Sample responses are provided that analyze strategic plans, environmental factors, core competencies, and key capabilities for different organizations.
This document provides information about getting fully solved assignments from an assignment help service. It lists an email address and phone number to contact the service and provides details on the programs, subjects, credits, and marks for which assignments are available. These include programs in MBA, assignments in supply chain management, and other subjects. It also provides examples of assignment questions and responses on various supply chain topics like transportation, sourcing strategies, and issues in global supply chains.
This document provides information about getting fully solved assignments from an assignment help service. It lists an email address and phone number to contact the service and provides details on the programs, subjects, credits, and marks for which assignments are available. These include programs in MBA, assignments in supply chain management, and other subjects. It also provides examples of assignment questions and responses on various supply chain topics like transportation, sourcing strategies, and issues in global supply chains.
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Recruiting in the Digital Age: A Social Media MasterclassLuanWise
In this masterclass, presented at the Global HR Summit on 5th June 2024, Luan Wise explored the essential features of social media platforms that support talent acquisition, including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok.
Building Your Employer Brand with Social MediaLuanWise
Presented at The Global HR Summit, 6th June 2024
In this keynote, Luan Wise will provide invaluable insights to elevate your employer brand on social media platforms including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok. You'll learn how compelling content can authentically showcase your company culture, values, and employee experiences to support your talent acquisition and retention objectives. Additionally, you'll understand the power of employee advocacy to amplify reach and engagement – helping to position your organization as an employer of choice in today's competitive talent landscape.
Best practices for project execution and deliveryCLIVE MINCHIN
A select set of project management best practices to keep your project on-track, on-cost and aligned to scope. Many firms have don't have the necessary skills, diligence, methods and oversight of their projects; this leads to slippage, higher costs and longer timeframes. Often firms have a history of projects that simply failed to move the needle. These best practices will help your firm avoid these pitfalls but they require fortitude to apply.
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesHolger Mueller
Holger Mueller of Constellation Research shares his key takeaways from SAP's Sapphire confernece, held in Orlando, June 3rd till 5th 2024, in the Orange Convention Center.
Structural Design Process: Step-by-Step Guide for BuildingsChandresh Chudasama
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0. Dec 2013.pdf
1. Suggested Answer_Syl12_Dec13_Paper 17
Board of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 1
FINAL EXAMINATION
GROUP IV
(SYLLABUS 2012)
SUGGESTED ANSWERS TO QUESTIONS
DECEMBER 2013
Paper- 17: STRATEGIC PERFORMANCE MANAGEMENT
Time Allowed: 3 Hours Full Marks: 100
The figures in the margin on the right side indicate full marks.
This Question paper has been divided into 3 parts viz., Section-A.
Section-B and Section-C. Section-A carries 60 marks,
while Section-B & C carry 20 marks each.
Please note:
From Section-A: Performance Management, you are to answer Question No. 1&2,
which are compulsory Questions, each carrying 15 marks. Further answer any three
Question from the rest of the Questions in this section, each carrying 10 marks.
From Section-B: IT & Econometric tool in Performance Management, you are to answer
any one Question, carrying 20 marks.
From Section-C: Enterprise Risk Management, you are to answer any one Question,
carrying 20 marks.
SECTION A (60 Marks)
Performance Management
You are to answer Question No. 1&2, which are compulsory Questions,
each carrying 15 marks. Further answer any three Questions from the
rest of the Questions in this section, each carrying 10 marks.
1. M/s. Kraft Foods Ltd., is the world's second largest food company, with an average annual
turnover of over ` 200 Billion. The company provides the best brands of Coffee, Chocolate,
Cheese and many savory food items. To help in consistently delivering against its objectives,.
M/s. Kraft Foods Ltd. has created a very strong Supply Chain Relationship between the
company and its Suppliers/Customers. M/s. Kraft Foods Ltd., believes that a truly excellent
Supply Chain Relationship with its customers cannot be achieved without the support and
cooperation from its employees. Further the company believes that Customer Satisfaction is
the key for its success.
M/s. Kraft Foods Ltd., is committed to ensure that right products are made available to its
customers at right time and in right quantity and price. Its brand image is quite strong,
based on 3 key areas, viz., quality, value and trust.
M/s. Kraft Foods Ltd.'s supply chain functions are provided with excellent operational
support, which helps to deliver, as per its objectives.
M/s. Kraft Foods Ltd., focused on the successful management of a customer order from
the moment it is compiled at the customer, its processing through M/s. Kraft Foods Ltd.'s
order systems to the point of delivery at the customer warehouse. The company's policy is
to ensure that any 'waste' that could cause delay or disruption should be eliminated. The
customer order is compiled correctly, using accurate data, sent at agreed timings with
jointly agreed delivery windows. Ideally the order is electronically communicated using
EDI or the Internet. Further the company believes that e-commerce is improving
2. Suggested Answer_Syl12_Dec13_Paper 17
Board of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 2
communication with the use of e-mail, and the extranets making contract and the sharing
of knowledge and information faster and easier.
You are required to—
(i) Describe the objectives of Supply Chain Management, with regard to M/s. Kraft Foods
Ltd.,
(ii) Describe the importance of Supply Chain Management to the company under
reference viz., M/s. Kraft Foods Ltd.,
(iii) Describe the measures taken by M/s. Kraft Foods Ltd., to change to Supply Chain
Management. What are the benefits the company has been able to derive due to its
sound Supply Chain Management? 5x3
Answer:
1. (i) Objectives of Supply Chain Management (SCM) of M/s Kraft Foods Ltd..
M/s Kraft Foods Ltd., has the following objectives, while adopting Supply- Chain
Management:
1. Every facility available at M/s Kraft Foods Ltd., has an impact on cost. Supply Chain
Management must play a role to ensure that the food items made strictly conform
to customer's requirements.
2. SCM should be efficient and cost effective across the entire system.
3. Finally, SCM should revolve around efficient integration of Suppliers, warehouses,
stores and production units.
4. To ensure that right products are made available to its customers at right time and in
right quantity and price.
5. To ensure that supply chain functions are provided with excellent operational
support, which should help the company to deliver to the customers, as per its
objectives.
(ii) Importance of Supply Chain Management for M/s Kraft Foods Ltd.:
i) Managers these days recognize that getting products to customers faster than the
competitors will improve a company's competitive position. To remain competitive,
the company must seek new solutions to important Chain Management issues
like-supply chain management, modal analysis, load planning, route planning and
distribution network design.
ii) M/s Kraft Foods Ltd., must face corporate challenges that impact Supply Chain
Management such as Re-engineering, Globalization, Outsourcing, etc.,
iii) Faster execution of customers orders is the key to increasing sales. The company
stands with a chance of procuring more orders and more market share.
iv) SCM has an important role to play in moving goods more quickly to their destination.
v) There is a substantial profit advantage for the extra time that M/s Kraft foods are
getting from the market for faster delivery.
(iii) Measures taken by M/s Kraft Foods Ltd. in introducing Supply Chain Management and
the benefits derived from the SCM:
Over the last three decades, the concept and theory of business management have
undergone profound changes and development. Many old ways of doing business
have been challenged and many new ideas and approaches have been created like-
Business Process Re-engineering, Supply Chain Management, Balanced Scorecard,
etc., etc., The company 's top management, no doubt had some qualified experts, who
were fully conversant with SCM and decided to implement SCM in 1980s. The broad
reasons why SCM was introduced were-
Changes in the business environment,
Globalization,
Cut-throat competition
3. Suggested Answer_Syl12_Dec13_Paper 17
Board of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 3
Heightened customer expectation,
Technological impact, etc.,
The following measures were taken by M/s. Kraft Foods Ltd., for introducing SCM.
-Planning
-Selection of right suppliers
-Manufacturing /Production steps
-Logistics and
- creating a network for receiving defectives.
Among the benefits the company derived on application of SCM are;
a. Building up a Customer Service Excellence Programmed, that ensured that its
products are in right place, at the right time, in the right quantity, in excellent
condition and at the lowest possible supply chain cost.
b. Earning a good brand image delivered a competitive advantage. This was possible
only because of the company's thrust in the areas of quality, value and trust.
c. Service Excellence Program: which enabled the company to create a strong supply
chain relationship between the company, suppliers and customers and deliver
service excellence to its customers.
d. Perfect Ordering
e. Knowledge exchange'
f. Excellent Supply Chain relationship with its customers.
g. Consumer satisfaction.
In conclusion, for a company like M/s Kraft Foods, to provide the best brands of Coffee,
Chocolate, cheese, and several other delicacies, it needs to make sure-that every part
of its Supply Chain is working at its best. This case study provides an excellent example of
what businesses need to do in today's market place to ensure that the consumers
receive the products they desire in the right place, at the right time and in right
condition, every time.
2. M/s. Royal & Sun Alliance is one of the world's major insurance companies, with operations
in 50 countries around the world. Like other service industries, Insurance companies are faced
by consumers, whose requirements are becoming increasingly sophisticated and whose
willingness to switch to another supplier is on the increase. To compete successfully and
thrive in its environment, M/s Royal & Sun Alliance must be forward-thinking in their
approach to its customers and in applying new techniques. M/s. Royal & Sun Alliance has
applied successfully the concept of customer segmentation and relationship
management to achieve successful relationships with its key customers. M/s. Royal & Sun
Alliance sells most of its commercial business thru' Insurance brokers, who place the
business with the company, on behalf of their industrial and commercial customers.
Because selling insurance is so competitive, it was essential that the company focused on
working with high quality brokers, who had a positive attitude to business.
M/s. Royal & Sun Alliance believed in
Understanding each customer's unique needs.
Developing strategic plans and achieve mutual goals.
Provide the tools, resources and service to achieve goals.
A Relationship Manager controls the overall business strategy and acts as a co-ordinator
between different business divisions and customers.
M/s. Royal & Sun Alliance has created a website dedicated to its customers.
You are required:
(i) to define Customer Relationship Management.
(ii) what are the problems faced by the company before implementing Customer
Relationship Management?
(iii)what are the steps taken by the company to solve the problem? 5+5+5
4. Suggested Answer_Syl12_Dec13_Paper 17
Board of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 4
Answer:
2. (i) Definition of Customer Relationship Management (CRM):
CRM is an integrated approach to identifying, acquiring and retaining customers. By
enabling organizations to manage and coordinate customer interactions across
multiple channels, departments and lines of business, CRM helps organizations maximize
the value of every customer interaction and drive superior corporate performance.
CRM thus, entails initiatives that surround the customer side of the business. An example is
initiatives wrapped around the customers in an effort to increase sales, improve
customer service, add market share, enhance customer loyalty and reduce operating
costs of sales and service.
CRM is a business strategy comprised of process, organizational and technical change,
whereby a company seeks to better manage its enterprise around its Customer
behaviours. It entails acquiring and deploying knowledge about customers and using
this information across the various customers touch points to increase revenue and
achieve cost reduction through operational efficiencies.
(ii) Problems faced by M/s Royal & Sun Alliance before implementing CRM:
a. The company was not able to understand its customers and was not able to retain
them.
b. Company's Insurance brokers were not able to reach their strategic targets.
c. The company was not able to attract new customers.
d. The Direct Sales forces were not effective.
e. The call centres were not properly managed
f. Customer Relationship management was not satisfactory.
g. Customer requirements were becoming increasingly sophisticated.
h. The company was finding it difficult to thrive in such competitive environment.
(iii) Steps taken by M/s Royal & Sun Alliance to solve its problems:
a. As a major initiative, the company introduced Customer Relationship Management
(CRM). CRM enabled the company to forward thinking in their approach to its
customers.
b. M/s. Royal & Sun Alliance applied successfully the concept of customer
segmentation and Relationship Management to achieve successful relationships
with its key customers.
c. M/s. Royal & Sun Alliance believed in
Understanding each customer's unique needs
Developing strategic plans and achieve mutual goals.
Provide the tools, resources and service to achieve goals.
Joint Planning with key customers,
d. Retain customers through better customer experience. The company also initiated
steps to attract new customers.
e. Thru' introduction of CRM, the company was able to improve its profitability.
f. The company was able to reduce its customer management costs
g. CRM enabled the company to support its customer services'.'
h. M/s. Royal & Sun Alliance created a web-site for its clients.
5. Suggested Answer_Syl12_Dec13_Paper 17
Board of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 5
3. The following is the pay-off matrix of a game, being played by A and B. Determine the
optimal strategies for the players and the value of the game:
B's Strategy
b1 b2
A's Strategy a1 8 -7
a2 -6 4 10
Answer
3. This given problem does not have a saddle point.
Now suppose that A plays strategy a1 with probability x and plays strategy a2 with probability
1-x.
If B plays strategy b1 then A's expected pay-off can be determined in reference to the
figures given in the first column of the pay-off matrix as follows:
Expected pay-off (given that B plays b1) =8x-6(1-x)
Similarly, if B plays strategy b2, the expected pay-off of A can be determined as follows:
Expected pay-off (given that B plays b2) = -7x + 4(1-x).
Now we shall determine a value of x so that the expected pay-off for is the same,
irrespective of the strategy adopted by B. This value can be obtained by equating these
two equations. Thus, 8x-6(l-x) = -7x +4(1-x)
8x-6+6x = -7x+4-4x
Or x = 10/25 = 2/5.
A would do best to adopt the strategies a1 and a2 choosing in a random manner, in the
proportion of 2:3 (i.e., 2/5 and 3/5). The expected pay-off for A, using this mixed strategy
equals 8x (2/5)-6 (3/5) = -2/5
Thus, he shall net a loss of 2/5 per play in the long run.
We can determine mixed strategy for B in a similar manner as for A. Thus, if he plays strategy
b1 with probability y and strategy b2 within the ratio of 11:14 in a random manner,
B's expected pay-off (loss) per play shall 8(11/25) - 7 (14/25) = -10/25 = -2/5
It implies that B shall gain 2/5 per play in the long run.
Thus, we conclude that A and B should both use mixed strategies as given here and the
value of game equals -2/5.
Strategy Probability
For A,
For B,
a1
a2
b1
b2
2/5
3/5
11/25
14/25
4. The Budgeted overheads and Cost driver volumes of XYZ are as follows:
Cost pool Budgeted Overheads (`) Cost Driver Budgeted Volume
Material Procurement 5,80,000 No. of orders 1,100
Material Handling 2,50,000 No. of movements 680
Set-up 4,15,000 No. of set-ups 520
Maintenance 9,70,000 Maintenance hours 8,400
6. Suggested Answer_Syl12_Dec13_Paper 17
Board of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 6
Quality Control 1,76,000 No. of inspection 900
Machinery 7,20,000 No. of M/c hours 24,000
The company has produced a batch of 2,600 components of AX-15, its material cost was `
1,30,000 and labor cost ` 2,45,000.
The usage activities of the said batch are as follows:
Material order-26,
Maintenance hours-690,
Material movements-18,
Inspection-28,
Set ups-25 and
M/c hours-1,800.
Calculate Cost Driver Rates that are used for tracing appropriate amount of overheads to
the said batch and ascertain the cost of batch of components, using Activity Based
Costing. 10
Answer:
4.
Computation of Cost Driver Rates:
Particulars Amount(`)
1. Material Procurement 5,80,000/1100 527
2. Material handling 2,50,000/680 368
3. Set-up 4,15,000/520 798
4. Maintenance 9,70,000 / 8,400 115
5. Quality Control 1,36,000/900 196
6. Machinery 7,20,000 / 24,000 30
Computation of Batch Cost of 2,600 units of AX-15
`
Material Cost 1,30,000
Labour Cost 2,45,000
Prime Cost 3,75,000
Add: Overheads
Material Orders 26x527 13,702
Material Handling 18x368 6,624
Set up 25x798 19,950
Maintenance 690 x 115 79,350
Quality Control 28x196 5,488
Machinery 1800x30 54,000 1,79,114
Total Cost 5,54,114
5. Batron Co. Ltd., is considering a cost saving project. This involves purchasing a machine
costing ` 7000, which will result in annual savings on wages cost of ` 1000 and on material
costs of ` 400. The cost of capital of the company is 15%. The following forecasts are made of
the rates of inflation each year for the next 5 years:
Wages costs 10%
Material costs 5%
General prices 6%
Evaluate the project, assuming that the machine has a life of 5 years and no scrap value.
10
7. Suggested Answer_Syl12_Dec13_Paper 17
Board of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 7
Answer:
5.
Calculation of Net Present Value:
Year
(`)
Labour Cost Saving
(`)
Material Cost
(`)
Total Savings
@15%
DCF (`) Present
Values
1 1000 x (1.1)=1100 400x(1.05)=420 1520 0.870 1322
2 1000 x (1.1)2=1210 400x(1.05)2=441 1651 0.756 1248
3 1000 x (1.1)3=1331 400x(1.05)3=463 1794 0.658 1180
4 1000 x (1.1)4=1464 400x(1.05)4=486 1950 0.572 1115
5 1000 x (1.1)5=1610 400x(1.05)5=510 2120 0.497 1054
Present Value of total savings
Less: Initial Cash Outflow
Net Present Value (Negative)
5919
7000
(-)1081
Conclusion: Since the present value of cost of project exceeds the cost of savings from it,
hence it is not suggested to purchase the machine.
6. Bee manufacturing company sells its product at ` 1,000 per unit. Due to competition, its
competitors are likely to reduce price by 15%. Bee wants to respond aggressively by cutting
price by 20% and expects that the present volume of 1,50,000 units per annum will increase
to 2,00,000. Bee wants to earn a 10% target profit on sales. Based on detailed value
engineering, the comparative position is as given below:
Particulars Existing (`) Target (`)
Direct material cost/unit 400 385
Direct manufacturing labour/unit 55 50
Direct machinery costs/unit 70 60
Direct manufacturing costs/unit 525 495
Manufacturing overheads:
No. of orders (` 80 per order) 22,500 21,250
Testing hours (` 2 per hour) 45,00,000 30,00,000
Units reworked (` 100 per unit) 12,000 13,000
Manufacturing overheads are allocated using relevant cost drivers. Other operating costs per
unit for the expected volume are estimated as per below:
Research and design ` 50
Marketing and customer service ` 130
Total ` 180
Required:
(i) Calculate target costs per unit and target costs for the proposed volume showing
break-up of different elements.
(ii) Prepare target product profitability statement. 5+5
Answer:
6. (i)
Target Selling Price: `1000 less 20% ` 800
Less: Target Profit margin(10%)t ` 80
Target costs per unit `720
8. Suggested Answer_Syl12_Dec13_Paper 17
Board of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 8
The breakup of `720 per unit is as follows:
Target Costs per unit
Particulars per unit (`)
Direct Materials 385
Direct manufacturing labour 50
Direct machining costs 60
Direct manufacturing costs 495
Add: Manufacturing Overheads:
Ordering and receiving (21,250 x ` 80) ÷ 2,00,000 8.50
Testing and inspection=((30,00,000 x ` 2) ÷ 2,00,000 30.00
Rework (13,000 x `100) ÷ 2,00,000 6.50 45.00
Total manufacturing costs 540
Other operating costs:
Research and design 50
Marketing and Customer service 130 180
Full Product costs 720
(ii) Target Product Profitability
Particulars Per unit (`) 2,00,000 units (`)
1.Sales 800 16,00,00,000
2. Cost of goods sold:
Direct Materials 385 7,70,00,000
Direct Labour 50 1,00,00,000
Direct machining costs 60 1,20,00,000
495 9,90,00,000
Manufacturing overheads 45 90,00,000
540 10,80,00,000
3. Gross Margin(1-2) 260 5,20,00,000
4. Operating Costs
Research and design 50 1,00,00,000
Marketing and customer service 130 2,60,00,000
180 3,60,00,000
5. Operating Profit(3-4) 80 1,60,00,000
SECTION B (20 Marks)
IT & Econometric tool in Performance Management
You are to answer any one Question, carrying 20 marks.
7. (a) What do you think, would be the impact on the different levels of management due to
computers and MIS?
(b) What are the benefits that would accrue to a company practicing Total Productivity
Management? 10+10
Answer:
7. (a) Management Information System
Management Information System is a systematic process of providing relevant
9. Suggested Answer_Syl12_Dec13_Paper 17
Board of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 9
information in right time in right format to all levels of users in the organization for effective
decision making. MIS is also defined to be system of collection, processing, retrieving and
transmission of data to meet the information requirement of different levels of managers
in an organization.
Objectives of MIS
i) To provide the managers at all levels with timely and accurate information for
control of business activities
ii) To highlight the critical factors in the operation of the business for appropriate
decision making
iii) To develop a systematic and regular process of communication within the
organization on performance in different functional areas
iv) To use the tools and techniques available under the system for programmed
decision making
v) To provide best services to customers
vi) To gain competitive advantage
vii) To provide information support for business planning for future
Potential Impact of Computers and MIS on different levels of management:
The potential impact of computers on top-level management may be quite significant.
An important factor which may account for this change is the fast development in the
area of computer science. It is believed that in future computers would be able to
provide simulation models to assist top management in planning their work activities. For
example, with the help of a computer it may be possible in future to develop a financial
model by using simulation technique, which will facilitate the executives to test the
impact of ideas and strategies formulated on future profitability and in determining the
needs of funds and physical resources. By carrying sensitivity analysis with the support of
computers, it may be possible to study and measure the effect of variation of individual
factors to determine final results. Also, the availability of new class of experts will
facilitate effective communication with computers. Such experts may also play a useful
role in the development and processing of models. In brief, Potential impact of
computers would be more in the area of planning and decision making.
Futurists believe that top management will realize the significance of techniques like
Simulation, Sensitivity Analysis and Management Science. The application of these
techniques to business problems with the help of computers would generate accurate,
reliable, timely and comprehensive information to top management. Such information
would be quite useful for the purpose of managerial planning and decision-making.
Computerized MIS will also influence in the development, evaluation and
implementation of a solution to a problem under decision making process.
Potential Impact of Computers and MIS on middle management level will also be
significant. It will bring a marked change in the process of their decision-making. At this
level, most of the decisions will be programmed and thus will be made by the computer,
thereby drastically reducing the requirement of middle level managers. For example, in
the case of inventory control system, computers will carry records of all items in respect
of their purchase, issue and balance. The re-order level, re-order quantity etc., for each
item of material will also be stored in computer after its predetermination. Under such a
system, as soon as the consumption level of a particular item of material will touch
reorder level, computer will inform for its purchase immediately. The futurists also
foresee the computer and the erosion of middle management as the vehicles for a
major shift to recentralization. The new information technology will enable
10. Suggested Answer_Syl12_Dec13_Paper 17
Board of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 10
management to view an operation as a single entity whose effectiveness can only
be optimized by making decisions that take into account the entity and not the
individual parts.
The impact of Computers and MIS today at supervisory management level is maximum.
At this level, managers are responsible for routine, day-to-day decisions and activities
of the organization which do not require much judgment and discretion. In a way,
Supervisory manager's job is directed more towards control functions, which are highly
receptive to computerization. For control, such managers are provided with accurate,
timely, comprehensive and suitable reports. A higher percentage of information
requirements of executives is met out at this level.
Potential impact of computers and MIS on supervisory level will completely revolutionize
the working at this level. Most of the controls in future will be operated with the help of
computers. Even the need of supervisory managers for controlling the operations will be
substantially reduced. Most of the operations/activities now performed manually will be
either fully or partially automated.
(b) Benefits of Total Productivity Management (TPM): TPM provides a system for coordinating
all the various improvement activities for the company, so that they contribute to the
achievement of corporate objectives.
The following are some of the benefits that would accrue to a company practicing TPM:
i) A set of new management goals will be developed by the management, using the
skills and training provided during the implementation of the TPM.
ii) will lead to team-bonding and better accountability.
iii) Improved quality and total cost competitiveness.
iv) Will help in improving productivity and lead to quality team training for
problem-solving.
v) Will help in earlier detection of factors critical to maintaining equipment 'uptime'.
vi) Measure impact of defects, sub-optimal performance and downtime using 'overall
equipment effectiveness.
vii) Will help in motivating people to function better all the time.
viii) TPM helps in achieving 3 goals viz., Zero Product Defects, Zero Equipment
Unplanned failures
ix) a clear business culture, designed to continually improve the efficiency of the total
production system.
x) provides a practical and transparent ingredients to reach operational excellence.
8. (a) What is "Six Sigma"? What are the different key roles that have been identified by Six
Sigma for its successful implementation?
(b) What are ' 'Decisions Support Systems"? What are the different benefits that Decision
Support System can provide to a company? 10+10
Answer:
8. (a)
SIX SIGMA: Six Sigma simply means a measure of quality that strives for near perfection. It
is a disciplined, data-driven approach and methodology for eliminating defects in any
process.
The statistical representation of Six Sigma describes quantitatively how a process is
performing. To achieve Six Sigma, a process must not produce more than 3.4 defects
per million opportunities. A Six Sigma defect is defined as anything outside of customer
specifications. A Six Sigma opportunity is then the total quantity of chances for a defect.
Six Sigma identifies several key roles for its successful implementation:
11. Suggested Answer_Syl12_Dec13_Paper 17
Board of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 11
Executive Leadership includes the CEO and other members of top management
who are responsible for setting up a vision for Six Sigma implementation. They also
empower the other role holders with the freedom and resources to explore new
ideas for breakthrough improvements.
Champions take responsibility for Six Sigma implementation across the organization in
an integrated manner. The Executive Leadership draws them from upper
management. Champions also act as mentors to Black Belts.
Master Black Belts , identified by Champions, act as in-house coaches on Six sigma.
They devote 100% of their time to Six Sigma. They assist Champions and guide Black
Belts and Green Belts. Apart from statistical tasks, they spend their time on ensuring
consistent application of Six Sigma across various functions and departments.
Black Belts operate under Master Black Belts to apply Six Sigma methodology to
specific projects. They devote 100% of their time to Six Sigma.
Green Belts are the employees who take up Six Sigma implementation along with
their other job responsibilities, operating under the guidance of Black Belts.
(b) Decision Support Systems (DSS):
In a world of constant flux, informed and thoughtful decision-making is the cornerstone
of business success. As a manager, one must make decisions that affect his business
every day, some critical and some, not so critical. DSS allow faster decision-making,
identification of negative trends and better allocation of business resources all to the
benefit of the organization.
DSS are a specific class of computer-based information systems that support one's
decision making activities. A DSS analyzes business data and provide inter-active
information support to managers and business professionals during the decision-making
process, from problem recognition to implementing the decision. DSS use:
i. Analytical models
ii. Specialized data bases
iii. A Decision maker's own insights and judgments and
iv. An interactive, computer-based modeling process to support semi-structured
business decisions.
A key component to any DSS is Business Intelligence Reporting tools, processes and
methodologies. These provide us with rich reporting, monitoring and data analysis, which
are necessary for effective and fast decision-making.
DSS helps to support Business Decision Making. It helps the firm to gain competitive
advantage.
Benefits of DSS:
i. DSS speeds up the process of Decision-making.
ii. Helps in increasing organizational control.
iii. Speeds up problem-solving
iv. Helps to automate managerial processes
v. improves personal efficiency
vi. Eliminates value chain activities.
SECTION C (20 Marks)
Enterprise Risk Management
You are to answer any one Question, carrying 20 marks.
9. (a) Describe Corporate Risk Management & Explain relationship between Risk & Strategy.
(b) Do successful growth strategies automatically lead to a boost in profits?
(c) What is Risk Pooling? 8+6+6
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Answer:
9. (a) Corporate Risk Management works to ensure the safety of the business, guarding it
from risk of injury or financial loss. It helps to optimize risk taking of an organization.
Business process management in itself involves both short-term and long-term
decisions. An entrepreneur who promote a business entity is aware of the risks that he
will encounter during the period of incorporating the entity, establishing infrastructure,
and entering commercial operations in a time bound framework.
The entrepreneur tries to formulate a corporate strategy, and then implement,
evaluate, and control it to attain the desired goals. In today's volatile economy, it is
difficult to make corporate strategy work in a designated manner. Normally, corporate
strategy risk identification has three steps. These are as follows:
(1) Looking inwards to comprehend the organizational mindset and its operations.
(2) Understanding the external environment, especially, in respect to competition at
the market place and the political, social and cultural issues that impact
corporate strategy.
(3) Combining steps 1 and 2 projecting the requirements of the strategy and
identifying the grey areas, that is, risks.
Maintaining the balance between the internal and external environments is vital; this
process includes several risks, and maintaining this balance may itself become a
challenge.
(b) Do successful growth strategies automatically lead to a boost to profits - Not
necessarily as Greenwald and Kahn (2005) point out in a recent article, multinational
media giants like Disney, Viacom and Time Warner often posted spectacular annual
revenue growth in the decade between 1994 and 2004, while the low accompanying
shareholder returns indicated that in fact, they weren't generating true shareholder
value. Why? The authors maintain that companies operating in global markets are
often destined to have lower returns than more traditional companies operating in
'local markets'. They contrast the performance of these big media companies with
traditional US newspaper companies, whose revenue growth was much more modest,
but who managed to generate positive shareholder returns over the same period. The
advantage depends on economies of scale -and this requires a producer to operate
above a certain level of production - this minimum efficient scale is more likely to be
achieved in large-scale markets. In a restricted market, on the other hand, economies
of scale are much less easy to achieve, as they tend to require a much larger
percentage of the market.
(c) One of the forms of risk management mostly practiced by insurance companies is Risk
Pool. Under this system, insurance companies come together to form a pool, which
can provide protection to insurance companies against catastrophic risks such as
floods, earthquakes etc. The term is also used to describe the pooling of similar risks
that underlies the concept of insurance. While risk pooling is necessary for insurance to
work, not all risks can be effectively pooled. In particular, it is difficult to pool dissimilar
risks in a voluntary insurance market, unless there is a subsidy available to encourage
participation.
Risk pooling is an important concept in supply chain management. Risk pooling
suggests that demand variability is reduced if one aggregates demand across
locations because as demand is aggregated across different locations, it becomes
more likely that high demand from one customer will be offset by low demand from
another. This reduction in variability allows a decrease in safety stock and therefore
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reduces average inventory.
The three critical points to risk pooling are:
i) Centralized inventory saves safety stock and average inventory in the system.
ii) When demands from markets are negatively correlated, the higher the coefficient
of variation, the greater the benefit obtained from centralized systems i.e., the
greater the benefit from risk pooling.
iii) The benefits from risk pooling depend directly on the relative market behavior. If we
compare two markets and when demand from both markets is more or less than
the average demand, we say that the demands from the market are positively
correlated.
Thus the benefits derived from risk pooling decreases as the correlation between
demands from the two markets becomes more positive.
The basis for the concept of risk pooling is to share or reduce risks that no single
member could absorb on their own. Hence, risk pooling reduces a person or fim’s
exposure to financial loss by spreading the risk among many members or companies.
10. (a) RBI has developed certain guidelines with respect to operational risk in financial
institutions. Discuss.
(b) Discuss the concept of "Generally Accepted Cost Accounting Principles".
(c) What is Gambler's Ruin Theory?
(d) Discuss the concept of Risk Mapping. 8+4+3+5
Answer:
10. (a) The Reserve Bank of India has also developed certain guidelines with respect to
operational risk in financial institutions. These are as follows:
(1) The common equity component as a percentage of total assets should be at 7 per
cent in March 2009 for Indian banking sector as against the range of 3 per cent to 4 per
cent for large international banks. Total capital to risk asset ratio (CRAR) was 13.75 per
cent, with tier 1 banks at 9.4 per cent. Therefore, the Indian banks were in a favorable
position to meet the growth requirements. Currently, they have a reasonable period to
plan and raise required capital for future and growth.
(2) The gross NPAs for the banking sector have increased 2.4 per cent as on 31 March 2008 to
2.6 per cent as on 30 September 2009. In the context of rising non-performing assets and
likely slippages resulting in operational risk, Reserve bank of India has introduced 70 per
cent provisioningcoverage ratio for non-performing assets.
(3) Credit to commercial real estate has been evidencing higher risk perception,
especially, in the case of home loans. Reserve Bank of India has set certain limits
beyond which the security cover should be 120 per cent and the actual loan will be
only to the extent of 80 per cent of the asset value.
(4) Again, the banking sector has been investing in mutual funds and therefore has to be
sensitive to roll-over risks as well as liquidity risk in the event of the need for sudden
redemption by large investors at the same time.
(5) Non banking financial companies who are engaged in microfinance face a risk that
arises out of multiple lending and high interest rates leading to deterioration in asset
quality. So there is a need for these companies to access the credit quality of these
loans by continuous monitoring.
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(6) Securitization of asset by banks is also another area where operational risk is inherent.
The RBI is considering norms for minimum intervention requirement and minimum
holding for securable loans.
(7) Even though hedging is resorted to by banks, normally there are also unhedged
portions that may translate into severe stress and their asset quality may deteriorate. It is
necessary that the unhedged portion be closely monitored and be built into credit
and other rating assessment of the borrowers.
(8) Introduction of technology in banking has brought many benefits but has brought
with it an increasing vulnerability to cyber frauds. An appropriate control mechanism
needs to be built in to prevent such frauds.
(b) Generally Accepted Cost Accounting Principal (GACAP) is unique. There have been
compilations of financial accounting principles such as Paul Grady's work. The
formalization of Cost Accounting Principles in use in India started acquiring a more
cohesive form in the regime of administered prices ushered in the 1950 through the work
of Tariff Commission mandated to fix tariffs and prices in a variety of industries. The
movement acquired further fillip through the work of other statutory price-fixing
authorities including the Bureau of Industrial Cost & Prices, Ministry of Finance.
The requirement for determination of cost of production of manufactured goods used
for captive consumption further focused attention on the subject of GACAP.
The objectives of this document are;
(i) To codify the GACAP as applied in the Indian industry;
(ii) To narrow down diversities in cost accounting practices facilitating the process of
development of cost accounting standards;
(iii) To provide a reference source to industry and practitioners in preparation and
attestation of Cost Statements, where specific cost accounting standards are yet
to be issued;
(iv) To provide a reference source to all the stakeholders in the understanding and
interpreting the cost statement;
(v) To provide a base for monitoring the evolution of new concepts and practices in
cost accounting and to codify them as and when they become generally
accepted;
(c) The basic idea of this theory relates with game of a gambler, who plays with an
arbitrary sum of money. Gambler would play with some probabilities of gain and loss.
Game would continue until the gambler loses all his money. Theory would also talk
about gambler's ultimate ruin and expected duration of the game.
In context of the firm's failure, firm would take the place of a gambler. Firm would
continue to operate until its net worth goes to zero, point where it would go bankrupt.
The theory assumes that firm has got some given amount of capital in cash, which
would keep entering or exiting the firm on random basis depending on firm's
operations.
In any given period, the firm would experience either positive or negative cash flow.
Over a run of periods, there is one possible composite probability that cash flow will be
always negative. Such a situation would lead the firm to declare bankruptcy, as it has
gone out of cash. Hence, under this approach, the firm remains solvent as long as its
net worth is greater than zero. This net worth is calculated from the liquidation value of
stockholders’ equity.
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(d) Risk mapping is the process of identifying, quantifying and prioritizing the risks that may
interfere with the achievement of your organizational objectives. Risk mapping is the
first step in operational risk measurement, since it requires identifying all potential risks
to which the bank is exposed and then pointing out those on which attention and
monitoring should be focused given their current or potential future relevance for the
bank, while the risk mapping process is sometimes identified with the usual
classification of operational risks in a simple frequency/severity matrix, what is really
needed to map banks' internal processes in order to understand what could go
wrong, where, and why, to set the basis for assessing potential frequency and the
severity of potential operational events, and to define a set of indicators that can
anticipate problems based on the evolution of the external and internal
environments. Its aim is to arrive at a clear set of action plans that improve risk
management controls, in areas where these are necessary and help the
management of the organization's direct resources.
Benefits of risk mapping
o Promotes awareness of significant risks through priority ranking, facilitating the
efficient planning of resources.
o Enables the delivery of solutions and services across the entire risk management
value chain.
o Serves as a powerful aid to strategic business planning.
o Aids the development of an action plan for the effective management of
significant risks.
o Assigns clear responsibilities to individuals for the management of particular risk
areas.
o Provides an opportunity to leverage risk management as a competitive
advantage.
o Facilitates the development of a strategic approach to insurance programme
design.
o Supports the design of the client’s risk financing and insurance programmes,
through the development of effective/optimal retention levels and scope of
coverage etc.