This document discusses managing resources for a BTEC Higher National qualification in motor vehicle management and technology. It covers several topics related to managing resources including physical resources, critical factors affecting resource selection and use, planning, monitoring and controlling resources. It also provides an overview of classical management theories from Taylor, Ford and Fayol regarding scientific management, Fordism and Fayol's six principles of management.

1. BTEC HIGHER NATIONALS MOTOR VEHICLE MANAGEMENT AND TECHNOLOGY

2. 28/06/11 BTEC Higher National in Motor Vehicle Management & Technology. Unit 2.Managing Resources Introductions Name Job Experience Other Interests etc

3. UNIT 2: MANAGING RESOURCES

6. 28/06/11 BTEC Higher National in Motor Vehicle Management & Technology. Unit 2.Managing Resources

22. OUTCOME 1 Investigate the use of physical resources

24. 1 Physical Resources Within Planning, Control and Monitor Critical Factors Influencing the Selection of Physical Resources

33. 1.2.1.Financial Constraints: 28/06/11 BTEC Higher National in Motor Vehicle Management & Technology. Unit 2.Managing Resources Financial directive from proprietor or board of directors Business Plan and Operational objectives set for the budgeted financial year. Expressed as a Master Budget Departmental budget Department/Divisional plan and forecast Requirements: Labour Skill Training Equipment Vehicles IT Marketing Requirements: Buildings Services Stock Capital fixtures Investment Growth Profit Diagram 1.1

36. Diagram 1.2 Competitor Analysis 28/06/11 BTEC Higher National in Motor Vehicle Management & Technology. Unit 2.Managing Resources Competition Strengths and weaknesses Name Location Strength Weakness Opportunities Threats

47. 1 Physical Resources Within Planning, Control and Monitor The Process of Physical Resource Assessment and Recommendation

57. Dependent demand 28/06/11 BTEC Higher National in Motor Vehicle Management & Technology. Unit 2.Managing Resources The example here shows the demand for tyres in a car plant is dependent Upon the manufacturer’s production schedule Slack: 1998

58. Independent demand 28/06/11 BTEC Higher National in Motor Vehicle Management & Technology. Unit 2.Managing Resources Whereas in the example of tyre sales within the Independent model does not rely on any one single determining factor, but is linked to a whole host of Similar and different sales alike. Slack: 1998

60. 28/06/11 BTEC Higher National in Motor Vehicle Management & Technology. Unit 2.Managing Resources Applying Costings to Purchase of Resources When purchasing equipment or other resources it is necessary to plan and project the costs of use over a given period. This can be done using methods such as ‘payback period’ (PP) or ‘net present value’ (NPV)

61. Example Payback Period (PP) and Net Present Value (NPV) – using the project values 28/06/11 BTEC Higher National in Motor Vehicle Management & Technology. Unit 2.Managing Resources Using PP cost benefit analysis the project returns profit in year 5 Using NPV cost benefit analysis at 10% discount factor the project returns profit in year 6 0 £22,000 £0 -£22,000 1 £1,500 -£20,500 2 £3,500 -£17,000 3 £5,000 -£12,000 4 £10,000 -£2,000 5 £10,000 £8,000 6 £10,000 £18,000 7 £10,000 £28,000 Payback Period Project years Initial outlay Expected cash inflow £'s Revenue £'s NET PRESENT VALUE (NPV) Project years Initial outlay Expected cash inflow £'s Discount factor Projected value of cash inflows £'s NPV adjusted revenue £'s 10% 0 £22,000 £0 1 0 -£22,000.00 1 £1,500 0.909090909 £1,363.64 -£20,636.36 2 £3,500 0.826446281 £2,892.56 -£17,743.80 3 £5,000 0.751314801 £3,756.57 -£13,987.23 4 £10,000 0.683013455 £6,830.13 -£7,157.09 5 £10,000 0.620921323 £6,209.21 -£947.88 6 £10,000 0.56447393 £5,644.74 £4,696.86 7 £10,000 0.513158118 £5,131.58 £9,828.44

62. NPV 28/06/11 BTEC Higher National in Motor Vehicle Management & Technology. Unit 2.Managing Resources EXAMPLE

63. Activity 28/06/11 BTEC Higher National in Motor Vehicle Management & Technology. Unit 2.Managing Resources Work out the Net Present Value for each project at the end of its’ life cycle using a discount factor of 10% PROJECT A B C D Investment 15k 18k 10k 18k Year 1 income 7k 6k 5k 4k Year 2 income 4k 6k 5k 5k Year 3 income 3k 6k - 6k Year 4 income 2k 6k - 7k Year 5 income 1k 6k - 8k

64. Activity - Solution 28/06/11 BTEC Higher National in Motor Vehicle Management & Technology. Unit 2.Managing Resources PROJECT A B C D Investment 15k 18k 10k 18k Year 1 - 10% discounted 6.363k 5.454k 4.545k 3.636k Year 2 - 10% discounted 3.304k 4.956k 4.13k 4.13k Year 3 - 10% discounted 2.253k 4.506k - 4.506k Year 4 - 10% discounted 1.366k 4.098k - 4.781k Year 5 - 10% discounted 0.621k 3.726k - 4.968k Total 13.907k 22.740k 8.675k 22.021k NPV -1.093k 4.740k -1.325 4.021k

66. 2.Plan, Monitor and Control Utilization Factors and Affect Upon Efficiency Criteria

154. Documentation

166. Summary of Advantages and Disadvantages Sole trader Partnership Limited company Advantages Easy to form Minimum of regulation Easy to form Minimum of regulation Limited liability Easier to borrow money Can raise risk capital through additional shareholders Can be sold-on Pays Corporation Tax Disadvantages Unlimited Personal liability More difficult to borrow money Pay personal tax Unlimited personal liability for partnership More difficult to borrow money 'Cease trading' whenever partners change Pay personal tax Must comply with Companies Acts Greater regulation Greater disclosure of information