Cases for Management Decision Making

11456 Words Jan 17th, 2012 46 Pages
Cases for Management Decision Making
CA-1

suggested uses of cases
Case
CASE 1
Greetings Inc.: Job Order Costing
CASE 2
Greetings Inc.: Activity-Based Costing
CASE 3
Greetings Inc.: Transfer Pricing Issues
CASE 4
Greetings Inc.: Capital Budgeting
CASE 5
Auburn Circular Club Pro Rodeo Roundup
CASE 6
Sweats Galore
CASE 7
Armstrong Helmet Company
Overview
This case is the first in a series of four cases that presents a business situation in which a traditional retailer decides to employ Internet technology to expand its sales opportunities. It requires the student to employ traditional job order cost- ing techniques and then requests an evaluation of the resulting product costs. (Related to Chapter 2, Job Order
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Mr. Burns felt that to increase revenue in the mall locations, Greetings would need to attract new customers and sell more goods to repeat customers. In order to do this, the company would need to add a new product line. However, to keep costs down, the product line should be one that would not require much addi- tional store space. In order to improve earnings, rather than just increase rev- enues, Greetings would have to carefully manage the costs of this new product line.
After careful consideration of many possible products, the company’s management found a product that seemed to be a very good strategic fit for its existing products: high-quality unframed and framed prints. The critical el- ement of this plan was that customers would pick out prints by viewing them on wide-screen computer monitors in each store. Orders would be processed and shipped from a central location. Thus, store size would not have to in- crease at all. To offer these products, Greetings established a new e-business unit called Wall Décor. Wall Décor is a “profit center”; that is, the manager of the new business unit is responsible for decisions affecting both revenues and costs.
Wall Décor was designed to distribute unframed and framed print items to each Greetings store on a just-in-time (JIT) basis. The system works as follows: The Wall Décor website allows customers to choose from several hundred prints. The print can be purchased in various forms: