Management Control System Essay

This then translates to a 50% chance of not having inventory available during job opportunities. Therefore, opportunity costs might occur. The indifference of the production managers' in these aspects of inventory control is alarming and should be acted upon.

The decline of inventory turnover presents the incresed possibility of inventory obsolescence which is likely to be assessed as higher business risk. In debts to equity part, the ratio in current year is much higher than that of preceeding year, which means the extent of use of debt in financing company is much higher than before. Pinnacle has used most of its borrowing capacity and has little cushion for addional debt.This action brought high business risk to Pinnacle. In addition, Pinnacle puchase more inventory in current year that that of preceeding year, and net sales are increasing also compared previous year. However, the net income is decreased significantly. These changes show expenses (maybe direct or indirect) have increased dramaticly. The company uses more expensive materials and labors to manufacure and sell products.

Improve inventory days. This is part of Horniman’s business; it is unclear whether the inventory can be improved, particularly if they are moving to more-mature plants. The analysis to make this trade-off is similar to that of the payables policy. One would divide the expected margin gain by the increase in inventory levels to compute a marginal return on capital. One additional level of concern is the substantial additional risk associated with increasing inventory when facing uncertainty with respect to the effects of interest rates and adverse weather.

Victoria Heavy Equipment’s most recent organization has been lacking effective communication practices amongst all of its divisions. The company has been suffering from lack of clear goals in measurable terms, for its divisions. The idea of each division functioning as an independent unit, whether it being cost or profit center, is a remarkable beginning. However, clear goals and key measurable need to be set for each center, which in our case have been overlooked. As a result, many of these centers have over spent, resulting in over expenditures, something we can definitely not afford with anticipated slower market.

Second, the classification in inventory management is still inaccurate. That results in some problems such as: the severe lack of some products which are in growing demand (1 inch valve series 230), the redundancy making storage expenses go up and the stagnancy in storage area (to products like gear driven rotary and monitor controller)

1. What is the competitive situation faced by Wilkerson? The critical product in term of market competition is the pumps of Wilkerson Company. The pumps are Wilkersons major product line with a production of about 12,500 units per month. Pumps currently have the lowest gross margin among all products, because competitors had been reducing prices on pumps and Wilkerson adopted its prices in order to remain competitive and to maintain the volume. 2. Given some apparent problems with Wilkersons cost system, should executives abandon overhead assignment to products entirely by adopting a contribution margin approach in which manufacturing overhead is treated as a period expense? Our conclusion is, that they should not adopt

1. It is a fact that item 345 has lost market share and as the product manager I would be concerned about it. By retaining FF20 price I can gain market share only if competition increases their price to FF20. At the outset this seems unlikely because competition has

First, we have identified if there is really an insufficiency in the amount of selling prices set by the Sales Department, in reference to Exhibit 1 of the case. We did this through identifying the maximum amount of overhead costs that the company can incur for the three products and comparing it with the total overhead costs. See Table 1 for details.

The purpose of this report is to explain what “Management Information Systems” (MIS) is. This report will discuss how management information system helps different departments in an organization. The functions and advantages of using MIS will also be examined in this report.

The new (JITD) system needs to be addressed in a manner that all departments can understand the importance of implementing such a program and how it will benefit the overall success of the supply chain. Overcoming Resistance at Barilla SpA Before trying to convince the distributors, one has to convince everyone at Barilla that the JITD system will be a success. If everyone within the company is convinced and they provide a single front to the distributors, Barilla has a better chance of convincing the distributors. Some of the steps that Barilla will have to take in this situation are: * Convince and use the Upper Level Management: if they are convinced of its feasibility, they will offer full support in trying to convince the Sales department. It will make a lot of difference if the Upper management talks to the Sales people than if just their Logistics department talks to them. * Involve the Sales Department in all stages: To make the Sales people feel important and wanted, Barilla should involve them in all stages of the JITD proposal. They should be made to feel that they would have lots to do even after the system comes into effect. * New Compensation System: The Sales department should be informed that they would still be rewarded for good performance, except that in this case it was the performance of the entire company as a whole and not just they individually. The new system would award a percentage of Barilla’s profits to the

The newly appointed district sales manager, Larry Barr, faces the problem of allocating sales quotas among his various sales representatives. This decision will affect everyone's earnings including his own. This problem is compounded by the fact that different territories have, for a variety of reasons, different potentials. In addition, the territory that is known to be the toughest will soon require a new sales rep.

is almost 3 times the number of units to OEMs so the potential here is

     General Motors has several internal and external influences that are challenging them to reduce their operating costs and become more efficient. In doing an analysis of the General Motors using Porter’s Competitive Model these influences become clear and opportunities for the company to reduce costs and increase efficiency using information systems becomes obvious. Porter’s Competitive Model is a model used to describe the interaction of external influences; specifically threats and opportunities that affect an organizations strategy and ability to compete [Laudon & Laudon, 2005, p. 103].

Given underutilized capacity in service, I do not understand why 1 am charged full price. It doesn 't make sense for the service department to mark up on projects undertaken for new and used car departments within our own dealership. 1 can 't see how we can make profits when one part of our company sells to another." Robbins added, "When I am unsure of the actual retail value, 1 tend to wholesale rather than take a risk of a negative margin at retail. However, when I do this, we may be losing as an organization as a whole." "I agree with Amy on this," stated Walker, "and I have the same problem with dealer-installed options. When 1 am charged full price for options, I have no incentive to try to sell these items." . "Hold on," said the service department manager. "1 make my profit by selling service, and these are the prices I would charge for outside work. To sell service for a lower price inside defeats the purpose of this profit center idea. But 1 do have a problem with getting full price for parts. The demand for parts is derived almost completely from service, and we are dependent on parts for quick delivery for

The proposed transfer price now is also lower than the expected prices from Black and FER so it should not be a problem with Guy Mercier who is pressuring Kamp to sell the engine at a reasonable price so that he can raise profit and bonus for his division.