Victoria Chemicals Report

JJ has complained on behalf of the performance measurement system because currently his bonus is based off of production cost being less than 43 percent of sales. JJ believes that the production facility is operating as efficiently as, if not better, than it has before the expansion. Due to this performance measurement JJ’s ownership when from 25 percent to 8 percent and he is losing bonuses and annual dividends.

I have been immensely helped by many people, and especially by Deborah Bronnert of the Department of the Environment, to whom I am particularly grateful. But shortcomings or mistakes in this Report are my fault alone. Some recommendations are radical. The participants in the construction process can react in three ways to them. They can refuse to have anything to do with the Report. That would be a pity. The problems would remain, but the goodwill to tackle them, which has been growing dramatically over the last twelve months, would be lost. They can pick out the sections which suit them and reject the rest. If everyone does that, nothing will happen. Or, hopefully, they can try to make the package work, through the implementation structures which the Report recommends. They can set about Constructing the Team. The time to choose has arrived. The construction process cannot wait 30 years for another Banwell or 50 years for another Simon.

In 2009, transport for Scotland submitted the ‘Forth crossing bill’, the scheme is being taken forward in accordance with a policy memorandum. The queens ferry crossing will be built instead of repairing the current forth road bridge. Repairing the current bridge will take between 7 and 9 years, without an alternative crossing, sustained disruption of traffic will have a significant effect. The queens ferry crossing will provide two lanes in each direction, replacing road provisions for general traffic, increased travel growth will need to be satisfied by public transport.

• Researched information informs the design; with guidelines/constraints, such as Local Authority and Conservation Policy (A9), along with specialist consultant’s reports – including Day

Therefore, due to these differences in approach of the management, the profitability margins are so different for these two companies.

The investment requested is £12 million. Strategic and operating benefits were summarized in our previous memo to you. We have made, however, some changes to our investment analyses, which appear below.

Each division is operating independently with its own division manager. Also, each division’s performance had been judged on its profit and return on investment (ROI). The company policy of decentralizing responsibility and authority for all

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.

The upgrade of the Rotterdam plant involves implementing the Japanese technology and requires a capital expenditure of £8.0 million with £3.5 million spent today, £2.0 million on year one, £1.0 million on year two and £1.0 million on year three. This will also increase polypropylene output by 7% from current levels at a rate of 2.0% per year. In addition, gross margin will improve by 0.8% per year from 11.5% to 16.0%. After auditing the financial models, it is concluded that the static net present value of the upgrade is -£6.35 million using a discount rate of 10% and an expected inflation rate of 3% annually. The Rotterdam upgrade contains an option to switch to the speculated German technology being available in five years. The current value of the option is zero as it is deeply out-of-the-money. The total net present value of the upgrade is -£6.35 million. The incremental earnings per share of the upgrade is £ 0.0013, the payback period is 14.13 years, and the internal rate of return is 18.7%.

Andres was forced to import product from French division as he ran out of capacity several times due to new machines performing inadequately. This added an overhead expense of approximately 2147 (Additional maintenance costs + Transfer costs)

The two projects, Merseyside and Rotterdam, are mutually exclusive because accepting one project will result in a higher level of output at that plant, but will incur a loss at the other plant. By accepting both projects the company, Diamond Chemicals, would achieve a 14% increase in output. However, based on forecasted demand by strategic analysts, the 14% increase does not make sense, but an increase of 7% does. Therefore both these projects seem to be mutually exclusive because each would attain the 7% increase.

Brazilian multinational corporation, Metalfrio Solutions S.A., is one of the world’s largest manufacturers of plug-in commercial refrigeration equipment. They seek differentiation through innovation and customer relationships, through their brands of Metalfrio, Derby, Caravell and Klimasan, to meet the different needs of their customers (“Metalfrio”). In addition, Metalfrio goes beyond just their point of sales, as they include services along with their products, adding value and uniqueness to the company. However, it has taken many years to get to where they are now.

Since the production of Blast will occupy current excess capacity, no incremental cash flows are incurred; hence, none should be charged against Blast.

As a world wide major competitor in the chemical industry, Victoria Chemicals is a leading producer of polypropylene, a polymer that is used in a variety of products around the globe. Polypropylene is known for its strength and malleability and was priced as a commodity. The company operates two plants that produce polypropylene, one at Merseyside, England and the other at Rotterdam, Holland. Both plants were identical in scale, design, and age. However, Morris Greystock, the manager for the Merseyside plant saw a decline in the company’s stock, and decided to improve the position of the company. To do that, she came up with a project to increase production efficiency, rationalize the

* Lack of Information and communication across divisions Each division maintains its own marketing, manufacturing, logistics and administrative departments (Silos)