Professional Documents
Culture Documents
Group 3 Ho Chi Yuen, Harvey Tsz Ki Fung, Becky He Rui, Kurt Harry Kong Jing Ning, Sylvia Kurnia Jessica Adharana, Jessica
Company Background
Founded in mid 19th century Survived lean years and the 1929 depression
Are the Goals of the Company the Same as Goals of Plants Managers and Marketing Organization?
Reward System
1-to-5 scale (5 = highest) Bonus base =$10,000 E.g. 3-point rating $10,000 X3 = $30,000
ii. The sale forces compensation consists of salary plus 8 percent sales commissions
iii. The sales of each line of pants are assigned to the respective marketing department
1.Basic Jeans Dept 2. Boys Jeans Dept. 3. Mens Casual Dept. 4. Mens Dress and Fashion Jeans Dept. 5. Womens Jeans Dept.
Brief Evaluation
Pro:
a. Strong stimulation to enhance sales b. comparatively efficient controlling system
Cons:
a. Focus solely on sales b. Sales budgeting is limited within dept. c. Inefficient communication with production dept. d. Relatively ineffective in corporation level
Suggested Solutions
Planning production budget based on sales forecast Improve the compensation system by lowering the weights of sales commission and rewarding for stable needs
Such policy may incent marketing staff to lower sales budget and ease their job
Production Unit
Engineered Expense Center:
Discretionary costs exist Engineered costs predominate
Efficiency
Effectiveness
Measurements of Efficiency
Facts: theoretical standard budgeting
Production time (hrs) per pair Production cost ($) per pair
Strength:
A measurement of the output??
Weaknesses:
The standard is merely an approximation of what ideally should have happened under the prevailing circumstances Recorded costs are not precise measures of the resources actually consumed
Measurement of Effectiveness
Current System:
Objectives: to keep all plants at peak efficiency Problem: complicated production schedules due to mid-year changes in pant needs provided by marketing department Result: cannot meet the objective
Weakness:
Cannot make everything engineered!
Current Plan:
Put one plant to work for a whole year on one type of pants
Strength:
Save start-up and changeover costs
Strengths:
A measurement of efficiency Remuneration package Incorporation of profits: measures both efficiency and effectiveness, no need to balance two types of measurements
Weaknesses:
Overlook other activities such as training and employee development