...s=Minimum inventory level that does not required new order.(if inventory level strictly below of s , company gives order and complete their inventory level to S at the beginning of new week.) Xt <s company buys Ot=S-Xt Order of company(Ot) = Xt≥s company buys nothing. t=0,1……n CASE A In this case, company sell mobile phones with backordering strategy. i) State= the inventory level at the end of week t. S={(s-m),……………,S } At the beginning of the week the lowest inventory level can be s, so that the minimum inventory level can be s-m which m is the maximum number of demand. ii) Xt <s Xt+1=S-Dt+1 Xt≥s Xt+1= Xt -Dt+1 iii) Xt=i Xt+1=j So; i<s j=S-Dt+1 Dt+1=S-j i≥s j= i -Dt+1 Dt+1=i-j Due to the reason that the demand function is distributed with poisson distribution. We use the probability function of Poisson which is; P(X=a)= λa*eλ/a! Therefore, we use adjust this equation according to our demand function. P(Dt+1=S-j)= λ(S-j) *e-λ ÷ (S-j)! P(Dt+1=i-j)= λ(i-j) *e-λ ÷ (i-j)! Let X0=4, λ=2,m=6, s=2 and S=5 iv) According to the probability functions that are stated above we calculated the probabilities of state transitions and inserted these values in to the matrix cells which is given below. Table 1. case a first probability matrix. The we realized that sum of the...
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...FIN 689 Ben & Jerry’s Homemade Case 3 Ang Xiao Case Study: Ben & Jerry’s Homemade (Case 3) This case focuses on the issues of asset control of Ben & Jerry’s Homemade, Inc with the four outstanding takeover offers by Dreyer’s Grand, Unilever, Meadowbrook Lane Capital and Chartwell Investment in 2001. Through the analysis of the four offers, I suggest the Board accept the Unilever’s offer. The advantage and disadvantage of each offer is discussed following. Dreyer’s Grand The offer does not maximize the shareholders wealth but retain the management philosophy. It is the best offer for Ben & Jerry’s management since the management team is maintained. In addition, Dreyer’s was also involved in community-service activities. It implies that the social drive will be strengthened after the acquisition offered by Dreyer’s Grand. However, the $31 per share offer is much less attractive than other rest offers from the shareholders perspective. In stock transaction, Ben & Jerry will share the synergy risk with the Dreyer’s Grand. Unilever The offer maximizes the shareholders wealth but disturbs the management philosophy. Unilever, as a profit oriented organization, may not encourage the philanthropy that is so important to B&J. There is a threat over the management philosophy. However, Unilever maintain select members of B&J management team. The select management team may influence policies to some extent. FIN 689 Ben & Jerry’s Homemade Case 3 Ang Xiao The offer with...
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...Ben & Jerry’s Homemade Inc. Case Study Case Summary This case examines issues of asset control for Ben & Jerry’s Homemade, Inc., in light of the outstanding takeover offers by Chartwell Investments, Dreyer‘s Grand, Unilever, and Meadowbrook Lane Capital in January 2000. The case requires a discussion of fundamental firm objectives and the implications of a non-traditional corporate orientation; one needs to review the development of Ben & Jerry's strong social consciousness and the takeover defence mechanisms that maintain management's control on company assets. One is required to estimate the economic cost of its social agenda, and evaluate the implications of takeover defence strategies. Ultimately, we have to take a position on whether Ben & Jerry's should continue to independently pursue its social agenda or accept one of the attractive takeover offers and accept a shift toward greater profit orientation. Company Overview Ben & Jerry's Homemade, Inc., the Vermont-based manufacturer of ice cream, frozen yoghurt and sorbet, was founded in 1978, with a $12,000 investment ($4,000 of which was borrowed). It soon became popular for its innovative flavours, made from fresh Vermont milk and cream. The company currently distributes ice cream, low fat ice cream, frozen yoghurt, sorbet and novelty products nationwide as well as in selected foreign countries in supermarkets, grocery stores, convenience stores, franchised Ben & Jerry's scoop shops, restaurants and other...
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...Ben & Jerry’s Homemade Inc. Case Study Case Summary This case examines issues of asset control for Ben & Jerry’s Homemade, Inc., in light of the outstanding takeover offers by Chartwell Investments, Dreyer‘s Grand, Unilever, and Meadowbrook Lane Capital in January 2000. The case requires a discussion of fundamental firm objectives and the implications of a non-traditional corporate orientation; one needs to review the development of Ben & Jerry's strong social consciousness and the takeover defence mechanisms that maintain management's control on company assets. One is required to estimate the economic cost of its social agenda, and evaluate the implications of takeover defence strategies. Ultimately, we have to take a position on whether Ben & Jerry's should continue to independently pursue its social agenda or accept one of the attractive takeover offers and accept a shift toward greater profit orientation. Company Overview Ben & Jerry's Homemade, Inc., the Vermont-based manufacturer of ice cream, frozen yoghurt and sorbet, was founded in 1978, with a $12,000 investment ($4,000 of which was borrowed). It soon became popular for its innovative flavours, made from fresh Vermont milk and cream. The company currently distributes ice cream, low fat ice cream, frozen yoghurt, sorbet and novelty products nationwide as well as in selected foreign countries in supermarkets, grocery stores, convenience stores, franchised Ben & Jerry's scoop shops, restaurants and other venues. Objective...
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...School of Management Studies, Karpagam University, Coimbatore, India. 1. Introduction When the founder Chairman of US Technology Private Ltd (UST) Late Mr G. A Menon wanted to set up a software company in Trivandrum, the capital city of the communist party dominated state of Kerala in the year 1999, many people close to him warned that he was setting himself up for failure. The state of Kerala was, in those days, labeled as anti-investment and non-conducive to new entrepreneurial ventures, as it was dominated by a work force, controlled by militant trade unionism with a vested interest to keep their flocks together with age-old dogmas and philosophies. However, Mr Menon went ahead with his plan and set up the company in Trivandrum, as he was keen to do something for his home state, even when the top echelon in the Secretariat (head quarters of the state administration machinery) discouraged him. In subsequent years, UST became the largest software exporter from the state of Kerala, to USA and other countries. UST is a fully-owned subsidiary of California-based US Technology Resources LLC. Established on September 1, 1999 with barely 14 employees, the company was set up, as a 100 per cent Export Oriented Unit, to export software services and solutions, in Techno Park, Trivandrum. The company touted as the first of the software conglomerations, which was set up under the special economic zone in the country, was set up and promoted as part of the worldwide US$7 billion Comcraft Group...
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...Instructions There are ten cases included in this packet (Cases #1 through #9). You are responsible for reading all nine cases prior to class on Monday, October 7th. In addition, your group is responsible for informally presenting the solution to one case on that date. The case assigned to each group corresponds to your group number. Your presentation should take the form of “teaching” the rest of the class the material related to the case. Keep in mind that for exam purposes all groups are responsible for the content and solutions to all cases so your group’s effectiveness at teaching the material is invaluable to your classmates. How you can best accomplish your task is up to you but you should, at a minimum, include the following in your presentation: • An overall summary of the case facts; • An explanation of the key accounting issue(s); • An identification and discussion of the relevant sections of the FASB Accounting Standards Codification; • A demonstration as to how the relevant authoritative accounting literature was interpreted and used to address the facts in your case; • A discussion of the accounting conclusions reached; and • Any required journal entries In addition to the in-class informal presentations, your group is also responsible for preparing a memo which includes a summary of: • The case facts so that the reader knows the background and the substance of the accounting issues in your case; • The relevant and applicable...
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...Capital Budgeting Case Shawn P. Oeser QRB/501 October 7, 2013 David Gobeli Capital Budgeting Case For the final week of QRB/501 we were asked to complete a Capital Budgeting Case based on two possible corporations for our company. Based on the 5 year projected income statement, 5 year projected cash flow, Net Present Value (NPV), and Internal Rate of Return (IRR); we were to determine which company would be the wiser acquisition. After completing the analysis it was determined that Corporation B would be the proper choice of the two corporations. According to our text the NPV, “of an investment proposal is equal to the present value of its annual free cash flows less the investment’s initial outlay” (Keown, Martin, & Petty, 2014, p. 310), therefore determining the NPV value of each company is a step needed in determining the whether either company was worth the initial investment. The next step was determining the companies IRR, which is defined in our text as, “the internal rate of return is defined as the discount rate that equates the present value of the project’s free cash flows with the project’s initial cash outlay” (Keown, Martin, & Petty, 2014, p. 310). Yet these were not the only determining factors, we also were required to look at the projected 5-year cash flow and the projected 5-year income statement. When comparing the NPV of both corporations it was clear that the NPV of Corporation B was almost double that of Corporation A at $36,262.58 and...
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...Capital budgeting is a process where business executives plan about the future of their company. The company looks at potential investments, and they must decide if the investment is worth being funded by the company’s current capital. The process involves decisions that will affect the company’s long-term business structure. In our capital budget case we had to choose between two corporations that are available for sale. As executives, we must look at the most logical corporation to invest in. We have calculated the projected income statement and projected cash flow for the next five years. After evaluating that information we were able to view the net present value and internal rate of return. Based off the findings of our research, we will be able to make a decision on the appropriate investment. The net present value and internal rate of return are capital budgeting methods that can be used to calculate the potential capital of an investment. It is used as a tool to determine if a potential investment is worthwhile. A firm needs to decide whether the investment will generate net economic profits or losses for the company (Gallant, 2009). In this case we used these methods to compare two corporations. The two corporations are listed at the same price; therefore, the net present value and internal rate of return will carry much of the weight in determining which corporation that our company will purchase. According to the text, the NPV is superior in comparison to the IRR. “One...
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...CHAPTER 2 Basic Cost Management Concepts and Accounting for Mass Customization Operations ANSWERS TO REVIEW QUESTIONS 2-1 Product costs are costs that are associated with manufactured goods until the time period during which the products are sold, when the product costs become expenses. Period costs are expensed during the time period in which they are incurred. 2-2 Product costs are also called inventoriable costs because they are assigned to manufactured goods that are inventoried until a later period, when the products are sold. The product costs remain in the Work-in-Process or Finished-Goods Inventory account until the time period when the goods are sold. 2-3 The most important difference between a manufacturing firm and a service industry firm, with regard to the classification of costs, is that the goods produced by a manufacturing firm are inventoried, whereas the services produced by a service industry firm are consumed as they are produced. Thus, the costs incurred in manufacturing products are treated as product costs until the period during which the goods are sold. Most of the costs incurred in a service industry firm to produce services are operating expenses that are treated as period costs. 4. The five types of production processes are as follows: ▪ Job shop: Low production volume; little standardization; one-of-a-kind products. Examples include custom home construction, feature film production, and ship building. ...
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...and Jerry Case 2010 “Ben and Jerry’s social orientation was balanced with product and economic objectives. Its mission statement included all three dimensions and stressed seeking new and creative ways of fulfilling each without compromising others.” This excerpt from the McGraw Hill text highlights much of Ben and Jerry’s mission. Although this illuminates the mission of the company, Ben and Jerry’s encountered many imbalances which made corporate takeover seem appealing to many shareholders. Perhaps the most unique part of Ben and Jerry’s is their 3 pillar mission statement. “Product: to make distribute and sell the finest quality all natural ice cream products made from Vermont dairy products… Economic: to operate on a sound financial basis on profitable growth increasing value to its shareholders and creating career opportunities and financial rewards for our employees…. Social: to operate the company in way that actively recognizes the central role that business plays in the structure of society by initiating innovative ways to improve the quality of life of the broad community”(Pinkerton,p49). Ben and Jerry’s actively strived to achieve all three dimensions. The most obvious being its mission to society. Not only did B&J contribute 7.5% of pre-taxed earnings to social causes, they found creative ways to help the community and environment. One prime example being their pact to give their dairy waste water to nourish a local farmers piglets. B&J exceled at...
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...Introduction 2 2 2 CRP concept 3 Critique of the CRP concept 7 3.1 The theoretical foundation of Damodaran’s equations – built on sand 7 3.2 Damodoran’s empirical basis – a hotchpotch of ad hoc ideas . . . . . 12 4 Conclusion 19 ∗ Freie Universität Berlin, Germany, Chair of Finance and Banking, E-Mail LK@wacc.de. † Universität Paderborn, Germany, Chair of Finance and Investment, E-Mail AL@wacc.de. ‡ Universität Graz, Austria, Chair of Accounting and Auditing, E-Mail Gerwald.Mandl@uni-graz.at. 1 Electronic copy available at: http://ssrn.com/abstract=1651466 1 Introduction For several years, when setting discount rates Damodaran has advocated more consideration of country risk premiums (CRP ) when it comes to assessing companies with activities in emerging markets. We have to acknowledge that his approach is enjoying growing support among investment banks and auditing firms. At the same time, it is to be noted that Damodaran’s concept has failed to resonate sufficiently with the academic community. This is reason enough to perform a systematic analysis and critical discussion of his country risk premium concept. Damodaran’s initial considerations concerning a country risk premium can be found in Damodaran (1999a) and Damodaran (2003), with further essentially unchanged mentions in his more recent publications. In our contribution we will concentrate on the two aforementioned sources. 2 CRP concept In the following, we intend to give a neutral, that is, non-judgmental...
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...profitability and financial stability as obtained through stock price and ratio analyses. The analysis is based on the five-year time span between 2009 and 2013. This report focuses primarily on P&G’s liquidity and credit management and overall earning power. Both time trend and peer group analyses are utilized to highlight the company’s strengths as well as weaknesses. Certain observed changes are noted and explanations are provided based upon the data collected. Johnson & Johnson (J&J) serves as the basis for the peer group analysis. Stock Price Movements In the past five years P&G has demonstrated a general upward trend in its stock prices. Towards the end of 2009, the market was just beginning to move out of the recession and P&G’s stock was at its five year low. As indicated in Chart A, the S&P 500 was also at its five year low around the same time. Until October of 2011, P&G trended more or less similarly with the S&P 500. However, after this point P&G’s progression slowed against the S&P. J&J’s growth however, better matched the growth of the market during this time. Despite the slowed growth since 2011, P&G demonstrates stability. In “Proctor & Gamble Is On The Right Track To Future Growth”, it is suggested that P&G’s standing as a giant in developed markets does not offer much room for accelerated growth. Whereas emerging markets offer much greater opportunity in that regard. The recent lags in P&G’s performance can be...
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...Case 4 Jaguar or Bluebird? Mark Chan’s Decision to Stay Overseas or Return Home after His Expatriate Assignment (A) Case 5 From Jaguar to Bluebird – Mark Chan Returns Home after His Expatriate Assignment (B) Teaching Note This teaching note was prepared by Günter K. Stahl, Assistant Professor of Asian Business and Comparative Management at INSEAD and Chei Hwee Chua, Doctoral Student at the Moore School of Business, University of South Carolina. It is intended to aid instructors in the classroom use of the case Mark Chan’s Decision to Stay Overseas or Return Home after His Expatriate Assignment (A and B). Financial support for the project "Expatriate Careers" (INSEAD research grant # 2010-502 R) is gratefully acknowledged. Copyright © 2004 INSEAD, Singapore. N.B. PLEASE NOTE THAT DETAILS OF ORDERING INSEAD CASES ARE FOUND ON THE BACK COVER. COPIES MAY NOT BE MADE WITHOUT PERMISSION. Case Summary Mark Chan’s five-year international assignment in a senior management position at corporate headquarters in London is coming to an end. With a generous expatriate compensation and benefits package, a large house with a big garden in the countryside, and two fancy cars, Mark and his family are living a life in England that they can only dream of in their home country, Singapore. Having performed well in his job at corporate headquarters, Mark is offered a promotion opportunity – a very attractive three-year international assignment at his company’s subsidiary in the Netherlands...
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...of richest billionaires of 2010 with individual net worths of $4.1 billion self created between the launch date in 1987 and today. So what is it that has made Red Bull one of the most successful energy drinks in the world? Designed to improve stamina, the ingredients of Red Bull boost performance by increasing alertness, concentration and reaction speed, making it the perfect supplement for periods of heightened physical pressure and mental stress. (Simpson J & B Dore, 2008). The drink is a variant of Yoovidhya’s Krating Daeng, a tonic discovered by Mateschitz who was awed by its powerful effect on reducing his jetlag post travel to the Far East. Mateschitz had experienced nothing as effective in the Western market and saw huge potential for a more palatable version amongst the Westerners, who needed more than one of the few existing sports energy drinks to help relieve them of the symptoms of a busy lifestyle. In 2006 it was recorded that more than three million Red Bull’s were consumed worldwide! (Simpson J & B Dore, 2008). So who is it that consumes these drinks? Red Bull is targeted at three main groups of people: the sporty, the party-animals, and the workers, each seeking the benefits of endurance that Red Bull provides in their individual disciplines. With a funky can design and an extreme promotional strategy, Red Bull has been...
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...Case 4 Jaguar or Bluebird? Mark Chan’s Decision to Stay Overseas or Return Home after His Expatriate Assignment (A) Case 5 From Jaguar to Bluebird – Mark Chan Returns Home after His Expatriate Assignment (B) Teaching Note This teaching note was prepared by Günter K. Stahl, Assistant Professor of Asian Business and Comparative Management at INSEAD and Chei Hwee Chua, Doctoral Student at the Moore School of Business, University of South Carolina. It is intended to aid instructors in the classroom use of the case Mark Chan’s Decision to Stay Overseas or Return Home after His Expatriate Assignment (A and B). Financial support for the project "Expatriate Careers" (INSEAD research grant # 2010-502 R) is gratefully acknowledged. Copyright © 2004 INSEAD, Singapore. N.B. Please note that details of ordering INSEAD cases are found on the back cover. Copies may not be made without permission. Case Summary Mark Chan’s five-year international assignment in a senior management position at corporate headquarters in London is coming to an end. With a generous expatriate compensation and benefits package, a large house with a big garden in the countryside, and two fancy cars, Mark and his family are living a life in England that they can only dream of in their home country, Singapore. Having performed well in his job at corporate headquarters, Mark is offered a promotion opportunity – a very attractive three-year international assignment at his company’s subsidiary...
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