...JRT2: SUPPLY CHAIN – TASK 1 SIMULATION ANALYSIS TROY A. KRUMWIEDE WESTERN GOVERNORS UNIVERSITY JRT2: SUPPLY CHAIN – TASK 1 SIMULATION ANALYSIS Simulation Analysis PrimeComp is a company introducing a new line of microcomputers throughout the world market. It is PrimeComp’s mission to provide its customers, from around the world, with quality computer systems that meet specific business requirements at the best possible value. During the first quarter of operation, PrimeComp’s management reviewed market research to develop two brands in two target segments. PrimeComp’s primary brand, Champion, would be marketed to the Mercedes target market. A second brand, Globetrotter, would be designed for the secondary market, Traveler. To best reach PrimeComp’s customers, it was determined that two sales offices would be necessary. The first sales office was located in New York, North America and the second would be opened in Tokyo, Asia. These two locations revealed the most potential for the two brands and target markets. A factory was built that would create approx. 3,250 units per quarter. PrimeComp generated financing by issuing closely held stock. A total of 20,000 shares of common stock were issued at 100 per share to the owner and team members. This investment will be used for all first quarter expense and the unused balance will be carried over to quarter two. During the second quarter we will need to hire sales, services, and factory worker personnel. Compensation...
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...JCT2 Supply Chain Task 1 B 1. Evaluating my use of budgets and pro-forma statements to plan for production capacity In Ralph Estes's Dictionary of Accounting, a pro forma financial statement is defined as "a financial statement prepared on the basis of some assumed events and transactions that have not yet occurred." (Estes, 1981) Historical financial statements are used to measure an organization's past financial performance and condition. Without historical financial statements, financial analysis and evaluation would not be possible and management, board members, investors, and customers would be largely in the dark about how well an organization has done. Pro forma financial statements are similar to historical financial statements in appearance and use, except that they focus on the future instead of the past and are based upon assumptions rather than hard fact. According to CliveVlieland-Boddy “the construction of pro forma statements is based upon detailed financial projections and the historical relationships between different income statements and balance sheet accounts. A set of current financials serve as the foundation on which the pro forma will be built.” (Vlieland-Boddy, 2011) With starting a new company and brand, I did not have much in the way of current financials to use for helping create the pro forma statements initially. When I did start receiving the reports, the information was hard for me to use for projections due to the lack of a track record...
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...Tiffany S. Williams, MBA 06/01/2012 My Mentor: Megan Murphy Houston, Texas- Central Standard Time Task 1 Supply Chain Management Simulation Analysis (B): With utilizing the pro-forma balance sheets revealed that I did not use the correct approach. My overall market share for traveler was around 94% however in the workhorse line my overall market share was only around 42%. I made a decision to invest $500.000 into a certificate of deposit which proved to be disastrous. I only opened one office in North America and because of my neglect in opening an additional office, I was not a leader in the market share. It is vitally important to utilize the pro-forma balance financial statements as they are used to determine the outcome of previous decisions that one has made. Earlier, in the first quarter, I had a negative $294,000 that required that I take an emergency loan of $300,000. This was disappointing to me because and made me understand that I needed to make some adjustments especially since I was only at 3% market share with the workhorse line – I dropped the line completely. I made the decision to drop the workhorse after reviewing my profit and loss statements. I viewed this as a low profit item that was taking away from cash assets that could be best used to catapult our traveler line and this was the overall cause of having to take the emergency loan with the loan shark. My overall goal was to regain market share and then work to defend it. I eventually gained...
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...5 performance report, showing quarters 1 through 4 results. • Balance sheet from the Quarter 5 performance report, showing quarter 1 through 4 results. B1 A budget is an itemized summary of what a business’s income and expenses will be for a given period of time, while allowing the business during this period to determine if they are able purchases items based on their budget. It’s an important tool that is used by management to help prioritize their spending and manage their money and allow them to identify any wasteful expenditure, respond quickly to any financial changes and to achieve their financial goals. A pro forma statement is a financial projection during a specific time period that businesses can use to make decisions in regards to planning and control and for reporting to external owners, investors and creditors. Management can use them for comparison and analysis under various conditions and it can help minimize the risks that are associated with starting and running a new business. The key to a pro forma statement is to have objective and reliable information in order to accurately project business profits and financial requirements. (Inc., 2013) In regards to the simulation, the budget and pro forma income statements were used to determine if there was sufficient cash to invest in expanding the plant capacity, along with opening addition sales offices, increasing sales personnel, brands and marketing. In figure 1, plant expansion took place in the last...
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...Simulation JCT2-Supply Chain Robert Hilton January 2014 Simulation Results Cumulative industry results for last four quarters ending in quarter: 4 | | Minimum | Maximum | Average | Realtech | Total Overall | 0.00 | 916.17 | 25.93 | 0.00 | Financial Performance | -72.01 | 266.30 | 24.14 | -5.20 | Market Performance | 0.00 | 0.68 | 0.27 | 0.17 | Marketing Effectiveness | 0.00 | 0.82 | 0.58 | 0.60 | Investment in Future | 0.00 | 298,149.15 | 299.69 | 1.77 | Wealth | -2.01 | 6.34 | 1.16 | 0.54 | Human Resource Management | 0.00 | 0.82 | 0.61 | 0.78 | Asset Management | 0.00 | 2.36 | 0.95 | 0.46 | Manufacturing Productivity | 0.00 | 1.00 | 0.64 | 0.47 | Financial Risk | 0.00 | 1.00 | 0.79 | 0.87 | Balance Sheet | | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Current Assets | Cash | 451,285 | 487,834 | 1 | 1 | + 3 Month Certificate of Deposit | 19,000 | 19,000 | 269,000 | 269,000 | + Finished Goods Inventory | 0 | 755,487 | 1,149,025 | 1,097,024 | Long Term Assets | + Net Fixed Assets | 1,100,000 | 1,054,167 | 2,108,333 | 3,116,667 | | = Total | 1,570,285 | 2,316,488 | 3,526,359 | 4,482,692 | | Debt | + Emergency Loan | 0 | 0 | 572,691 | 2,313,173 | Equity | + Common Stock | 2,000,000 | 3,000,000 | 4,000,000 | 4,000,000 | + Retained Earnings | -429,715 | -683,512 | -1,046,331 | -1,830,481 | | = Total | 1,570,285 | 2,316,488 | 3,526,359 | 4,482,692 | Income Statement | | Quarter 1 | Quarter 2 |...
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...Supply Chain Rhonda Guyton Western Governor’s University Supply Chain A. Balance scorecard: Industry results for quarter: 4 | | Minimum | Maximum | Average | Kiera Computers | Total Overall | 0.00 | 1,133.44 | 86.79 | 9.04 | Financial Performance | -71.16 | 433.54 | 77.99 | 31.50 | Market Performance | 0.00 | 0.65 | 0.29 | 0.36 | Marketing Effectiveness | 0.31 | 0.97 | 0.75 | 0.82 | Investment in Future | 1.00 | 21.17 | 1.27 | 1.12 | Wealth | -1.63 | 4.34 | 1.49 | 1.10 | Human Resource Management | 0.62 | 0.82 | 0.77 | 0.67 | Asset Management | 0.04 | 3.46 | 1.64 | 1.17 | Manufacturing Productivity | 0.02 | 1.00 | 0.80 | 1.00 | Financial Risk | 0.00 | 1.00 | 0.92 | 1.00 | Balance sheet:Top of Form | | Balance Sheet | | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Current Assets | Cash | 67,500 | 1,298,465 | 1,762,030 | 1,761,658 | + 3 Month Certificate of Deposit | 500,000 | 0 | 0 | 0 | + Finished Goods Inventory | 0 | 0 | 0 | 0 | Long Term Assets | + Net Fixed Assets | 1,100,000 | 1,054,167 | 1,608,333 | 2,637,500 | | = Total | 1,667,500 | 2,352,632 | 3,370,363 | 4,399,158 | | Debt | + Emergency Loan | 0 | 0 | 0 | 0 | Equity | + Common Stock | 2,000,000 | 3,000,000 | 4,000,000 | 4,000,000 | + Retained Earnings | -332,500 | -647,369 | -629,637 | 399,158 | | = Total | 1,667,500 | 2,352,632 | 3,370,363 | 4,399,158 | Bottom of Form | Income Statement:Top of Form | | Income Statement | |...
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...November 10, 2013 JCT Task 1 B1 Pro-forma statements is a financial statement showing the forecast or projected operating results and balance sheet, as in pro forma income statements, balance sheets, and statements of cash flows. I did not use pro-forma statements in the beginning and it became nearly impossible to calculate my future expenses. If I had used the pro-forma statement, I would have been much more successful with the latter outcome by having funds available and less overhead. A budget statement consists of an operating statement, including other economic flows, a balance sheet, and a cash flow statement, which I did not use until I realized that my company was in trouble after the third quarter. If I would have used my budget statement appropriately in the beginning, the company would have seen proper growth and capital gains. The negative outcome of not using budget statements was clear throughout the last three quarters. My negative cash flow became excessive in quarter two due to over production of my products. Therefore in quarter three I had extremely high inventory holding cost and excess capacity costs. I tried to adjust in quarter four for the price per unit to compensate for my negative cash flow but I was already too far in the negative. Now that I have learned how the pro-forma statement works, I would have been able to...
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...Supply Chain Task 1 B.1 Pro-Forma and Budget Quarter 1 marked the launch of NeoTech. Two million dollars in capital was raised by selling company stock. This capital was used for the initial cost of the launch. Unlike later in the simulation, budget decisions in the first quarter were much easier to manage because costs were fixed, and the revenue guaranteed. Just over half million dollars was spent to open the first office and complete research and development. I determined the direction of NeoTech would be to focus on producing a high end computer as its marquee product and a mid-range/office computer as a secondary focus. Quarter 2 marked the first quarter where a product was produced, salesmen hired, and product sold. The most difficult decision in this quarter was finding the proper equilibrium between projecting sales of a new and unknown commodity, choosing the right amount of sales people and their compensation, and determining a competitive yet profitable price. Summarizing the decisions made in quarter 2, a total of 9 salesmen were hired at 55k annual salary. It was estimated that each salesman would sell at minimum 100 computers. The high end computer, “Engineo” was priced at $3799.00 with a $300 rebate. The “Neoffice” was priced at $2,000.00 with a $100 rebate. The cost per unit of the engine and Neoffice were $2,146 and $1,794 respectively. Based on the cost per unit and the predicted sales per salesman, NeoTech directed the production of 600 Engineo...
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...Task 1 – Supply Chain Management Task: Submit the following documents from your simulation company: • Fourth quarter cumulative balanced scorecard • Income statements for the four quarters • Balance sheets for the four quarters 1. Evaluate how you utilized budgets and pro-forma statements to ensure adequacy of funds for providing the production capacity you needed to achieve your business goals. The pro forma statements helped me by giving me an estimate of the next quarter based on the decisions I made during the quarter in which the pro forma statement was created. This enables management to determine how much money is available for expansion. The cash flow statement showed me a detailed breakdown of all available assets including cash and liquid assets. Pro forma financial statements were instrumental in determining the funding available to the company. The income statement was very easy to read in the first quarter, since there were not a lot of expenses. I had only a couple of expenses. One expense was for research and development. The other expense was to establish a sales office. My operating profit was in the negative as expected. It was not until the third quarter that the business had an operating profit. In the 3rd quarter, my pro forma cash flow statement indicated that if I repaid the entire emergency loan, I would still have over $600,000 cash balance. This also meant that I had adequate funding for advertising and to invest in a...
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...B1. During quarter 1 the company started with a budget of $2 million to get the company off the ground. From the initial seed capital, I was able to effectively plan and the company’s infrastructure using the Q1 balance, income and cash flow records. The financial allowances were budgeted for the opening of two sales offices, research and development, and fixed plant capacity. Based on a startup operating budget of $2 million, I was able to allocate a fixed plant capacity 1,625 units a quarter at cost of $600,000. Reviewing the cash flow balance sheets, the company was able to end the period with $810,000 positive balance and a negative cash flow of $590,000. Had the decision been made to increase the plant capacity the first quarter costing $1.1 million, the company would have been left with a negative cash balance, thus requiring additional funding to operate. As the company progressed through the quarters, careful analysis of the previous quarter accounting statement were undertaken to understand the current company cash flow versus total balance with combined assets and debt before allocating an operations budget plan. Using balance sheets along with pro forma statements allow the budget to be planned by projecting the impact to the cash flow in real time. Using the Pro Forma statements in conjunction with setting the cost of goods and the capacity of the manufacturing facility for quarter 2, the company was able to realize $1,810,000 in revenue, with a cost of $1,195...
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...Managing Internal Cost & Controlling – Developing & Maintaining Quality – Managing Operations JCT2 Supply Chain Task 1 Western Governor’s University Introduction My company name was Arete Sytems. Arete is an ancient Greek term meaning “excellence of any kind”. The choice of name was intended to represent the quality, high-end systems that we would produce. B1. Using Budgets and Pro-Forma Statements to Plan Production Capacity One of my key lessons from this simulation was the importance of working in teams and openly discussing decisions that need to be made before making them. I approached the simulation as the only team member because the simulation didn’t include other participants. In retrospect, I would have assigned other members, at least in my mind, to gain additional team insights. I was not careful enough in setting pricing for my two products correctly in the second quarter when we actually began sales. I priced my high end Mercedes line accidentally at the price I had planned for my mainstream Workhorse line and vice-versa. I did not look closely enough at my pro forma cash flow or income statements to recognize the forecasted loss and as a result did not dig deep enough to see the reasons and to make the adjustments in pricing. I was overly focused on cash at that point to fund production capacity. I discovered the error when evaluating second quarter actuals. Going into third quarter planning, I looked at the pro forma cash flow...
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...JCT 2 Supply Chain Task 1 During the course of this simulation, I tried to make conservative decisions that would be the most profitable for me and for my shareholders. I started by selecting a simple name for the company that could be easily promoted and would be become dated. As stated in the mission statement, my company’s goal was always to deliver the latest in computer technology to my customers. One of the ways that I was able to do this was research. I paid close attention to the research into what the market wanted in their computers. Not only did I pay close attention to the needs of the customers, but I was also receptive to the prices they were willing to pay. Since manufacturing and office based companies were willing to pay more, I selected those two market targets, Workhorse and Mercedes, and choose to ignore the Traveler. In the first quarter, money was not abundant, so I made the choice to offer a small compensation package for my employees. During the first quarter, my employees received only one week of vacation. They were given expanded coverage insurance and I contributed a small 5% to their pension. I realize that my compensation was not as good as my competitors. This is one of many problems that I corrected in later quarters. I had the opportunity to open two sales offices. I decided that I needed to have one sales office in the United States, so opening the office in New York was an easy decision. The other location for my sales office...
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...Please ensure all pages have a footer containing your name, College ID & Assignment title |Course Title |Extended Diploma in Strategic Management and Leadership|Student Name | | | |L7 | | | |Centre No |59910 |Reg. No | | |Unit |Strategic Supply Chain Management |E-mail | | |Unit Number |14 |Edexcel No | | |Batch No |B13/B15 |Signature | | |Assessor |Professor David Pinfield |Submitted by | | |Assignment Title | | | | | | |Date | ...
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...Table of contents: Task | Contents | 1 | * Explain the importance of effective supply chain management in achieving organisational objectives * Explain the link between supply chain management and business functions in an organisation * Discuss the key drivers for achieving an integrated supply chain strategy in an organisation | 2 | * Evaluate the effectiveness of strategies used by an organisation to maintain supplier relationships * Use information technology to create strategies to develop an organisation’s relationship with its suppliers * Develop systems to maintain an organisation’s relationship with its suppliers | 3 | * Assess how information technology could assist integration of different parts of the supply chain of an organisation * Evaluate how information technology has contributed to the management of the supply chain of an organisation * Assess the effectiveness of information technology in managing the supply chain of an organisation | 4 | * Explain the role of logistics in supply chain management in an organisation * Evaluate procurement practices in an organisation * Discuss the factors that must be considered when improving logistics and procurement practices in an organisation | 5 | * Plan a strategy to improve an organisation’s supply chain * Assess how a supply chain improvement strategy will benefit overall business performance in an organisation * Explain how barriers will be overcome in an organisation...
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...Student Assignment Covering Form |Course/Unit Information | |Course |Pearson (Edexcel) BTEC Level 7 – Diploma / Extended Diploma in Strategic Management & | | |Leadership | |Unit No. |Unit 14 | |Unit Name |Strategic Supply Chain Management and Logistics | |Unit code |D/602/2357 | |Batch |I 1501 – SSCML - Sredharran | |Instructor Information | |Name |Sredharran Sampath | |Phone |0529059903 | |Skype | ...
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