...Case Study – Prestige Telephone Co. Company Profile Prestige Data Services is a subsidiary of Prestige Telephone Company, a public utility. They are a computer data service company that does data processing for the parent company in order to sell computer services. The company was opened in order to bring in additional revenue in order to offset increases in telephone rate increases. Throughout the three years of being in operation the subsidiary has been unprofitable. Case Question #1 Assuming Prestige Telephone’s demand for services will average 205 hours per week, what level of commercial sales of computer use would be necessary to break even each month? Given this analysis, is the subsidiary really a problem to Prestige? Solution Based on the breakeven analysis the subsidiary is a problem to Prestige. They are currently operating at an average demand of 205 hours per month. They need to operate at 1116.19 hours in order to break even. The additional, unexpected costs incurred along with the difficulty in finding customers have resulted in the subsidiary being unprofitable and unsustainable. Without bringing in additional customers to reach their breakeven point they should move forward with closing the subsidiary. Table 1.1 Month | Jan | Feb | March | High | Low | CM | Total revenue hrs | 329 | 316 | 361 | 361 | 316 | | Power | $1,633 | $1,592 | $1,803 | $1,803 | $1,592 | $4.69 | Operations | $7,896 | $7,584 | $8,664 | $8,664 | $7,584 | $24.00 | ...
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...Prestige Data Services Cost Volume Profit Analysis The following equation has been used for the purpose of this analysis: (Intra-company sales + commercial sales) = Fixed Cost + Variable Cost/hour * time (in hours) To work out only the contribution of intra-company and commercial computer use, “Other commercial sales” has been removed from the revenue. To counter that, “Materials cost” has been removed from the costs; three month average for these parameters is approximately equal. Fixed Costs = $212939 Rent ($8000), Custodial Services ($1240), Computer Leases ($95000), Maintenance ($5400), Computer Equipment Depreciation ($25500), Office Equipment and Fixtures ($680), Fixed component of Operations (6*$3600 = $21600), System development and maintenance ($12000), Admin ($9000), Sales ($11200), Sales Promotion ($8083), and Corporate Services ($15236). Variable Costs = $29/hour Variable component of Operations ($24 per hour), Power ($5/hour) – calculate from March power cost divided by March computer use, assuming only billable computer use is to be used for this variable cost. Revenue = $82000 + N* $800/hr (where N is number of commercial sales hours) Intra-company sale of $82000 per month at $400/hour translates to 205 intra-company sales hours per month. Hence, for breaking even: $82000 + $800 * N = $212939 + (205 hours + N) * $29 This gives us N = 177.54 hours, and gives us Break even revenue of $142032.68. Thus, to be run as a viable business...
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...Prestige Telephone Company En su análisis del caso, asumir lo siguiente: 1. Los gastos de promoción para los próximos meses están programados para $8,000. 2. Los valores de las cuentas: “Ventas por otros conceptos” y “Gastos de materiales y suministros” se compensarán aproxima Cuestiones 1. Valorar el resultado de las operaciones de Prestige Data Services. ¿Es realmente la subsidiaria un problema para Prestige Telephone Company? Considerar detenidamente las diferencias entre los costes que figuran en los informes y los costes que serían significativos para las decisiones que está considerando Daniel Rowe. 2. Suponiendo que la demanda de Prestige Telephone Company sea de 205 horas/mes, ¿cuál debería ser el volumen de horas vendidas a clientes externos para alcanzar el punto muerto? Supuesto Demanda PTC Tarifa PTC Demanda externos Tarifas externos Costos: Fijo Variale 400 - 28x205 + 76260 Punto equilibrio Ingresos PTC + Ingresos clientes externos 205 400 (205 * (400 - 28)) + (Q * (800 - 28)) - 19 ?? 800 (76,260) + (772Q) - 197,800 = 197,800 28 800xQ + 772Q + 772Q + 772Q Q -28xQ - 197,800 197,800 121,540 = = 3. Calcular el efecto que tendrían en el resultado las distintas opciones sugeridas por Rowe, dadas las siguientes estimaciones de Bradley: a) Aumentar el precio a los clientes externos a 1.000 dólares/hora disminuiría su demanda en un 30%. b) Reducir el precio a los clientes externos a 600 dólares/hora...
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...Prestige Telephone Company Question 1: Appraise the results of operations of Prestige Data Services (PDS). Is the subsidiary really a problem to Prestige Telephone Company (PTC)? Consider carefully the differences between the reported costs and costs relevant for decisions that Daniel Rowe is considering. The current data indicate that the PDS is in operating loss. And going by the presented data, yes, PDS is a problem to PTC at this point of time. And this in spite of many major costs being absorbed by PTC while charging a sum towards corporate services to PDS. However the way data was collected, costs calculated and presented could be different from the actual reality. And moreover the trend in the 3 months is that the commercial sales is going up (marginally though) and losses are reducing. Also it is reported that PDS is operating with un-used capacity (which might be another reason for the projected loss). Though PDS is in loss currently, (a) a re-structuring of the cost accounting methods, (b) more marketing activities to increase sales and thereby using the free capacity available, (c) reducing the staff count by reducing the number of shifts, could see PDS being profitable in the long run. Shutting down vs. restructuring PDS The decision has to be based on the ROI and the opportunity cost. By closing down PDS, the lost (customer) sales are the opportunity cost. But the short term benefits could be from the sale of equipment, savings from resource cost, rental...
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...PRESTIGE TELEPHONE COMPANY In deciding whether to continue, discontinue or sell a subsidiary company, we should consider the benefits and disadvantages of each option. We gauge the contribution of a subsidiary not only by looking at its profitability but also the advantage it can give to the parent company particularly in reducing its costs. Having a low profitability or even a net loss does not necessarily mean that the decision of retaining the subsidiary is wrong. Separating the relevant costs from the irrelevant costs helps the parent company determine how the subsidiary can be a factor in its overall operation. We may not know, but continuing could most likely be the best decision. Identifying cost objects and cost drivers are essential in determining the price, profit and breakeven levels of a firm. Differentiating fixed costs from the variable costs is also very important. Subtracting the variable cost from the selling price (or total revenues minus total variable costs) will give us the contribution margin which “contributes” to recovering the fixed costs, and the excess of which will increase the operating income of the company. Cost-Volume-Profit (CVP) analysis is very helpful in making sound business decisions for the short term, as well as for long-range planning, particularly in this case for product features and pricing. For a company to avoid operating losses, like in the case of Prestige Data Services, the managers should be interested in looking...
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...Case Analysis: Prestige Telephone Company Liam Hennessy, Xinyi Zhang, Yuan Chai, and Anthony Saba 1. Reasons for Continuing Losses Prestige Data Services’ main problem is that they have too many available hours that are not generating any revenue. In the first quarter of 2003, they have an average of 176 available hours per month of available hours. Its operations exact a huge amount of fixed costs to cover. If they could find more commercial customers for the available capacity, they could increase their commercial sales revenue by as much as $140,880 (176*800). In addition, they are also creating unnecessary expenses by having to pay all kinds of expenses during these unprofitable hours. 2. Breakeven Point of Commercial Sales & Evaluation of the Suggested Options (Questions #2 and #3 attached to the case) Before starting to answer these two questions, it is more than necessary that we get the formula for Prestige Data Services’ net income (loss), even they will not be very exact. If we combine the data in each category in Exhibit 2 (such as Intercompany sales, Rent, and Operations, etc.) as a whole, and let a = Intercompany revenue hours, and b = Commercial revenue hours, then we can derive the following revenue and cost formulae of Prestige Data Service in each month: i. Revenues Intercompany revenues = $400a Commercial revenues = $800b Total revenues = $400a+$800b+$0.055(400a+800b) Other revenues = $0.055(400a+800b) ...
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...McDermott Company Method of Least Squares McDermott Company is developing a cost formula for its packing activity. Discussion with the workers in the packing department has revealed that packing costs are associated with the number of customer orders, the size of the orders, and the relative fragility of the items (more fragile items must be specially wrapped in bubble wrap and Styrofoam). Data for the past 20 months have been gathered: |Month |Packing Cost |Number of Orders |Weight of Orders |Num. of Fragile | | | | | |Orders | |1 |$45,000 |11,200 |24,640 |1,120 | |2 |58,000 |14,000 |31,220 |1,400 | |3 |39,000 |10,500 |18,000 |1,000 | |4 |35,600 |9,000 |19,350 |850 | |5 |90,000 |21,000 |46,200 |4,000 | |6 |126,000 |31,000 |64,000 |5,500 | |7 |90,600 |20,000 |60,000 |1,800 | |8 |63,000 |15,000 |40,000 |750 | |9 |79,000 |16,000 ...
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...Chapitre 2 La diversité dans les organisations Dans ce chapitre , nous observerons de quelle manière les organisations s’efforcent d’exploiter au maximum les contributions potentielles d’un effectif diversifié . Nous montrerons aussi comment les caractéristiques démographiques , telles que l’appartenance ethnique et les différences individuelles en termes de compétences , influencent les performances et la satisfaction de l’employé . 1. La diversité La diversité est devenue en quelques années un enjeu important pour l’entreprise La diversité est un outil de communication pour l’entreprise qui comprend que les pratiques et les attentes de ses clients changent et se diversifient elles aussi . Enfin , les recruteurs et les gestionnaires de carrière mesurent progressivement l’intérêt de jouer la carte de la diversité pour attirer les talents , manager les compétences et optimiser les potentiels . Nous ne sommes pas tous pareils . C’est une évidence .Mais les managers oublient parfois qu’ils doivent reconnaître et exploiter ces différences pour tirer le meilleur de leurs employés . La gestion efficace de la diversité offre à l’organisation une capacité accrue d’accéder au vivier de compétences , d’aptitudes et d’idées le plus large possible . Les managers doivent aussi prendre acte que les différences entre les gens risquent d’entraîner des difficultés de communication , des malentendus et des conflits . Nous découvrirons ici comment les caractéristiques individuelles...
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...Prestige Data Services Cost Volume Profit Analysis The following equation has been used for the purpose of this analysis: (Intra-company sales + commercial sales) = Fixed Cost + Variable Cost/hour * time (in hours) To work out only the contribution of intra-company and commercial computer use, “Other commercial sales” has been removed from the revenue. To counter that, “Materials cost” has been removed from the costs; three month average for these parameters is approximately equal. Fixed Costs = $212939 Rent ($8000), Custodial Services ($1240), Computer Leases ($95000), Maintenance ($5400), Computer Equipment Depreciation ($25500), Office Equipment and Fixtures ($680), Fixed component of Operations (6*$3600 = $21600), System development and maintenance ($12000), Admin ($9000), Sales ($11200), Sales Promotion ($8083), and Corporate Services ($15236). Variable Costs = $29/hour Variable component of Operations ($24 per hour), Power ($5/hour) – calculate from March power cost divided by March computer use, assuming only billable computer use is to be used for this variable cost. Revenue = $82000 + N* $800/hr (where N is number of commercial sales hours) Intra-company sale of $82000 per month at $400/hour translates to 205 intra-company sales hours per month. Hence, for breaking even: $82000 + $800 * N = $212939 + (205 hours + N) * $29 This gives us N = 177.54 hours, and gives us Break even revenue of $142032.68. Thus, to be run as a viable business...
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...first quarter of 2003, Prestige Data Services (PDS), a strategic subsidiary of Prestige Telephone, is showing a net loss of $75K. Their monthly revenues for the quarter have varied from $189K to $212K and their expenses have remained relatively flat around $222K each month. Table 1: High Level Q1 2003 Financials It might appear that the data subsidiary is continuing to lose money and should be considered as a candidate for elimination. However, that is NOT the case. The financials don’t show the true value of PDS to Prestige Telephone as a whole. First of all, the data processing services that PDS provides are necessary for Prestige Telephone’s operation and if they don’t buy them from PDS they will buy them from another third party. Those costs are estimated to be around $82K per month, much more than the data subsidiary’s monthly losses in Q1 2003. Second, there is significant strategic value in PDS to Prestige Telephone. Based on current regulatory restrictions, the telephone operation is unable to change rates charged to customers for its telephone services. At PDS, however, rates to external commercial customers can be changed. As the potential market for data processing still is believed to exist, this gives PDS the opportunity to better exploit that opportunity and turn the current losses into profits in the future. Lastly, the opening of the PDS subsidiary is viewed by the Public Utilities Commission as a step for Prestige Telephone towards deregulation in...
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...Technology has been defined as the application of scientific methodology and knowledge for practical purposes. Over the years there has been a lot of technology being introduced none so much as the last quarter of a century where there has been some outstanding inventions by some outstanding individuals. Being able to award an individual the accolade of the greatest technology inventor of all time or a technology as the greatest invention of all time is a very daunting and overwhelming task as it in unenviable task to burden a person with. There are a lot of questions to ponder on questions like how do you measure the impact it has made to civilization, does it lead to further innovation or an end product in its own, what negative impact has it had to our world? All these questions are valid questions and lead to me being very subjective on this topic while selecting my 3 innovators and their inventions. Nikola Tesla, one of the most unsung inventors of all, he was arguably the greatest inventor of all time his portfolio included the electrical coil, radio waves and a host of other patents which he still owns till this day. Tesla was born in 1856 in in the Austrian Empire now the modern day Croatia; he was an electrical and mechanical engineer, a physicist and above all an inventor holding over 300 documented patents in the fields of science and technology. What makes him so great was his aspiration to move the human race forward through his inventions, his patents were “freeware”...
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...TELEPHONER Frans/Français Academiejaar 2014-2015 1 Le téléphone : conversation modèle. Ecoutez attentivement la conversation téléphonique suivante. Remarquez : le débit avec lequel on parle ; la mélodie (le français est une langue mélodieuse avec plus d’intonation que le néerlandais) ; l’expression des sentiments (je suis désolé, je regrette, ….) ; les formules employées au début et à la fin de l’entretien au téléphone ; etc. A L’Arche, bonjour. Colette Montreuil à l’appareil. Puis-je vous aider? B Bonjour Madame. Ici Marc Dujardin de Pepsi France. Pourriez-vous me passer Madame Lefort, svp? A Désolée, Monsieur, Madame Lefort est en réunion en ce moment. Mais si vous voulez, je vous passe sa secrétaire. B Dommage que je ne puisse pas parler à Madame Lefort en personne car il me faut reporter un rendez-vous. Mais, d’accord, passez-moi sa secrétaire. C Chantal Blasco, la secrétaire de Madame Lefort. Bonjour. B Bonjour Madame. Marc Dujardin de Pepsi France à l’appareil. J’aurais voulu parler à Madame Lefort au sujet de notre rendez-vous du 6 juin prochain qui ne pourra malheureusement pas avoir lieu en raison d’un voyage d’affaires en Allemagne. C Je vois Monsieur Dujardin. A quelle date voudriez-vous reporter le rendez-vous? B Pourriez-vous regarder dans l’agenda de Madame Lefort pour voir s’il est possible de différer ce rendez-vous d’une semaine ? C Un instant svp, Monsieur, je vais...
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...E-Business : Voice over IP Faculty of Computer Science and Automatic Control Politehnica University of Bucharest 313 Splaiul Independenţei ROMANIA Abstract: - Electronic business, commonly referred to as "eBusiness" or "e-business", or an internet business, may be defined as the application of information and communication technologies (ICT) in support of all the activities of business. Commerce constitutes the exchange of products and services between businesses, groups and individuals and can be seen as one of the essential activities of any business. Electronic commerce focuses on the use of ICT to enable the external activities and relationships of the business with individuals, groups and other businesses. Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers. Key-Words: - VoIP, gatekeeper, endpoint, gateway, softphone, asterisk 1 Introduction E-business involves business processes spanning the entire value chain: electronic purchasing and supply chain management, processing orders electronically, handling customer service, and cooperating with business partners. Special technical standards for e-business facilitate the exchange of data between companies. E-business software solutions allow the integration of intra and inter firm business processes. E-business...
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...Comcast: A Leader in Technology Innovation Overview of Comcast Comcast was founded in 1969 in Pennsylvania by Ralph Roberts, Joe Roberts, and Julian Brodsky after Roberts bid successfully for cable franchises in Philadelphia. After this success he decided to expand the company’s operations further and in 1972 they took the company public due to the stagnation of subscriber rates. Comcast decided to move into the telephone business in 1988 when they purchased Amcell, this was the first time a cable company was able to offer their customers telephone service from another source other than the telephone providers. Ralph Roberts named his son, Brian L. Roberts to be the next president of the company which took everyone by surprise but he turned out to be a very efficient manager. In the mid-1990s there was an increase in activity for the cable and telecommunications industries due to deregulation which brought the cable and telephone companies into competition with one another, an increase of mergers and acquisitions were seen since many companies wanted to build more efficient networks. Microsoft Corporation decided to invest one billion dollars into Comcast so they would have a cable partner that could test “ interactive television and high-speed computer services,” (Funding Universe) they decided to choose Comcast due to them having the most advanced cable systems in the country at the time. Around the same time Microsoft invested, Comcast converted to a new fiber-coaxial...
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...Business Communications Trends J Willis XCOM/285 January 30, 2011 Norman Pritchard The Public Health Human Resource Department services 22,000 employees in the healthcare field located all over the state of Georgia. Without communication, the daily activities of the essential to provide various services to the citizens of Georgia as well as the professional needs of the employees would be severely disabled. As a recruiter, my role is to find the best healthcare professionals to provide essential services for the citizens of the state. Communication is the key factor in the ability to perform my duties. I communicate with those that I provide service to through email, telephone, and face to face discussions. One of the major duties of my position is to recruit healthcare professionals such as laboratory specialists, nurses, program consultants, and epidemiologists. Competition for these types of healthcare professionals is fierce in the Atlanta area. The state of Georgia Public Health Department has to compete with private and public hospitals as well as federal health facilities such as the Centers for Disease Control. In order to attract these professionals, job announcements have to be written in such a way that captures the interest of the applicant. The job announcement has to be easy to read and contain clear instructions to apply for the positions. Communication with the hiring manager on the creation of this job announcement always begins...
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