MODMGT2 Guide Questions Case 1 – Total Qualit y Management Romeo Engine Plant
1. What were the main objectives of the Romeo Engine Plant’s Plant’s manufacturing manufac turing strategy? 2. What specific initiatives initiatives did the management of Romeo Romeo implement implement to achieve these objectives? 3. What management control and feedback systems systems were in-place at Romeo? How did these management control systems assist with the implementation of Romeo’s overall manufacturing strategy? 4. How effective is the actual-to-actual comparisons in in the Romeo Engine Engine Plant? Will this be effectively implemented if the plant produces many models? 5. Evaluate the strengths strengths and and weaknesses of the Romeo Engine Plant’s Total Quality Quality Managemen Managementt (TQM) implementation. What, if any, improvements improvements would you suggest? 6. Did the managers of Romeo Romeo lose control as a result of the empowerment of the the line personnel? personnel? 7. How could management maintain the needed control while still empowering the line personnel? 8. What types types of management control systems work best for managing tension between empowerment and control? Did Romeo’s management control systems do a good job of managing tension? Case 2 – Six Sigma Six Sigma Imple Imple mentatio n at Maple Maple Leaf Foods
Main Issue: How to extend Six Sigma implementation at the Rivermede plant. 1. What is Six Sigma? 2. If you were in the position of Anthony Anthony Scire, how would you you respond to Louann Hulsman’s Hulsman’s request to implement Six Sigma @ the Edge at the Rivermede plant? 3. What questions would you ask Louann? 4. What criteria would you use to evaluate evaluate the readiness of the Rivermede plant plant to proceed with with the implementation of Six Sigma @ the Edge? 5. Why has Six Sigma been successful under Anthony’s tenure at Rivermede? Why had it been unsuccessful previously? 6. What is the role of Six Sigma in the Maple Leaf Foods organization? Is it set of tools or a manufacturing philosophy? Is it strategic or tactical? 7. What resources would you you need to implement implement Six Sigma @ the Edge? 8. Which group will feel the the greatest impact if Six Sigma @ the Edge is implemented: implemented: managers, supervisors or plant workforce? How would Six Sigma @ the Edge affect the managers, supervisors and plant workforce? Case 3 – Balanced Scorecard Volkswagen do B rasil: Driving Strategy with t he Balanced Balanced Scorecard
1. What challenges does Thomas Schmall face upon becoming CEO of Volkswagen Volkswagen do Brasil (VWB)? 2. Describe VWB’s new strategy. 3. How does the strategy map (Exhibit 4) and Balanced Scorecard (Exhibit 5) help Schmall and Senn implement the new strategy? 4. How well does the strategy map capture VWB’s new strategy? What are the the strengths and weaknesses of the scorecard and its implementation? 5. What are the benefits from having all employees understand the strategy? 6. What other actions did VWB take to support strategy implementation? 7. How can Schmall Schmall and his team use the scorecard scorecard to deal with with the challenges faced by the company in January 2009? Case 4 – Econ Econ omi c Value Added (EVA) (EVA) Vyaderm Pharmaceuticals
1. What is Economic Econom ic Value Added (EVA)? 2. Why did Maurice Vedrine, Vyaderm’s new CEO, chose to implement implement an EVA system?
3. Using data from Exhibit 8, calculate the following items: a. 2000 EVA for the North American Dermatology division. b. 2000 EVA bonus payout for a manager earning $200,000 assuming that the manager’s bonus is based on 100% of the division’s EVA. c. 2001 EVA and estimated bonus payout for the same manager, assuming that Vyaderm profits fall back to historical levels and the EVA improvement goal remains constant. 4. Based on your analysis, what would you recommend to Mr. Vedrine? 5. What organizational design issues may arise in the implementation of EVA? 6. How will IFRS/PFRS affect the EVA system? Case 5 – Cost Allocation Bridgeton Industr ies: Automotive Component & Fabrication Plant
1. 2. 3. 4. 5.
What is the competitive environment for Brigeton? How has Bridgeton reacted to its competitive environment? What did the outside strategic analysis recommend? What is the structure of Bridgeton’s cost system? The overhead allocation rate used in the 1987 model year strategy study at the Automotive Component & Fabrication Plant (ACF) was 435% of direct labor cost. Calculate the overhead allocation rate using the 1987 model year budget. Why you get different numbers? 6. Calculate the overhead allocation rate for each of the model years 1988 through 1990. Are the changes in 1987 in overhead allocation rates significant? Why have these changes occurred? 7. Consider products in the same product line: Product 1 Product 2 Expected selling price $ 62 $54 Standard material cost 16 27 Standard labor cost 6 3 Calculate the expected gross margin as a percentage of selling price on each product based on the 1988 and 1990 model year budgets, assuming selling price and material and labor cost do not change from standard. 8. Are the product costs reported by the cost system appropriate for use in the strategic analysis? 9. Assume that the selling prices, volumes and material costs for the 1991 model year will not change for fuel tanks and doors produced by the ACF of Bridgeton Industries. Assume also that if manifolds are produced, their selling prices, volume and material costs will not change either. a. Prepare an estimated model year budget for the ACF in 1991: i. If no additional products are dropped. ii. If the manifold product line is dropped. Explain any additional assumptions you make in preparing your estimated model year budgets. b. What will be the overhead allocation rate under the two scenarios? 10. Would you outsource manifolds from the ACF in 1991? Why, or why not? What more information would you want before reaching a final decision? Case 6 – Activ ity -Based Management Act iv it y-B ased Manag emen t at W.S. Ind us tr ies (A)
1. What are the main differences between the old cost system at WS Industries and the new ABC system? 2. Is WS a good candidate for ABC? What are the pluses and minuses of the ABC and ABM at WS Industries? 3. WS Industries used ABC to drive continuous improvement projects (CIPs). Was it good idea to link incentives to CIPs? 4. Did WS Industries need ABC to execute CIPs? Wouldn’t workers dream up CIPs based on their local knowledge as long as their incentives were linked to savings from CIPs? 5. Is it useful to classify activities as valued added and non-value added for CIPs?
Case 7 – Customer Profitability Slots, Tables and All That J azz: Managing Cus tomer Profitab ility at the MGM Grand Hotel
1. Keeping in mind the description of MGM’s profitability measurement systems, which of the following two customers appears more attractive for MGM? Why? Customer A Customer B Total theoretical win $2,000 Total folio $1,500 Tables theo $1,300 Hotel $750 Slots theo 700 Restaurant 250 Shows 500 Total Comps $800 Hotel $500 Restaurants 100 Tickets KA 200 Profitability $1,200 Profitability $1,500 Number of trips 2 Number of trips 1 2. Using the information in the MGM Players Club data set, discuss the differences in the various segments of players at the MGM Grand. Some hints for potential analyses: a. Begin by classifying customers according to their attractiveness from a static point of view (current profitability). Measure the concentration of profits. b. Look at some aspects of behavior of the different groups (please use as cut-off points total theoretical win of $500, $10,000 and $100,000): i. Number of trips ii. Trip length iii. Whether they play in tables or slots iv. Loyalty to a certain property c. Expand your study by measuring attractiveness from a dynamic point of view (current and future profitability). The three-year span of the databases is insufficient for a rigorous lifetime value analysis but adequate for a discussion of basic concepts and tools used to assess customer attractiveness. For instance, what player characteristics in 2002 increase the likelihood that a player will come back in 2004? 3. How does the MGM Grand derive value from its Players Club program and its player information systems? 4. Do you think it is appropriate for hosts from any property to have access to the entire profile of a specific customer, regardless of where that customer plays or stays? Why? If you think that hosts from a certain property should have access only to the information on customers’ play in their property, do you think there is anybody who should have a comprehensive view of the customer? 5. Do you think treating each property (MGM Grand, Bellagio, Treasure Island, etc.) as an independent profit center is the right approach to manage the MGM MIRAGE group? Why? 6. How should MGM view the entertainment business? Is it simply a mechanism for bringing gaming customers to the property? Is there a distinct entertainment segment of customers? (Hint: look at the overlap between the Players Club and the Hotel folio data base.) 7. How would you strategically manage the entertainment business? What action plan would you design to implement your vision? 8. Would your responses to questions 4 and 5 change as a function of your responses to questions 6 and 7? Case 7 – Management Accou nting Control Systems Barrington Produc ts, Inc.
Please refer to the case for guide questions.
