Tactical & Policy Considerations

IMPORTANT NOTE: The manager/author (and any contributors) to each section of your Performance Assessment must be identified...

MARKETING: by_____________

Perform another analysis of your consumers' perceptions of your products- using the same procedures & criteria specified in the Situation Analysis-Consumer Report (page 36, Team Member Guide).

1. Compare & contrast your products' ratings (@ Round 0 vs. Practice Round 4).

2. What implications do the results of your analysis have with respect to the nature & magnitude of the tactical decisions you made regarding your products' design, positioning, pricing, promotion & distribution?

PRODUCTION/ HR: by_____________

Assess the efficiencies & effectiveness of your plant utilization, inventory management, automation and capacity changes...

• Good numbers for plant utilization? At least 100%---150% to 180% even better (as long as it doesn't end up in a warehouse as excess inventory)

• Overall inventory positions? ...About 10% worth of sales is a good benchmark for inventory when developing sales forecasts. If you sold 1M units, about 100K in inventory would be fine

• Estimate the $$ impact of any stockouts. Stockouts prove costly not only because: 1) SG&A (sales, general & administration) costs have already been recovered, so missed sales (less tax and variable costs) would have gone towards profit; BUT ALSO- 2) Competitors often pick up additional sales as a result of your stockout.

Based on your analysis - what specific recommendations can you make that will improve production efficiencies & effectiveness....

1. What  productivity improvements (labor force- recruiting & training incentives) did you initiate? And Why?

2. What type, timing and level of expenditure regarding PMI's & TQM  do you plan to implement in the competition -- and what tangible/ demonstrable benefits do you expect?

FINANCE: by_____________

1) Report on your financial performance throughout the practice rounds regarding your margins, profitability,  & wealth creation.

2) What is your current “Financial Structure” Given your strategy & performance measures, is this what your financial structure should be? 

3) What has your Accounts Payable policy been? Accounts Payable is debt. You are leveraging your vendor’s money. However, at 30 days they withhold deliveries and production falls by 1%. Your production costs go up as workers stand idle during parts shortages. At a 60 day policy production falls by 8%. At a zero day policy there are no shortages. Given your measures, what will your AP policy be?

4) Current Debt is typically used to fund Inventory and Accounts Receivable. However, those accounts could also be backed by Retained Earnings. what has been/will be your policy towards Current Debt?

5) Long Term Debt is used to fund Plant and Equipment. However, you could use equity (Common Stock plus Retained Earnings). If you eliminate Long Term Debt, its interest payment will disappear, and earnings will go up. However, the profits used to pay off the debt essentially went into the bondholder’s pocket. You could have paid dividends to shareholders instead. What has been/will be your policy regarding long tem debt?

6) In the competition--During the last 4 rounds ---the market will continue to grow. Chances are you would need to make significant investments in new plant and equipment. How will you fund these?