Key Performance Indicators for a Travelling Agency, Adjustments, and Monitoring - Assignment Example

Key performance indicators for a travelling agency, adjustments and monitoring KPI ADJUSTMENTS MONITORING The number of new clients acquired If the rate of customers acquired is increasing, then the firm is sure that the firm is doing well. In order to increase the number of customer, the travelling magazine company should conduct a demographic analysis of prospective customers and then develop a strategic marketing plan This performance indicator can be monitored quarterly in a year. The number of retained customer If the rate is going down, there is need to respond to customer complaints and follow up on the reasons that could have lead to the drop This performance should be monitored monthly with the target being to retain as many customers as possible. Rate of Sales If this rate is low, the travelling magazine company should know that this is an indicator that the services are not appealing to the customers and for this reason, there needs to be a special promotion. This KPI should be monitored quarterly Revenue Increase in revenue indicates that the company is performing well and vice versa Revenue as a KPI can be monitored at least twice a year Access to the magazines This will involve monitoring how long it takes for the magazine to reach the target audience. If it takes over 10 days to reach the customer, then access is an issue. The company should then aim at bettering its distribution channels so that the customers get the magazines in time This should be monitored quarterly Assessment 2: case study i. Major problem causing the issues The major problem in this work set up is that employees are experiencing work related stress as a result of working for very long hours and heavy work load. As a result of this, the employees have been exposed to depression, drop in their work performance, headaches, fatigue, and feeling of being overwhelmed by their work. The employees are unable to cope with the pressure of meeting the demand of their jobs as the demand is greater that what they can actually manage. ii. Two solution to the above named problem There is need for the company to recognize this work related stress issues after which, it should resolve through: Discussing these issues with its employees and getting their views on how to resolve these issues Develop a stress management policy together with the employees Reducing the need for overtime through employing new staff or even restructuring the tasks Seek the advice of a health professional when need be iii. How to assess the workload for each employees To assess the work load of each and every employee, the manager should consider using a VIP Task Manager which is a software that allows the manager to track all the tasks of an employee, assess their work load and identify those employees who are overloaded and make adjustments through reassigning some of the tasks from the overloaded employees. This software allows the manager to track all the tasks of an employee right from their computers. iv. How an manager can support their employees Ensuring that employees have a safe working environment Ensuring that all employees are well trained for their jobs which will make it easy for them to cope with the job Exercising a participative style of leadership which will motivate the employees Listening to the grievances of the employees and taking appropriate action to resolve these issues. Ensuring that workers are not overloaded with work by employing new employees v. Factors to consider when delegating tasks to the employees The skills of the employee- before delegating tasks to an employee, it is important to consider whether they have the required experience and skills to get the work done or whether the employee has the ability to learn the required skills in time to accomplish the tasks. Motivation- an employer is likely to get better results if they delegate tasks to an employee who is highly motivated to get a job done in time as compared to an employee who has no interest at all in that job. Workload- the manager has to consider the workload of the employee who is being delegated to. Even if an employee is motivated and highly skilled, they will not be able to effective accomplish the tasks delegated to them if their work load cannot allow them. Besides being unable to accomplish these tasks, it can leave these employees with low level of morale. The employee should be conversant with the issue at hand which will make it possible for them to accomplish the delegated tasks. The employee selected should have a desire to take responsibility, grow and have autonomy. vi. Long term, impact on the store if the issues are not addressed Loss of customers or low retention rate -this is as a result of poor customer relations, lack of meeting customer orders and long waiting time Reduced sales- as a result of lost customers, the number of sales is going to decrease Labour turnover and absenteeism- since employees have workload, this exposes them to work related stress and eventually, they may stop coming to work or even resign. Low productivity-employees who are overloaded are likely to have low production levels Closure of the company- if these issues persist, the company may be forced to close down vii. How team members can be encouraged to participate in solving the problems The employees can be encouraged to fill in anonymous questionnaires in which they can give their suggestions on each and every issue they are facing. The company can put up suggestion boxes where employees can drop their comments and complains in relation to the problems they are facing Employees can be allowed to form informal groups and even select their representatives who can air their grievances on their behalf The managers can ensure a conducive environment for dialogue where employees can openly discuss the issues they are facing with their employers and subsequently resolve them Employees can be allowed to join labour unions where their issues can be well represented Assessment 2: project Plan Internal/external factors Required resources Admin issues Consultation Support and assistance evaluation Customer Relationship management Competitors ,management, customers Marketing researchers, financial resources Ensuring that all staff are involved in the plan Marketing manager Training on public relations and interpersonal relationships Number of customers acquired Timely delivery of customers orders Competitors Financial resources, time Ensuring that employees are able to deliver all the customers orders in time Production manager, marketing manager ensuring that the customers orders are worked on as soon as they are received to avoid backlog Reduced number of customer complains Effective queuing system Service time, queuing time Human resources, financial resources and time Reducing the queuing time Adding more employees and more service points Reduction in the size of the queues, reduced customer complains Equipment maintenance Time, financial and human resources Ensuring that the machines are in good order to enhance production Production manager Constant maintenance of the equipment to reduce rate of breakdown Reduced rates of machine breakdown Brochures ordering Suppliers Financial resources Ensuring that the brochures are ordered in time Marketing manager Reminding employees to make this orders after a particular period of time Timely delivery of brochures Timely banking Banking time Human resource Ensuring that all deposits are made to the bank in time Finance manager Appointing one particular staff to make all the deposits Banking all the deposits in time Case study Question 1 Profitability Gross margin ratio= Revenue – Cost of goods sold Revenue 2010 = 124, 800 – 74, 880× 100= 40% 124, 800 2011= 156,000 - 93, 600× 100= 40% 156,000 Net margin ratio= Net income ×100 Sales 2010 = 20, 800 ×100= 16.67% 124, 800 2011= 29,120 ×100= 18.67% 156, 000 Profitability ratios measures how successful an organization has been in the business of making profit. The profitability ratios (gross margin and net margin ratios) include all factors that influence profitability whether under management control or not. The higher the ratios (gross margin and net margin ratios) the more effective a company is at cost control. In our case, the gross margin ratio is constant (40%) meaning that not doing well since its profits are not increasing and at the same time, the ratio is not that high. On the other hand, the net margin ratio has increased from 16.67% in 2010 to 18.67% in 2011 which is an increase. However, this ratio is too low therefore fat freddie fab frogs is not performing well. Liquid ratio Current ratio= Current assets Current liability 2010 =135, 200 = 2.6 52,000 2011= 403,520 = 5.6 71,718 Quick ratio= current assets- inventory Current liability 2010= 135, 200-83,200 =1 52,000 2011= 403, 520-208,000 = 2.7 71,718 The liquid ratios (current ratio and quick ratio) measure the liquidity of a company. These ratios indicate if a company is liquid and its ability to pay its current obligations on time when they fall due. From the above analysis, the company’s current and quick ratios are increasing which represents improvement in the liquidity position of the company Question 2 Ned Kelly News agent Cash Budget For January-June 2011 Particulars JAN FEB MAR APRIL MAY JUNE Sales 24, 675 26, 250 28, 875 27, 300 29, 610 30, 765 Cost of sale Fairfax news 3344 3,553 3657.5 3344 3762 3971 Newscorp 3502 3708 3811 3605 3708 3811 Stationary 2400 2200 2000 2100 2200 2450 Cadbury 764.4 784 833 813.4 852.6 901.6 Expenses Depreciation 400 400 400 400 400 400 Rent 1935 1935 1935 1935 1935 1935 Light & power 715 715 715 715 715 715 Petrol 120 120 120 120 120 120 Phone 340 340 340 340 340 340 7175 7175 7175 7175 7175 7175 How can Ned Kelly News agent do to monitor its budget? The company should purchase budgeting software because by adopting technology, Ned Kelly News agent will be able to monitor its budget better because with only a mouse click they can look at daily, weekly, monthly, and yearly budgets. Moreover, Ned Kelly News agent can use this software to estimate revenue and give you estimates of cash flow on all of these time line Internal factors that could impact upon the budget Revenue Expenditure External factors that could impact upon the budget Market conditions Legislative changes Measures to undertake when sales are declining and cost is increasing The company should minimize it direct costs such reviewing processes and system to minimize wages or negotiating lower prices with their suppliers Examine its price strategy so that the product’s price can be competitive but skill profitability The company should offer excellent customer services to increase its sales Question 3 Ned Kelly News agent Cash Budget For January-June 2011 Total budgeted sales Jan Feb Mar April May June Total Jan 24, 675 14, 805 - - - - - 14,805 Feb 26, 250 6,90 15, 750 - - - - 15, 750 Mar 28, 875 2763.6 7, 350 17,325 - - - 27, 438.6 April 27, 300 - 2, 940 8085 16, 380 - - 27, 405 May 29, 610 - - 3,234 7, 644 17, 766 - 28, 644 June 30,765 - - - 3, 057.6 8,290.8 18, 459 29,807.4 Total 167, 475 24, 477.6 24,477.6 28,644 27081.6 26, 056.8 18, 459 11641.4 Importance’s of Budget Control It is a tool of comparing the actual results with that of the budget It can be used as a tool of comparing actual performance in terms of budgeted performance It ensures that the capital employed at a particular level is kept at a minimum level It can enable the management to conduct business in the efficient manner It is a guide to the management in the field of research and development in future Most appropriate colleges to discuss budgetary changes Accountant Sales Manager Production Manager Purchasing Manager Development Manager Measures to undertake when sales are declining and cost is increasing The company should minimize it direct costs such reviewing processes and system to minimize wages or negotiating lower prices with their suppliers Examine its price strategy so that the product’s price can be competitive but skill profitability The company should offer excellent customer services to increase its sales Reports that can improve budget in the future Firm Activity by Month report Inventory Report by List Price report Market Activity Report by Area report Read More