StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Manager Tenure Issues - Case Study Example

Cite this document
Summary
This case study "Manager Tenure Issues" discusses how much profit would increase by we need to calculate the linear regression with the two variables being (i) Independent. We know the correlational coefficient is the manager tenure correlation on the chart provided…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.4% of users find it useful
Manager Tenure Issues
Read Text Preview

Extract of sample "Manager Tenure Issues"

Accounting and Finance Answers Question 1(A) To calculate how much profit would increase by we need to calculate the linear regression with the two variables being (i) Independent i.e. Manager Tenure and (ii) Dependent being the Profit. We know the correlational coefficient is the manager tenure correlation on the chart provided. The coefficient is calculated as shown below; Calculate the Slope or the increase in profit per unit increase in manager tenure Where: Y = dependent variable; X = independent variable, a = intercept of regression line; b = slope of regression line, ε = error term y = 1,732.55 X = 12 a = (24,181.49) ε = 312.21 We find b (slope or Unit value of increase in profit monthly) 12b = 1732.55+24181.49-312.21 b = 25601.8/12 b= 2133.483 Profit will increase by 2133.483 units every extra month the manager stays. B. NO, The Manager and Crew tenure do not become less important determinant of profit. Using a t-test, the t-statistic is with a p-value of 0.00, implying that the coefficient on Manager tenure is statistically significant at the 5% level. The 95% confidence interval is C. The coefficient of the population is small but that does not mean that is insignificant against other factors. Coefficients only give direction of change and strength but are not comparable to other factors. As illustrated the factors are independent and mutually exclusive. The coefficient of population does not in any way affect any other coefficient or be affected. What we can derive from the population coefficient is that 3.48 is stronger tham 2.0 and 5.5 is stronger than 3.48. Question 2 2. A) Current accounting information is sufficient. Cost of production of the items varies but there is cost that is associated to unused capacity in the firm. If Einstein Inc. decides to stop production of Product to the unused capacity in the factory such as space, engineers and production managers will have extra cost on the produced products. To avoid the extra cost from unused capacity the firm would have to sell more items from the items that are performing or to release the resources that would carry this extra cost such as retrenching managers involved in production of product 2 B. The period under which the economy heats up will require extra resources to produce product 1 and 4 to the maximum output. The information given in above is not enough to make a decision on how much is maximum output as there resources need to produce any of the products is not included. Suggestion In calculating the maximum output for product 1 and 4 the firm needs to measure the maximum output of its resources (lumpiness of capacity). They need to establish the maximum capacity they can handle and factor it. The will also need to calculate the cost per unit during the maximum period considering the cost or unused capacity of product 2 and 5 and the limited capacity for product 3. Cost per Unit = Determining the unit cost of the product will enable the firm to calculate the maximum number of products they can produce for product 1 and 4 and take care of the unused capacity of other products also the firm will need to consider capacity product 3 which might increase the cost of production if the volumes reduce. 2. C) The information provided is not sufficient, as the cost of production is not separate. While, this is true the focus on products with highest ‘Margin 1’ require the company to assume that all products attract equal overhead costs. This might be fatally wrong, as time of production of any unit is not considered in the production cost. This type of calculation could end up having the firm to produce more Product 2 units at an overall negative profit. The information provided will have to be carefully separated by considering time of production or the production capacity of the items that have the highest ‘margin 1’ profit. Question 3 Boston Children’s Hospital BCH used a Ratio-of-cost-to-charges (RCC) method to calculate the cost. I feel that they would greatly benefit from using activity based costing to take care of the months when there are fewer patients visiting the campus. The time the physician spends treating one patient is not related to the cost of the treatment which means that the charges for a few patients could be surpassed by the cost of the resources employed. Activity-based costing focuses on the capacity to produce. BCH’s capacity is determined by the ability of the physician serving as many patients as possible with high charges for their treatment. Currently, BCH does not consider the possibility of offering services that have high cost while the charges are low. BCH has implemented activity-based costing in its department of plastic and oral surgery. Though activity costing will involve more variables it gives a near perfect costing of every man-hour put in by the hospital staff and also considers the departments that are not direct revenue earning department in the costing. The total cost of a service takes care of the entire hospital resources in coming up with the final cost of a service. Store24 Store24 does not use activity-based costing for their stores. In any event, this costing model would not increase profitability. The main factors that drive profitability in Store24 are not part of the day-to-day activities in the business. Competitors for example have the greatest coefficient in determining the profitability of a store. Activity based costing is essential where the factors affecting cost and profit are built from production. Store24 would not generate increased revenue if they concentrated on costing based on how much time a store attendant helped a customer to buy a product. The time spent in give a customer service is not bound by the cost of the item and it will vary from one customer to the other for the same product. Question 4 Customer service for DN is a factor that depends on several other factors such as age of store, skill levels of non-management staff, manager’s performance and the like. The customer service indicator generated should be used as the Independent variable in calculation of the effect on profit (Slope) that customer service has got in overall profitability. Using the regression equation we can calculate the effect that customer service will have on the stores performance. Y= a+ bX + ε Y = Profitability; X = Customer service indicator ; b = profitability coefficient (slope); a = regression coefficient and ε = Standard Error From the indicated data SUMMARY OUTPUT Regression Statistics Multiple R 0.950452717 R Square 0.903360367 Adjusted R Square 0.889303693 Standard Error 503348.2678 Observations 64 ANOVA   df SS MS F Significance F Regression 8 1.30258E+14 1.62823E+13 64.26558445 3.93611E-25 Residual 55 1.39348E+13 2.53359E+11 Total 63 1.44193E+14         Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept -4643954.799 741541.326 -6.262570455 6.04022E-08 -6130036.825 -3157872.77 -6130036.825 -3157872.773 Pop 1.038470415 3.359966751 0.309071634 0.758434843 -5.695053425 7.771994255 -5.695053425 7.771994255 Size 146371.7593 66650.83723 2.196097834 0.032319781 12800.4966 279943.0219 12800.4966 279943.0219 Percap inc 163616.9082 61003.21807 2.682102902 0.009640974 41363.7273 285870.0892 41363.7273 285870.0892 Urban 2397334.981 185404.0754 12.93032516 2.59382E-18 2025776.911 2768893.051 2025776.911 2768893.051 Store age -21052.03582 14176.26627 -1.485019781 0.143247942 -49461.90829 7357.83664 -49461.90829 7357.83664 Mgr Perf 355201.5397 161305.1697 2.202046844 0.031873474 31938.75598 678464.3235 31938.75598 678464.3235 Empskill 124225.6161 44087.84228 2.817684188 0.006707197 35871.60573 212579.6264 35871.60573 212579.6264 Custserv 127606.7825 16609.02206 7.682979892 2.87118E-10 94321.55851 160892.0065 94321.55851 160892.0065 Customer service an effect on in some stores more than others, as the output above shows. The level of customer service is affected by the skill level at the stores. Question 5 A. We choose the Anagene case. The non-financial information that is financialized in this case is the development of the new Anagene Cartridge. The intellectual property of the product and the effect it might have on the profitability of the company in future is financialized to. Anagene is will to take the extra cost of producing cartridge that is yet to take the market by storm. Costing of this product is the main reason why no specific trend can be established in the business yet and a new costing method is being discussed. Carrying of the unused capacity of the cartridge plugs a deep hole in the financial statement of Anagene with the cost of the product driving the profitability of the company up and down in a seesaw. It is important to maintain the intellectual information of the cartridge as unused capacity will continue to reduce as the product hits the market. The intellectual cost and other unused cost will assist the new team in determining how to develop the most effect method of costing the cartridge and stabilize the gross margin. B. Decision making on the cost of product-mix will be taken care of if the business continues to financialize the intellectual property of the cartridge. Determining the number of resources available at every product is important and the number of resources allocated to producing ‘an idle’ product – product whose capacity allocation according to Exhibit 8 is about 100%. This means the number of resources that are not being utilized is extreme high pushing the average cost of the product-mix up and reducing the gross margin. The fluctuation in demand of the cartridge and the high cost of unused capacity needs to be stabilized. The business should reduce the capacity in production of the Cartridge and increase capacity of other products. C. Variable cost of intellectual property of the production of the cartridge. The cost of intellectual property is not standardized and no measure exists to show its real or true cost. Average Margin for the cartridge could be affected because of the lack of true cost for intellectual property. Making decisions on cost that are assumed or cost which only future forecast of the impact the product will have in the business could end up causing a misreporting on the performance of the product. The associated cost of Intellectual property of cartridge will continue to diminish as production increases and more items are in the market. The spread would have to calculate on the maximum capacity or the practical capacity rather than on the produced capacity. With the first years of production of the cartridge being slack, the future performance of the items will only reduce the average cost component of the cartridge. D. The way to avoid miscalculation of gross margins because of intellectual property is to analysis the demand of the product over the lifecycle of the cartridge. Calculate the total cost of intellectual property of a cartridge from when it is produced to when it is full depreciated. With the average life of the cartridge calculate the total capacity over that period and divide the total cost of intellectual property with the total capacity over the period. Y = Question 6 First the probability matrix tells us that a customer who bought a particular category will most like by from that category rather than another category. Customers that take credit card loans are 40% more likely to get a credit card loan than those who get a car loan. This means that car loan customers are less likely to get the same loan or any other loan product the following year compared to those customers that take credit card loans. Customers who do not take any loan product are most likely not to take any loan product. With the probability of 1.0 it means that the bank will not concentrate on this category as prospects in the following year. With 100% likely would they won’t purchase any loan product investing in this category – neither – would be expensive and most likely fruitless. The expected profit from a car loan customer is 20% in year two. In year 3 with the same percentage decline of expected profit the profit will be 0.2 of 0.08 = is 0.016. This is about 1.6% expected profit from the CL Only. The advantages that this model offers are the predictability in budgeting. CBR bank can allocate resources in the sales department more efficiently as the areas they are likely to get more business are already mapped out. The reservation in this model is that areas where less profit is predicted might not be explored even though they could most like give the best output if more resources are allocated there. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Assignment Questions Case Study Example | Topics and Well Written Essays - 1500 words”, n.d.)
Assignment Questions Case Study Example | Topics and Well Written Essays - 1500 words. Retrieved from https://studentshare.org/finance-accounting/1629953-assignment-questions
(Assignment Questions Case Study Example | Topics and Well Written Essays - 1500 Words)
Assignment Questions Case Study Example | Topics and Well Written Essays - 1500 Words. https://studentshare.org/finance-accounting/1629953-assignment-questions.
“Assignment Questions Case Study Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.org/finance-accounting/1629953-assignment-questions.
  • Cited: 0 times

CHECK THESE SAMPLES OF Manager Tenure Issues

Role of Managers

The job of a manager is mostly associated with four main functions i.... It is the duty or responsibility of the manager to plan and set the goals and targets for the organization.... An effective and efficient manager is one who is also able to lead the employees along with managing them.... For this purpose, it is essential for the manager to identify elements which motivate and encourage the employees.... Controlling: The last job function of the manager is controlling....
8 Pages (2000 words) Term Paper

Cultural Differences and People Management

In the workplace, the manager is often faced with issues which relate to gender discrimination, including homophobia (Lowe, et.... Organisation activities are influenced by the relations of the employees and the way the manager would manage a cross-cultural workplace relies heavily on the accommodations made by the manager in terms of specific qualities and cultural differences.... Learning about each culture from the different employees would be a necessary first step for the manager....
8 Pages (2000 words) Research Paper

Leadership as the Process of Manipulating Other People

From a business point of view, a manager is a person, who has been given the mandate to influence the employees of a given organization in order to achieve the organization goals.... A manager should be a person who can perform the following roles; 1.... Decisional roles: An excellent manager is one who can come up with new ideas and delegate the idea responsibility to other persons.... Interpersonal roles Interpersonal skills are required, in order, for the manager to perform as a figurehead role in the organization, and this is considered to be a leading management function....
8 Pages (2000 words) Essay

Seven Top Competencies of a Project Manager

The paper "Seven Top Competencies of a Project manager " deals with the role of project management knowledge, qualifications and experience, personality tests, and performance-based competence.... A manager should encourage other staff to offer value to the client and the organization.... ole of the Project ManagerThe project manager has a significant role in ensuring the execution of the project in different areas including planning, operation, monitoring, and control, as well as ending the project per se....
4 Pages (1000 words) Essay

How Debenhams Manages the Stakeholders

This paper will explain how they use their personal, interpersonal and societal values to manage the stakeholders, including how they demonstrate their awareness of social issues and corporate citizenship responsibilities.... The paper "How Debenhams Manages the Stakeholders" highlights that the managers at Debenhams have successfully portrayed the business as taking all the necessary steps to be of service to all stakeholders....
6 Pages (1500 words) Case Study

Role of the vocational case manager within rehabilitation

The case manager plays the role of a person who act as a counselor to the person seeking help and provides services such as interviewing, planning rehabilitation programs, coordinating services, interacting with their clients, the client's employer and the client's family, setting up a rehabilitation plan of action, implementing it and following up with the client's employer, monitoring progress and solving problems. ... his study will seek to evaluate the role of the vocational case manager in the rehabilitation process....
12 Pages (3000 words) Essay

Issues as a Nurse Manager: A Comparison of Two Case Studies

This paper shall discuss two cases of nurse managers and the issues and problems they encounter in their practice.... It shall compare and contrast issues encountered and how nurse managers deal with and resolve these problems and issues.... Various studies have examined and documented the different issues encountered by nurse managers in the nursing practice.... Another research has revealed that some of the issues faced by nurse leaders relate to the present focus on specific standards of care, not anymore on the process of caring for the patient....
14 Pages (3500 words) Research Paper

How Managing Team Performance Affects the HRM Function

From this work, it is clear that every HR manager should start by playing an important role in the development of work culture and thereby leading to the formation of self-managed teams.... Among the different managers who form a part of this process, Human Resource manager's (HRM) contribution will be immense.... So, it is the human resources department or the HR manager by constituting the vital parts of the organization, who should spell out or should help the employees to find out the benefits, opportunities, growth, etc, they may get, if they continue working in the same organization....
11 Pages (2750 words) Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us