IM Lucknow - Noida Operations Strategy: End Term Exam ‘Max. Marks: 50 Total duration: 3 hours Note: This exam is open book/polycopy/hand-written notes, In the interest of environment, no printed sheets or photocopies are permitted. Only textbook, course polycopy and hand-written notes are allowed. The paper contains a total of three questions, and each question has certain sub-questions, Please be precise in your analysis and answers. 1. Read the accompanying two-page case “ACC v/s DIC” and answer the following, questions: (2) What are the value propositions (for customers) of ACC and DIC? (3+3 marks) (b) What are the ‘structural’ and ‘infrastructural‘interventions that each company has undertaken in its operations and other domains that fit with its strategy and value proposition? (mention examples of both structural and infrastructural interventions for each company - ACC and DIC) (2424242 marks) (c) Are DIC’s lower cost and apparently superior performance than ACC a result of pursuing different strategy, or are they derived from more efficient operating capability? You may not have complete data to analyse and arrive at a final conclusion, but try to analyse the data/information provided and draw a partial conclusion. (5 marks)2. Consider the Kraljie Matrix (shown in the figure below) that was used in a Session to Clscuss the different sourcing practices relevant for different categories of Products/raw materials/parts/services that are in the non-core-competence set of activities for a given firm. The framework is also used to identify the Prodlucts/materials/services that are ‘strategic’ and ‘bottleneck’, and require special Considerations in outsourcing. In certain circumstances, we find some firms decide to even produce them in-house, For each of the four categories of the matrix, cite atleast one real-world example of Product/material/service from the viewpoint of a frm/industy, ‘why that product/material/service falls in that category, appropriate sourcing (or in-house Production) practices four examples in total, one for each category). give reasons as to and briefly outline the for the same. (cite at least (4444444 marks) High Leverage items Strategic items Materials mgmt. Impact / Strategic Importance of CUrCneSNg sae ee (cost, value added, Profitability, .) Non-critical items Bottleneck items Purchasing mgmt. Sourcing mgmt. Low Low Complexity / Risk of Supply High (monopoly/oligopoly condition, pace of tech advance, entry barriers, logistics cost and complexity, .) Figure. Kraljic Natrixa ee Several years GE has transformed its business model by deploying nologies and finding new-ways of serving customers. It has done t most ofits business verticals. It has transitioned from the previous ‘industry hardware product R&D and manufacturing business’ to ‘performance-based service business’. In the previous model, GE used to sell technology intensive products stich as jet engines, gas turbines, CT/PET scanners, and spare parts and repair services. In the new avatar, it sells availability and operating hours of those equipment so as to enhance performance of customer operations and business. The figure below depicts GE’s transition during 1980-2020 period. Take the example of jet/aircraft engines. In the previous business model, engine was the property of aircraft manufacturer. Airliies bought and paid for turbine engines, spare parts, and repairs. Instances.of planes getting grounded for weeks were not uncommon,.costing the airlines notonly repairs but precious revenues. In the new business model, engine-remains the property:of GE: Customer firms (airlines) pay foravailable-hours-of engines.at rated (good}'performance/thrust levels. GE performs maintenance and customer supparttoiassure high available/operating hours of engines and aircrafts. Ta carry out this service effectively, GE fits engines with loT sensors, connects multiple engines, and carries out data analysis with cloud-and statistical/Al algorithms:-With all this, it dynamically schedules predictive maintenance-and provides real-time:information to customers toimprove efficiency of their equipment and operations..Price is linked to outcomes for customer, such as hours of aircraft availability. Notonlyis GE tightly integrated with its customers through digital:technologies, but its-service employees and engineers interact with customer employees on a regular basis: This model reduces risk for customers and generates constant revenue streams for GE. in = Expanded Service Outcomes Optimized Assets & Operations 2 : = Contractual [Use oT, network of machines, data . Contract Service Agreement & people + cloud + big data £ (CSAs) analytics + security + mobility to £ provide decision suppor services 8 Ops met, preventive Transactional maintenance & repairs; Break / Fix Share risk, reducing total cost of z ‘ownership & Sell parts & repairs 2020 1980 Figure. Evolution of GE service models— a TT Discuss the new capabilities GE must have developed in the following domains in order to support its new business model: (2) Sales approach/process and skills of sales people (b) Customer service/support ’ ot (4) Domains of knowledge and approach/process of R&D/technology developmerit (4) Technology vendor selection and management (e) Operations and supply chain (343434343 marks)MANAC Quiz 2 Case Questions: Aussie Pie (sm) 1. Construct a Balance Sheet as on 31° Dec, 2005 2006 (10M) 2. Prepare an Income Statement for the year ended Dec 31, tot 3. Construct a Balance Sheet as on 31: Dec, 2006‘7TB0101 eqn 7285 THUNDERBIRD 2 THUNGE woot (Graeme RANKINE Aussie Pres (B) / i atic al snack foot Fert discovered meat pis the ™ onal snack wile te i Onavisiero Australia, Anna Amphlett of Australia. During their visit to Sydney, Melbourn oo gore ao B * arin peo meat pes, parculaty at SPO such 25 : canna oer een eitiy washed Fw with vast quan tics of ice-cold beet. ‘They ead to explore the possi establishing @ business in ‘Seattle’ Pike Place there OY Nessie jnake and distribute meat pis "Aussie Pies. They had trademarked ee ancial rake or geturning, to the US in case they “decided to launch the Tew busines: Wien inane Pree toes, Amphlett and Ferris would have fo prepare a detailed business plan to obtain ou ing. ‘Amphlett wo! valuable retailing experie Seebucks’ business including personnch Sear eeantane by training, worked ag an assis Corporation, where he had became familiar with the financial side shed at Starbucks Coffee Corporation ip Searle, Washington, where she gained at ria regional managet. She had been sr ived in many different aspects © monly chain, production, and business ‘development. Ferris, freadquarters of Tully's Coffee ‘controller at the Seattle oF retailing and customer service- ‘Australian Meat Pies $ ith minced (ground) beef and gravy iF = is ‘consumed as 8 aod snack in Austral consumed ot aian culcuce and has been decribed by forme! ‘New South Wales Premier Bob Carr as scr etl consume an average of 45 meat pies per Year vily ‘cai “nana sik The mee Te rand Four Twenty Pi produced 50.000 Bie Ps hea, The meat pie is hea er tian Rules ool, rghy lege, and ates ‘of che most popular convunae whe waching game! The me pty abou four inchs in “diameter and traditionally consumables wh coma eauce (aka comato ketchup) andi usual ied by a FRAC has ashore rust botcom and flaky pasty tp and is usualy accompanied by aco beer! Operations “Amphleee and Ferris decided to locate the first outlet in Pike Place Market destinati cours ‘Seattle, particularly international tavelers who were curious abou eopeln nee al il wing 7 fod: rt in oir counties Gn Exhibit 2 ot cteures location). Since many a eravelers were between 30 and 50 years of aga Conscious of their diet, they decided incernehe pies with high-quality, low-fat beef thar had been range eo tsa They woul alse From Wikipedia. hie Widest 2 fp: swengelsk.com/COOKING/AustralianFood.htm. igha © 2006 Thunderbird. The Garvin School i proud by Profesor Graeme Rankine forthe pu of International Management. All rights reserved. This apr h ‘his documenta asd fr se on Pe yn rotPrkash Sigs PRO 1aNUAM99 ot aan nett of ‘of Management - Lucknow rom May 2023 to Oct 2023,ens doug had been raised on ranches chat used no hormones or insecticides. They would rane’ ad atksting and sales campaign emphasing the use of high-qualiy ingrediens Using beef 90 ant, gh en meet ncaa. ba inp Oa ‘would be more appealing foods, -conscious global travelers capable of paying a premium for superior quality snack fi ‘They also decided to make the pies fresh at the store rather than serving customers with reheated, Products This would occasionally mean disposing of unsold pice, but Amphlett and Ferris decided that reheating meat pies caused the sauce filling to permeate the pie base and make the pie soggy: They ‘would also enable customers to callin their orders so that the meat pies could be made fresh on demand. ___ Thestore would emphasize strict hygiene and sanitary conditions in making and serving the meat pies. Amphlett and Ferris came up with a design for the store in which the meat pies would be made at the back of the store with a glass wall panel separating the front section so that customers could see the spotlessy clean facilities in which the pies were made. They felt that this would enhance the customers’ perception that Aussie Pies was a premium product using high quality ingredients and produced under impeccably sanitary conditions. Although the business would intially produce only the standard meat pie, they decided to explore the possibility of making and distributing specialty pies such as steak and kidney pies, meat and sun- dried tomato pies, chicken and potato pies, and even Barramundi pies“ These products would be old in smaller quantities and require custom production techniques. Amphlect and Ferris also decided to ‘explore baking and distributing fresh breads including wine bread, Barramundi bread, and Bodalla cheese bread? Ferriss experiments in making wine bread had been quite succzssful, so they decied to initiate discussions with the makers of the popular Australian vvine, Yellow Tail, about co-branding the new wine bread. “Amphlert and Ferris also decided that if their fist-sture were successful, chey would open addi- Fo enn a ae ccsuah, Washington, and they would consider supplying large retail_ yt) cchains such as Costco Wholesale Corporation.” lo Tat Initial Business Setup 6v Esuablishing the new business would require ouside financing Through Fecrifs workin the controller's Fie tells Colle he had developed an exelent working lationship with Al Ross a Puget Sound Seat ache Conaxively agreed that a bank loan of up to $1 milion aan interest of6% per Yearould be pos Bat Rom indeed dh th bans loan commie wold wan along wrt ote cums aa ein including a complete set of projected financial statement forthe frst yea of operations, (30, ale ith an income statement, statement of cash flows, and a balance sheet. 42080, Based on market research, they decided co set the price of Aussie Pies £825 pepo they hea nally contemplated rating the store, equipment, and fotues, they now decided to buy a ae oe faaes with 4,000 square feet of space would enable the busines o produce and distribute abi 30,000 pisdper ‘month under normal operating conditions. “Afeer much soul-searching, Ferris decided to quit his job at Tully's Coffee to devote his fulltime energies to the new business. To reduce risk, Amphlett decided to maintain her job at Starbucks but cnet the business on weekends and at nights. If Aussie Pies were successful enough to expand operations, she too would work on the new business fullime, SE TA barramundi is a popular fish with Australia consumers. Ic is usually pale grey-grecn with a ‘thmmon and ean grow to a maximum length of2 m (6 f. 7 in.), weighing up to 60 ig. (130 Th); specimens eg5-6 kg, (11-13 Ib.) are more commonly seen, however (http://en.wikipedia.org/wil Bareeaundl) THEI cheese, a popular cheese with Australian consumers, is made in Bodalla, Australia. . 2 ‘TBIOL ecuentis waboted for ae ony nProtPrakae Sng IPNO-ISMATEO at nan Ist of Management - This a s - 3 Management - Lucknow trom May 2028 to Oct 2023,- a 6. A physical inventory would be necessary to determine the remaining inventory on hand so that Tav 2 Qtr dwt Guild): 200, Pink. 140, m9 As a result of guidelines established by the company's legal advisors, Amphlett and Fertis decided that additional {events would nced to occur in the start-up phase (by December 31, 2005) of the busi- ness as fllows: 1 Amphlexe and Ferris would contribute the jointly owned land at Pike Place Market valued at 100,000, for which they would cach receive 50,000 shares of common stock. 2. A $700,000 bank loan would be signed with Puget Sound Bank and the cash disbursed to Aussie Pies immediately. 3. Cash fees for attorneys and incorporation costs to establish Aussie Pies, Inc. during the start-up phase would amount to $60,000. 4, Aussie Pies would initially, Purchase $20,000 of inventory consisting of meat, flous, spices, butter, and customer packaging for cash, The company would spend $2 00,000 in cash to construct a store building on the land they had acquired at Pike Place Market. & The company would also spend $140,000 in cash to purchase cooking equipment and outfit the store with furnivure and fixtures. 7, Amphlett and Ferris agreed that the former would retain the ttle of President and Chief Executive ae and that the latter would be the Chief Operating Officer. Both would be members of the joard of Directors. Key Events in the First Year / In order to comply with the bank’ request for projected financial statements, Amphlcit and Ferris compiled alist of the important events that would likely occur during the first year of operations. The lise included the following events: Based on market esearch, Amphlett and Ferris estimated that meat pie sales in the frst year would be about 28,000 pies per month or 336,000 pies per year at $3.25 per pie. Since some commercial customers had approached the entreprencurial couple about supplying their etal outlets, it was ‘estimated that 50% of sles revenue would be on credit terms of 30-60 days. The remaining amount ‘uncollected at the end of the year was projected to be $370,000, 2. Additional purchases of inventory were estimated te(be $410,000 during the yea. All purchases would be on credit terms of 30-60 days. It was estimated that the unpaid balance of this credit purchase at the end of the year would be $90,000, 3. The loan agreement on the bank loan called for repayment over 10 years at the end of each year Interest would also have co be paid. 4, Payroll expenses (including benefits for employees including thdse involved in making and selling th lye ximaed oes eh outa of $1000 ding th es, Slog and grea administration expenses of $150,000 were also expected to require cash outlays during the first. year 5. Additional equipment to expand future production was estimated to requirea cash outlay of $30,000. accurate measurement of the cost of making the meat pies could be determined. The company’s policy was to sell only fresh pies, so the ending inventory was expected to be zero. ‘TB1O1 3 | sasepetesinst er on ona gs PAAR tae Smale einen’ |7. Depreciation for the year was determined to be as follows: * $17,000 for equipment, furnicur, fixtures—based on an estimated life of 10 years. *+ $10,000 for buildings—based on an expected life of 20 years. 8. ‘The company’s start-up costs would be written uff over two years. 9. Amphlete and Ferris issued 100,000 shares to a passive outside investor for $2 per share to finance future expansion plans. 10. A friend of the family gave one of the company’s meat pies to famous gourmet cuisine personaly Julia Child, who showed up on the opening day and wrote a rave review in the Seattle Times the next day, Based on this review, Amphlett and Ferris thought their shares would now be worth consider- ably more and that this should be reflected in the proforma financial statements. 11. The state of Washington has no state income taxes. Federal income taxes were estimated ro be only $110,000 with 60% bei by the end of the 12. On the last day of the year, Amphlett and Fertis decided to acquire $80,000 of inventory in ancici- pation of next year’s production. Credit terms were 30-60 days. 13. Amphlett and Ferris expected to declare and pay cash dividends of $120,000. ; wd " oS tr gr © Ro \ wyer (» yee A 4 TB101 ‘pis dncuent situa ve on Prt Pak Seg IPN TGMAIO at aan tue of Management Licnow om My 2023 Oc 208,MANACIPMx-16 QUIZ1 (SecA) __MM:25 _Time: 25 minutes 1. The firm has continuously reported losses. Looking at the P&L, what expense item bothers you as a Consultant and what would be your specific recommendation on that item? 2. Although the firm has reported losses, there is plenty of Cash and Cash equivalents, Bank balances and Investments. How is this possible? 3. The firm has a current market valuation of approximately $5.25 billion but has never reported profits since inception. Comment 4. What are Loans (6c) in the Balance Sheet on the Asset Side 5. What industry sector this company could be and what specific company this could be? yeous a0t se10N IS BIL vers BELT. TIES 1z07 ‘ve uoueW weyAsat March 31, 2021 sh and cash equivalentsHarvard Business School 2 ee A book vale faa Valve Hes khan Thumbs-Up Video, Inc. In October 1988, Linda Williams was determined to open a video cassette rental store that would have a wider selection of tapes and could operate more efficiently than the few small video rental stores located in and around her hometown of Mystic, ‘Connecticut. Williams knew ‘that more than one-half of the homes in Mystic were equipped with video cassette recorders, but based on informal discussions with her friends and neighbors, she learned that these recorders were infrequently used. She felt that with this installed base of recorders, a new, upscale, well-stocked video cassette rental store would surely succeed. ‘After preparing a business plan, Williams approached a long-time friend who she felt would invest in tis new venture, After considerable thought, this friend was willing to invest $66,000 with Williams putting up the remaining $99,000 to purchase shares in the new corporation, which was to be called Thumbs-Up Video, Inc. In November 1988, Williams left her job as a real estate broker and began to establish her new enterprise. She first consulted with a lawyer to have she business incorporated.” Becase Wis Wis ¥ ~~ fairy simple organization, the legal fees incurred were only $2,700, Her next task was to find some fund and 2 building in which to operate. Her connections in real estate allowed her to negotiate a favorable price of $48,000 for a building near the center of town. The building was old and needed rxovation work. The purchase documents allocated $43,000 to the land and only $5,000 to the building, due to its age and rundown appearance. A mortgage of $33,600 was secured for the purchase, with the remaining $14,400 paid in cash. Williams felt that the current building Was Prmveturaily sound and with renovation work, the life of the building could be extended to 25 years. renovation work, costing $20,000, to begin immediately. The work lasted through She ordered the December 1988. Williams paid $5,000 in advance for the renovations, with the remainder paid in full ‘at completion of the work on December 31, 1988. In anticipation of the store’s opening on January 2, 1989, Williams began negotiations with the major film distribution companies for purchase of a rental tape inventory. By the end of December 1988, Williams had purchased 2,000 tapes (1,000 different titles) at an average cost of $50 per tape. Since Thumbs-Up Video was a new entity with no credit history, every vendor required a Personal guarantee from Williams before they shipped the tapes Yon account.” All tapes were paid sus, Pe prepared ths care unde te spersionof Pfr Willan J Br, Ja te Bass for class dscsion Ee ear eo afc andg oon mitre snaton cane pe 198 by te Pret nt Felis of HonardCaleg To re copies, el (61) 95117 o ws Co Oe bum Schoo Boson, MA O23, No of hs pbisaton maybe eroded, sted a esol in a speaties. o onomted In ay frm o¢ By ny means—ceronc, mechanical ‘photocopying, recording, or otherwise—without the permission of Harvard Business School . “= es‘thumbs-Up Video, Ine. 189199 Iarge investment, ‘Williams was certain for by December 31, 1988. Although ths represented Se ee aaa that a wide selection of tapes would ensure the success EE In December 198, equipment wots $6,700, inching # COMPUET TUTE oe to be used purchased for cash, Williams paid an addtional $1,000 fora computes TT, N40, would effi- Ey the company The softwar, which was spcifaly designed for TODDS 4 timated cciently track those tapes out on rental and those on the shelves. All of Lusefill lives of five years. Also at the end of December 0 were ordered for delivery January 2, 1989, to be paid ‘cash on delivery. provide various forms of a P an fi Williams then contracted with a local advertising agency 10 POEL fine through advertising for a period of one year. On January 2, 1989, $6,000 was pai December 1989, “The new store opened as scheduled on Jamuary 2, 1989. During the subsequent months, Williams was pleased withthe way the business was developing. Confident of the success of the store, Williams purchased another 250 tape? for $75 each on June 1, 1989. The entire amount remained unpaid at June 30. ‘These tapes were considered new releases of feature films and multiple copies (10 copies each of 25 different titles) were purchased to satisfy expected initial demand. For the six months ended June 30, 1989, sales amounted to $96,000. Due to the nature of the business, most of the sales were cash sales._A limited number of customers were allowed to charge their rentals, and at June 30, 1989, on} rot been collected from charge sales of the previous six months. Employees eared WEES of $32,000 during this six-month period. Williams drew a salary of $30,000. ~ a ~ When Williams met with her accountant at the end of June 1989, she was pleased that the bank account showed a balance of 345,500, considering that significant expenditures were made just to get the business started. She wondered if she should declare a dividend as a signal to her investor friend that the business was doing well. The accountant reminded Williams that certain accruals, including interest on the mortgage of $2,900, still needed to be made before dividends could be declared. While discussing the results of the business through June 30, 1989, Williams and her accountant puzzled over how to account for a certain item, They knew that the tapes held for rental had a physical life of three years, and the cost of the tapes should be amortized over that period. However, they were unsure how to account for the new release tapes. They had the same physical life, but the initial demand (which warranted 10 copies of each title to be purchased versus the usual 2) was sure to wane significantly after only one year on the shelves. Williams felt that most of the revenues from these new releases would occur in the first year, and thereafter the store would derive little or no benefit from 8 extra copies of the same ttle. This matter of the amortization of new releases and several other resolved before financial statements of Thumbs-Up Video, Inc., could be ‘enol. —e v™ 199.493 'UMbS-UP Video, inc, Required Exercises L i at Construct a set of T accounts to record the transactions elias oooered Thumbs-Up Video, Inc., is peta 1988 through Jue I ee bs- Prepare a Statement of Financial Position as of June 30, 1989, for Thum! Up Video, Inc. ic ii ation t for Thumbs-Up Video, Inc., from incorporal marr eeeWy L 4 narvarp|pusiness| SCH? 9-902-401 ey: MAY 24, 2004 wietzan 5 anus Maria Hernandez & Associates In june 2004, Maria Hemandes found herself out ofa job forthe second time in six months, As she left the building that had housed her failed dot-com employer, carrying @ ‘small box of personal belongings, her mind was already embracing a plan that would have her start her own bUSSTees At Teast in Ret ow business she would contol part of her own destiny instead of being subject © the decisions of others. Hernandez was a graduate of the Massachuset advertising agency where she specialized in advertising layout, she used part of her savings to fake > technical course in webpage design. Her first job after completing her training was with 2 startup retail dot-com that ran through it intial cash and loans in less that one year. It ook her only One reek to find her latest employer, but in less than six months it had folded, too. She loved her work a8 Wwebpage designer, and she had confidence in her own abilities and ski. Her art training allowed her to blend design, color, and webpage layout in attractive and effective ways. But having been ‘bumed twice by startup dot-com employers, she was also reluctant to go to work fora third. Within days she had put together a simple business plan to create a webpage design consultancy to offer webpage designs to anyone. She would head the company and employ other designers e+ well to meet demand, There were plenty of potential customers in Boston, and she knew that several Of her former colleagues from art school could be interested in the better pay that webpage design could support. On June 20, 2004, she transferred all of her savings, $30,000, to a new bank account with the company name, and two days later she added $20,000 borrowed from her father to the account. After that things moved quickly as she rented a second floor offce for $3,000 a month, paying one month's Tent in alvance as a security deposit to apply to the end of the lease, and $3,000 for July 2004. She purchased some used computer equipment with software from her last employer, and ordered Fiationary and office supplies that cost $5,000 when they were delivered on June 29. Maria Hemandez & Assoxntes opened or business on Ty 2 2007 Abou Maria was not an accountant, she took stock of her company's financial position as she to seek her first contracts. ‘The company had spent all but $12,000 of the cash that had been put into the bank account, but it had some assets as well. sR ‘Assets Liabilities and Owner's Equit ‘Gash in bank ‘$12,000 Loan $20,000 Office supplies 5,000 Maria's equity "30,000 Equipment and software 27,000 Prepaid rent 6,000 _Prepaidrent 0 ofr Wiliam Bars pepe tics, HDS cases ae developed soy athe basis or ae iscusion. Cases are nt Pre an atone tecie ence anagem, no een evens aera en cae negara congo ce ir tt ob arr fee eames rae ae, se Re Dae Seg ne Ses Spec eat wt aio en daring mrdng or obernne—witout the pron of Harvard Danes Sh ‘mean-—electronic, mechanics,. ean Maria Hemandez & Associates Maria was alittle worried th i a atthe cash had gone so quickly, but she also had confidence in herself and her willingness to work hard. aimee In the first few days, Maria lined up two webpage design projects from local businesses. She spent Part of each day working on the projects, and the remainder of her time was spent looking for new clients. By early August she had four other designers at work and a steady stream of new work foming in by way of referrals. She also felt far too busy to attend to any financial aspects of the business. When clients paid, the money went into the bank account. The associates were paid weekly, and she paid rent and other bills when they were received. In the ninth week of operations, Maria's father telephoned her to ask how things were going, and she could not answer the question with any ‘confidence. It was time for an accounting, and the end of August would be a good time to do it. Hemandez found the following i she ring the two iths of Pera following information she had accumulated during the two mont 1. Clients had paid $40,000 for completed work, and two clients still owed a total of $7,000 for work that had been completed and delivered to them. There were no projects underway as the office closed on August 31 for the Labor Day weekend. 2. Additional otfice supplies had been purchased for cash of $900, and office supplies and stationery that had cost $4,200 were still on hand. 3. Rent of $6,000 for August and September was paid in cash. Utility bills, a repair of equipment, and the salaries paid to designers (including Maria Hernandez) were paid in cash totaling $33,000. 4. Additional equipmerit and software was purchased on August 27 for $11, 000, with half of that amount being paid in cash and the remainder due one month later. ‘As Maria Hernandez thought about the first two month's operations, she was perplexed by the fact that cash in the bank had decreased by $5,400 even though she was sure the business was operating profitably. She also wondered how to account for the following: 1. She had agreed to pay her father interest on his loan of 6% per year, but no interest had been aid so far. 2. The equipment and software were working out well, but Hernandez knew that they had a technological life of no more than three years from tne time that she had purchased them. In brief, Maria Hernandez felt that the first two months had been successful, but she was puzzled about how to draft meaningful reports to mail to her father. Questions 1. How would you have reported on operations of Maria Hernandez & Associates through ‘August 31, 2004? Had the company made a profit as Maria Hernandez believed? If so, how ‘would you explain why the cash in the bank has declined? 2. How would you report the status of the business'on August 31, 20047 50) Seo | —Le shou g a sx $l6od = Té 50 Myers A Z Gah exits Gpired LONE PINE CAFE (A) oa a 31, 2016, the firm that had been organized to operate the Lone Pine Café was lissolved under unusual circumstances, and in connection with its dissolution, Preparation of a balance sheet became necessary. The firm was formed by Mr. and Mrs. Henry Antoine and Mrs. Sandra Landers, who had become acquainted while working in Portland, Oregon, restaurant. On November 1, 2015, each of the them contributed $16,000 cash to the firm and agreed f share in the profits proportionally to their —tontributed capital (ie., one-third each). The Antoines’ contribution represented practically all of their savings. Mrs. Landers’ payment was the proceeds of her late husband's insurance policy. On that day also, the firm signed a one-year lease to the Lone Pine Café, located in nearby recreational area. The monthly fenton the café was $1,500/ This facility attracted the partners in part because there were living accommodations on the floor above the restaurant. One room was occupied by the Antoines and another by Mrs. Landers. The partners borrowed $21,000 from local bank and used this plus $35,000 of partnership funds to buy out the previous operator of the café. Of this amount, $53,200 was for equipment and $2,800 was for the food and beverages then on hand. The partnership paid $1,428 for local operating licenses, good for one year beginning November 1, and paid $1,400 for a new cash register. The remainder of the $69,000 was deposited in a checking account. Shortly after November 1, the restaurant was opened. Mr. Antoine.was the cook, and Mrs. Antoine and Mrs. Landers waited on customers. Mrs. Antoine also ordered the food, beverages, and supplies, operated the cash register, and was responsible for checking account. The restaurant operated throughout the winter season of 2015-2016. It was not very successful. On the morning of March 31, 2016, Mrs. Antoine discovered that Mr. Antoine and Mrs. Landers had disappeared. Mrs. Landers had taken all her possessions, but Mr. Antoine had left behind most of his clothing, presumably because he could not remove it without warning Mrs. Antoine. The new cash register and its content were missing. No other assets were missing. Mrs. Antoine decided to continue operating the Lone Pine Café, She realized that an accounting would have to be made as of March 30 and called in Donald Simpson, an acquaintance who was knowledgeable about accounting. In response to Mr. Simpson’s questions, Mrs. Antoine said that the cash register had contained $311 and that the checking account balance was $ 1,030. Ski instructors who were permitted to charge their meals had run up accounts totaling $870. The Lone Pine Café owed suppliers amounts totaling $1,583. Mr. Simpson estimated that depreciation on the assets amounted to $2,445. Food and beverages on hand were estimated to be worth $2,430. During the period of its operation, they drew salaries at agreed-upon amounts, and the payments were upto date. The clothing that Mr. Antoine left behind was estimated to be worth $750. The firm had also repaid $2,100 of the bank loan. Mr. Simpson explained that in order to account for the owners’ equity, he would prepare a balance he cH would list the items that the firm owned as of March 30, subtract the amounts at itity of the three shareholders. owed to outside parties, and the balance would be the ea! Each of them would be entitled to one-third of this amount. LONE PINE CAFE (B) In addition to preparing the balance sheet described in Lone Pine Café (A), Mr- eed the accountant agreed to prepare an income statement. He said ‘that such a financial statement would show Mrs. Antoine how profitable operations had been, and thus help her to judge whether it was worth while to continue operating the restaurant. Mr. Simpson learned that cash In addition to the information given in the (A) case, d to($43,480)and that cash received from customers through March 30 amounte payments were as follows: Monthly payments to directors* $23,150 ‘Wages to part-time employees 5,480 Interest 540 Food and beverage suppliers 10,016 Telephone and electricity 3,270 Miscellaneous . 255 Rent payments 7,500 *one-third to each. Questions 4, Prepare a balance sheet for the Lone Pine Café as of November 2, 2015. 2) Prepare an income statement for the period of the café’s operations through March 30, 2016. 3. Prepare a balance sheet for the Lone Pine Café as of March 30, 2016.22 G Akash Bator oe Poll Ne- TRMK 16004 Management Accounting Quiz-1, IPMX (Term-IV) Time: 30 Minutes, Max. Marks = 25 (Note; All questions carry one mark each. Encircle the correct answer) 1Which of the following defines variable cost behavior? Total cost reaction Cost per unit reaction | fo ini in activi to increase in activity a. remairig constant remains constant ‘mains constant increases increases increases si ‘increases remains constant . 2. When cost relationships are linear, total variable prime costs will vary in proportion to changes in. — XK tirecs labor hours. (eh b. ‘material cost. — ‘total overhead cost. (H Production volume. 3, Which of the following would generally be considered a fixed factory overhead cast? Straightline Factory _Units-of- production | depreciation insurance depreciation | no no no yes yes noe yes no 4, Anexample of a fixed cost is ‘a. totaf indirect material cost. %. cost of electricity. 97 straight-line depreciation. §5.Which of the following always has a direct cause-effect relationship to a cost? Predictor Cost driver yes no if yes ‘dno no ‘5A. What are non-cost elements i.e. not part of cost sheet: (Name a few), | 0 / oeSac TPMX 16 006 pj EO ZA) © A cost driver peed fixed costs to rise because of production changes. 8 direct cause-effect relationship to a cost. © can lict the cost behavior of a vari c arable, but nota fixed, cost i \ 4._ ian overhead cost that causes distribution costs to change in distinct increments with changes in production volume. 7. Product costs are deducted from revenue @. as expenditures are made. b, when production is completed. ‘goods are sold. <—\—— | [to minimize taxable income. 8.Which of the following is typically regarded as a cost driver in traditional accounting practices? a. mumber of purchase orders processed b. iber of customers served SE of transactions processed number of direct labor hours worked, . 9. When a company is labor-intensive, the cost driver that is probably least significant would be a. direct labor hours. ‘b. direct labor dollars. \ ‘machine hours. cost of materials used. 10. An activity driver is used for which of the following reasons? Tomeasure demands ‘To measure resources consumed oe mee $, fee \ 46 fe dno no 11, The fesm cost driver refers to - ‘any activity that can be used to predict cost changes. - the attempt to control expenditures at a reasonable level. ‘who gathers and transfers cost data to the management accountant. ce. the person d._ any activity that causes costs to be incurred. 12, Cost allocation bases in activity-based costing should be a. cost drivers. b. yalue-added activities. ‘6 no activity centers. id. processes. 1 Traditional overhead allocations result in which ofthe following ination? ‘2 ead costs are assigned as period costs to manufacturing operations. ervvalume products are assigned too much overhead, and low-volume products are ined too little overhead. » ; PMrlume products are assigned too much, and high-volume products are assigned too little overhead. d._ The resulting all Hocations cannot be used for financial reports.uw \ 14, Traditionally, Overhead has been assigned based on direct labor hours or machine hours. What effect es this have on the cost of a high-volume item? OVer-costs the product b. under-coste-the product © 10 effect the product cost cost per unit is unaffected by product volume 15.ABC should be used in which of the following situations? a. single-product firms with multiple steps ae b._multiple-product firms with only a single process \Tnultiple-product firms with multiple processing steps 4,‘ all manufacturing firms 16) Cost drivers are A) the different functions in the value chain, B) different types of functional areas in the firm. veri is of activities that require the use of resources and thereby cause costs \ different types of cost calculations 17) What happens when the cost-driver activity level decreases within the relevant range? A) Total fixed costs increase. B) Fixed costs per unit of cost driver decrease. ‘otal variable costs increase. \ K Dy Variable costs per unit of cost driver are unchanged. 18) Which of the following costs is a fixed cost? _Digrctasiy ingredients used to produce ice cream tion expense on factory building \ el used by delivery trucks D) labor wages of workers who mix dairy ingredients to make ice cream 19) An increase in total variable costs usually indicates that A) the cost-driver activity level is decreasing € cost-driver activity level is increasing, ) variable costs per unit is decreasing D) fixed costs per unit is increasing 20.Abnor1 loss of material are charged to: Prime cost ) production overhead b) Material cost Tahun > rebar = vs om a they all exp = Jemere Prd ech = yt ae 4 beh (Rn) Deb Ghd) €Tooo> Int Bebcton = moe \\o owe Nek fufit cs naseofeMeh us ors ~ (Vag ———— | nee |! oo Thad eyed pepe 7 | Neb anee = 233,207 a4 | is lawton Shoat term toe , At Ne Thade recioihs 330,09 | 30k oon Vo bene CoS a Toatennt- Tavestor, = Us, ne om = Spe Gal- 280,00 > View0o Sele paveive = V7.6 ride 2 mo ean amen =. To, ore S Pay pall (Dm Adon cep 5 (Ce, ms Ts > écap (802, mrAle Ratan rottno: LiMn léaok IPMX-16, Term-t 10 ITC Quiz-2 (MCQs) _ (Fri. 02-June-2023) CLOSED Book/ CLOSED Laptop_ 1. Which of the following is NOT.a valid use of a two-variable Data Table in Excel? ® comparing the results of two diferent formulas (B) Analyzing the sensitivity ofa formula to based on different input values changes in two variables simultaneously Estimating the range of possible outcomes for a (DY Applying different formatting styles to the cells given set of variables in the Data Table 2. What is the advantage of using a two-variable Data Table over Goal Seek in Excel? ® tis faster and more efficient in finding the It allows for simultaneous analysis of multiple optimal solution. independent variables. It offers greater flexibility in changing input ©) It provides a more precise and accurate values for analysis solution for optimization 3. How does Excel's Data Table assist in decision-making processes? ® By automatically generating charts and graphs (©) By performing statistical analysis and for data visualization generating summary statistics By applying complex mathematical algorithms (©) By providing a systematic approach to + to optimize solutions - ~ analyzing diferent scenarios __ - 4. Chulbul Pandey wants to know the total number of characters in his name. Suggest him the function with arguments, which he should write in EXCEL to extract the same ® Teieg("Chulbul Pandey") + 1 Rept("Chulbul Pandey") - 1 Len("Chulbul Pandey") - 1 © Countblank("Chulbul Pandey") + 1 © None of the above 5, What is the purpose of a data table in Excel's What-f Analysis? ® To display the results of a single variable in a To perform mathematical calculations on a table format range of cells Z analyze the impact of changing multiple ©) To create a visual representation of dats using variables on a formula charts and graphs| BwWN PR 5 You want to enter a formula in cell C3 that can be copied down to reti formula must use three Excel functions, what would they be? 2. FIND VALUE ® aya anda 3, and 4 £) 1,4,andS 7. When using the FIND function and the second argument for ‘within text’ is: following are correct? B [em 250 Amar Akbar Anthony 2125 Mugle Azam | 85 Hera Pheri | ‘urn the title of each DVD. If the ‘2.LEN 3.LEFT 4.RIGHT 5. 1,3,and4, © 1,2,and5 © 1,2,and3 "Microsoft Excel", which of the (A) =£INR("o", "Microsoft Excel",6) returns 5 © =FIND("o", "Microsoft Excel") returns 2 8, The output of formula: =TEXT("03-June-2020","da'" (A) wREF! error © wwatuel error 9. Which of the foll '=FIND("e","Microsoft Excel") returns 14 =FIND("T","Microsoft Excel") returns 9 4 Qo © HNULL! error lowing scenarios is best suited for using Excel's What-lf Analysis? future revenue based on different (@) Comparing the performance of different Qrarecasting pricing strategies (© Creating visually appealing reports and presentations 40. if cell C22 contains the text: departments in an organization © Analyzing historical sales data and identifying trends “My name is Chulbul Pandey", which of the following formula would correctly retrieve ‘is Chulbul' from C22. (By CLEFTIRIGHT(C22,18),10) =PRINT(C22,10,9) ©) =mID(LEFTIRIGHT(C22,25).1).9,20) Dy -wcurtverT(c22,18)20)ITC Quiz-t (mcQs) _(Fri, 12-May Sse | ITC Quiz-1 (MCQs) Fri. 12-May-2023) CLOSED. Book/, CLOSED. Laptoy 1. Which of the following is true for VLOOKUP function st column of the lookup table lust contain the key(lookup value) data © The first column in lookup table must ©) be sorted in descending order 2. You are creating a billing ay that he tot ® royrdup ‘eiling 3. Ifyou ® =a Or-na8-"881 4.In order to pass arvarra typing the formula lication for a Pharmacy shop, The first colum! numeric in nature ‘the requirement gi Th All of the above @) n data should be ven by the shop owner is ve rounded to the next higher iculating the total b ould be ing Heationat to be paid by customer should De foun TT formula will Be le of 10. For example Rs 132 should be rounded to Rs 1140. Which rounddown © floor to combine the contents of cells A1 and Bi with a da Alas or functions will accomplish that? ch between them, which of these =CONCATENATE("AL-B1 ® =CONCATENATE(A1-B1) 7 ® cTRL+ SHIFT + ENTER © SHIFT + ALT + ENTER yy to @ formuta which key combination should be pressed after + SHIFT + DOWN ARROW KEY © cRL+ALT+A 5, Which of the following 1s NOT the feature re dare example of good modeling practice ® ® altthe range should be properly Named ‘The format of cell should be as data type ofthe © The cell content 6. Cells E5:E12 give the act the first 8 yrs the prod! thlumn F, we want to compute the Sch year, e.g., for Year 3 cumulat Afi the cell formula should be visible worksheet should have the clear indication ‘of constant, variable and calculation sections in the sheet Juct was on the market. In ca fe 213. To efficiently compute cumulative £2 5847 1d copy from cell FS to F6:F12 which of the following formulas: 1. SUM($E5:E5); II, SUM($E$5:E5); ® U, Wand Iv © 1, Wand Seow Vv IL, SUM($E5:$E$5); IV. SUM($E$5:$E5; cumulative sales for jive sales were 77+ ual sales of a product during Ti gal Seles _Curmulative Sales Acta [giscs Ll ae By les o wialulole miei jpieieleie iste ea exses Tand IL © tony © None of the above© os we want to compute total revenue in pra should we enter in cell G12? Not contain any + signs! 8. In the worksheet, cell G12. What for Your formula mu: = Sou opent 2 Sle x Me) 9. Which of the following name is NOT a valid range name? ® ramesh “aramesh (_ © tamesha2 © ramesh 10. a aa For the following sequence of operation(s}, what will be the output in B2 1. In Ai, enter Current Investment. 1 2. In A2, enter =B2. 3. In B1, enter Total Investment. 4. In B2, enter =2 + A2. Value! ' © 10 #N/A ' © None of the above03/05/2023 Name: _Q\ Roll No: LP Mx1g00¢ ; OPERATIONS MANAGEMENT -— 1 PRE-MIDTERM QUIZ Pon motes Max. pm 20 ‘Weightage: 5% ustrated answers attract better credit. Maximum marks as shown. rely repeat the lectures. You need not fil all the space available. Properly structured and reasonedill Closed book, clased notes. Do not m iB a [5 marks] hen/ Why would a firm prefer to use a higher di f technology/ automation in its operations a firm prefer to legree of By! a : ¥en though quantitative econiomic analysis suggests using lower technology’ automation? a olytee of Aechnobyy Jaden is used cohen the Qiame 21 maby « Stoker Wrolucl coidhenk any ip fierst on ne Curtrmnizedion dean it costs fo Ncheare ib6 beocluc hon gail Ay od Hele cost et Br Loye odin. Tf He aha a Somme amclan is Aasseitis be wge lowe techwolyy| @4 ime bin och ann 1g tei fr 9 highe cleyite of Lechnleyy [auivrnchron= He Lecion ma PEMD hie reahete a a “4 ro Burne hionah We ems of Product Pualiby on 4 achiseldevelsh a bef a Irertick te bifeondste Weel. Geom coher boa 2. marks : ~ OVer the course of several months you’ visit the neighbourhood snack shop at Fandom times )>* during operating hours. You observe that there is an average of about 8 customers awaiting or 3% _— undergoing service in the shop, and that it takes you about 15 minutes to get in and out of the ~2 “© shop from initial entry to final exit. Ifa typical customer spends about Rs.125 per visit in your . 4 ¢% assessment, estimate the shop's hourly revenue potential. 3 qoe © rie wwe = 8 - J a " Fr = Iyha WIP 5 Bate? TH: % 250.QIha, TA pation Abnels (2 for winih, Pe hourly Kavenve «ill be, SIWAB_- ace mi 03/05/2023 3. [5 marks] porevtist Product” market situati a Improvement” be an appropriate ¥ “ ip Approach to product Goh uation(s) Would “Packaging ion? When Td es) He Comes is wai M be bouth de Te ai a a beaduch Creldeiy, - Packing Tmpoverent ill be ao PN here a tbc be oat efechves Chenin He ending Abo meshing tee fn Produc Holes, sail ve. ty HORS Techwoloyy [andomation in ida freducdin, charge He basic thael hue do higher dhertarcllachir vrg ceatly br Auch combing, f, / bok ey Ulan, fall 2% Esme YA ey, ides dang Tb Medes, Hee frodbec He bef way ail be by Pectajig ch ) becae b ally He pralecl cit bo Vong cantly ha Hen | Wharces if foc stall fsbe do pe dere, Hes Aeduch thes cay escue hee , nhac e devel of Ga bomehion Corb cuit he vay Li Wa as a Identify the pertinent (ensformatiog) in a passenger sili Aight, St~inctide a I-line explanation of each answer Foleo Ges — fit ly achin, shel cher facil ty > Gadomalenice dip — Meal beeing, | et A ti SE ecg Php A Qoasi Menufechiary, - ta. x 4 ne i ‘9 @INDIAN INSTITUTE OF MANAGEMENT Lucknow - Nowa IPMX Academic Year: 2023-24 IPMX. Term-m1 End - Term Examination “Applied Marketing Strategy” Time: 180 Minutes Max. Marks: 50 INSTRUCTIONS 1) This is close Book and close notes Examination 2) Please be specific in your answer as per class discussions 1. In brief writ : : QI. In brief write the major tearning’s of Abbott Case study as discussed in class or 1. In brief writ i ; QI. In brief write the major learning’s of Clinic Plus Case study as discussed in class (word limit 200 words) @5) Q2 A) What is the research method to choose the winning concept card and product sample for next stage of new product development (word limit 100 words) B) After subtracting first action behavior (that is of previous month) from second action behavior (that is of the current month), following table is generated for money and recency: M Recency > 181+ 90-120 61-90 31-60 30 (ie Money Days Days Days Days Days (units) + ! L S. » = 25+ Units S| -33 —eh- 5-4 = 25 = lagek 10-24 Units ae — 4-9 U 3 | ee = 3 alts 2 [200 Jt mw on ereber TUnits b [+200- =89 J \Whatis your interpretation ofthese five numbers generated tha are given the diffrent cells. Explain it with logic? Lateney for this organization is 30 days.imps, tures commercial pu mae mmercial pump Onn Ao -) Krishna Pump is a Pithampur, near Indore based Indian company: It mi usiness such as a big-ticket item eee tes et water thorough cof ; ised to pressurize and d Pipelines. Its application is virtually in any indus nat cio a run its B purified water ind is vitally in any industry that requires ground water to ike builders), industry (like Bisleri), cold drinks industry (like Coke), construction Industry unt Agri-based industry, chemical indus ke co alr of them requit 7 ground water For example, purified water ndare gsc ry equine he mot oop per Tequired the least. Currently, the market has nech@™iea, Pun? avestment, Though, some believe ump. Industries in the competition are making 259% %'8%ryps in the market had some technical issues ~ ae the mark up of 25% makes more sense. Commercial PO's change in temperature--can result in pump an Se ai « dine in Fell At @ minimum, the major surge will bring a ae vlpalisc bs Reorosching nett spony renee eee aceon hous to eestart, Worst Ass, the major surge will mangle a pump so badly that ittakes 7 OO Teplace at a cost and total cost of major surge can reach Rs 30000 figure. However major sur8® probability was just 0.2 compare to minor surges. Interestingly, last year itself average potential customer (Groree had experienced 5 such minor surge incidences. ‘The minor surge Was possible to be repaiced it RS 5000 only. Krishna pumps new first surge- controling machine was introduced. Initially, their mathemat°elly-controlled version was litte better than the mechanically-controlled versions that eliminate only Pot! half of all surges on a pipeline. As they gained experience making it 90% more effective than M2 _ devices in major surge and 100% more effective in the minor surge. Customers who have ra the product report being very satisfied with everything but the price.Although, mechanical pumps had 4 years of life, but a mathematical one had | year t of Krishna pump is atthe fixed cost of Rs 25002000. of extra life. Consequently, the manufacturing cost of *' ‘Whereas, variable cost is Rs 90000 per pump. However, investment done by the company isto the tune of Re 52524000. They expect the sales of 2000 units this year. No one else can manufacture this type of Product, however, since no one else Knows the equations that enable it to work so effectively. Further, another added feature of this new pump resulted in substantial electricity consumption. Being a five star rated pump it will result in 10 units of electricity consumption per hour compare to older one of 15 units per hour pet pump. Each commercial electricity unit cost approx. Rs 1 per unit to commercial Petablishments. Higher water-consuming industries would run this kind of pumps for 20 hours in a day against low water consuming industry average of 10 hours per day. One of the competition had undertaken ‘2 PSM study and concluded that consumer optimum is Rs 2,00,000 and company optimum is Rs 550000/- " However, a marginal point of cheapness is Rs 180000 and marginal point of expensiveness is Rs 6,20,000/- ‘What ere the different price(s) of this Krishna pump/s) that you can arrive at? Which one of these prices ‘you will suggest to Krishna Pump? What do you understand by Price Sensitivity meter pricing?