teehee arenes 2mm at Die tearm eames ‘2a epee ote ce 1 mp in-band ab a py i ec 2 Pomc ing mt at waaay noma 5 truce sett une rheometer afc pepe hy aap ge ‘stn shasta ets ie egenen au hn pone oe pe1. company informationBefore Maddy continues with the next phase of its growth plans, the board has asked you for advice relating o performance reporting at Maddy. The board wants you to evaluate whether the current performance report (Appendix 1), which it uses on a quarterly basis is fit for purpose. The board has instructed that you are not required to evaluate the performance of any aspect of Maddy’s busines [yt peter t In 20X8, the fist Maddy franchise restaurant established ina neighbouring country was opened. This restaurant is geographically close to Maddy/s warehouse from where it distributes food items to ils own restaurants and franchises in its home country Food items can move freely ‘between the two countries and there are no tars or administrative barriers to doing this, Maddy usually negotiates fied prices with food supplors for one year, <0 it is also able to fx the price it charges franchisees for food items forthe same period. The franchisee in the ‘neighbouring country, while accepting that it must purchase all food items trom Maddy, has asked that ibe charged for these atthe market price it would pay for the nearest equivalent ‘product in its own county, The Board has asked you to evaluate the franchisee s proposalips DASE 2 = 9/9) x) a0 1 Pevomance reper (wsaay/5000__Yesrtodsie G3 GEG Yearte 36 November > XS RXS XS OHS wx 200 2K > Mader owned restaurants: esto alee: * 5 ingesens 0 ae 8 ee (Gesarg preaves 3 7 7 1 2 3 2 Tacos of sales a sau ao ae Gress prone tes toe 3 aT tar See aay onchised restaurants: 1 Revenue 1 Taltancnne fees waa Q ° 1 [see ormgeaens os sas 8 ° © Coster sles 2 2 cestormgresens a a) ° 0 2 Ongang suppor costs wa eas ° ° Gress pote wa ° ° 5 Note 4 - Frannie ees an income tom sale igre payable tony fom ranches 2 /Not 2 Coats meured by Mato provlangngedeis an et up and orgong css Pancisess. 2 [Whole company: 2 Revere 5490194766 ner 7009 1400 as Be Way ew wes 2088 1 Return on captal employed (ROCE) ome ie eGR 4 aoa) ounea restaurants 8 2 2 $ "Ner-tmancial performance meabure (3): leaniness ar 28s Food done tne 35 3080 Note 9 Aierage rang uta sore ots(2 Ronen oma) [B) ta now September 2, “ oe report tothe board ot Macey to respond tts Instructions for work onthe folowing areas (0 perfomance reporting 14 mae) (1 minenum pertormance eval: cleanness Note: thr are 10 mars eae forth fe pt ofthe workrequoxon tie ares and @ mars avablor te secon part ofthe were asie on is oe mats) (iy ranserpreing proposal mais) Professions mrs ibe sarc forthe damonsratan of si comin, ana an aviation, seam and comma seaman your oma) 1 ont [5 # ety Fong cc 2 at ween Pr (Dcampe name 1. capa om ats ny ot ec cin Meh teeter 2 Soca tengo Discrete 1 pena ona onan pat ens Beene 1+ comeayetemaon Motch plc a rete based in Teoland. The company ofers a complete optical care service including eye tests andthe prescapion and supply of contac lenses, spectacles and optical fds. All prescribed ome are ordered by Marich rom supiying compares. Motich’s main objecthe Is the maximisation of shareholder returns through providing: “an fcelent service which renowned for rng te bes ns eld and supplying goods of perfect Motch has several shops throughout Teland and lhe shops operate othe same processes and procedures. The Industy Moric operates in is increasingly competive where. brand Strengi fs becoming an important erical success factor and customer sasfacton is seen as ex. Other companies are increasing their acvertsina spend to enfance ther brand sienarh and are also keen fo maximise her intelectual capa by employing knowedgeable employees because such employees are seen as key in enhancing and developing brand srengtC2 becnning eee a The chiof exocutive officer (CEO) of Mortich has been concerned recently about the doctine in Morich’s operating margin. She asked Morich’s management accountant to undertake benchmarking exercise to try to ascertain if this is an indusiry-wide Issue. He collected th ‘nancial dala presented in Append for both Morich and its main competitor In Teeland, Shia forthe last financial year but has now left the company. Included wit this data are the measures ‘he management accountant felt he benchmarking exercise should adaress, ‘The CEO has asked you, as a management consuitantin ths area to complete the benchmarking ‘exercise by calculating the suggested performance measures and evaluate whether the: ‘measures are appropriate and sufficient fr ths Industry. 1) caret ate E14. Appenaix 1 Egit Format I=) 1 Jip z 1 N18 7 20 24 24 25 Suggested performance measures for benchmarking: ‘Operating promt margin growin (Customer satistaction Product knowledge training spend per employee Revenue per employes ‘Appenaix 7 Financial data for year ended 20 June 20xs: Mortieh Shiel sm sm Revenue 8.40 2184 Cost of sales 1.20 3.60 ‘Adversing costs 3.40, 6.20 ‘Other operating costs 3.00 6.00 Operating proft 0.80 eos Financing costs 0.00, 075 tax 0.22 148 Net income ose 381 other key data: Numosror empioyees 480 950 [customer satistaction 50.00% Unknown Operating profit margin (year ended 30 June 20X4) 12.00% 16.00% “Training spend - product knowledge so.som _$2.00m raming spend - manager sls so.0sm $1.00m© Roques 25 mat] Its now 1 Sopember 20%8. Respond to the CEO of Mortich's request for work on the following areas: | (@) the benchmarking exercise; (12 marks) (©) the current process (@ marks) Professional marks will be awardd for the demonstration of skil in analysis and evaluation, scepticism and commercial (6 marks) ‘acumen in your answer 1+. company informationB)2-batang sock modes The shareholders have been fold that the use of Fitzgerald and Moon's building block model for service businesses may help improve Spiggle's performance. The shareholders are not familiar with the model and nave asked you, as a performance management expert, for your advic The shareholders wanta specific explanation of each of the four determinants (qualty of service, flexibly, resource ullisation and innovation) in the dimensions block and wiry measuring them would help to imprave Spiggie's performance. Then, for each determinant, they would lke you to recommend a justified performance measure. “T3 Prepon es08 The shareholders also belle that Spiggle’s racent poor performance may be due tots reward systems. They have asked for your advice on the benefits and problems of a proposed executive share option scheme (ESOS) for the board of directors. Ta help you, you have been given an ‘extract from a racent press aticle, which includes historical data onthe share prices of Spiggle ‘and the insurance sector average (Appendix 1 Tho shareholders havo boon negatiating the terms of the ESOS with the board for somo time Subject to your advice, they are about to approve a deal where each director wil be given an ‘option to buy 200,000 shares in two years’ time at today’s market price of $1-70 per share In two years’ time, each director can’ decide whether or not to exercise their share optons ‘depending upon the prevaling share price. The directors’ basic salary wil not change following the Introduction of the ESOS,oe bdo Se eon @ Reureners 5 mats [E] Ihe now 1 Soptomber 20x6. Respond to Spigle’s shareholders request for work on the following areas (2) butang block model (amare) (by proposed executive share option scheme (2808) (mas) Profesional mais wl be awarded fr he demorstaten of skh ana and evaluation, septs and commercial acumen in your (mans)