At the end of 2005, Activo Company implemented a low-cost strategy to improve its competitive position. Its objective was to become the low-cost producer in its industry.

A Balanced Scorecard was developed to guide the company toward this objective. To lower costs, Activo undertook a number of improvement activities such as JIT production, total quality management, and activity-based management. Now, after two years of operation, the president of Activo wants some assessment of the achievements. To help provide this assessment, the following information on one product has been gathered:

Required:
1. Compute the following measures for 2005 and 2007:

a. Actual velocity and cycle time

b. Percentage of total revenue from new customers (assume one unit per customer)

c. Percentage of very satisfied customers (assume each customer purchases one unit)

d. Market share

e. Percentage change in actual product cost (for 2007 only)

f. Percentage change in days of inventory (for 2007 only)
g. Defective units as a percentage of total units produced h. Total hours of training i. Suggestions per production worker j. Total revenue k. Number of new customers 2. For the measures listed in Requirement 1, list likely strategic objectives, classified according to the four Balance Scorecard perspectives. Assume there is one measure per objective.

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2005 2007 Theoretical annual capacity* 124,800 124,800 Actual production** 104,000 117,000 Market size (in units sold) 650,000 650,000 Production hours available (20 workers) 52,000 52,000 Very satisfied customers 41,600 70,200 Actual cost per unit $162.50 $130 Days of inventory 7.8 3.9 Number of defective units 6,500 2,600 Total worker suggestions 52 156 Hours of training 130 520 Selling price per unit $195 $195 Number of new customers 2,600 13,000 *Amount that could be produced given the available production hours; everything pro- duced is sold. **Amount that was produced given the available production hours.