(a) The year end is 31 December.(b)The comparative figure is for the same month in the previous year.(c) ROCE is an annualized figure.(d) YTD means year to date.There are additional performance indicators not available to the board that line management use for a more detailed picture.Additional performance information:Cod Electrical Motors (Cod) manufactures electrical motors for some of the 24 different European domestic appliance manufacturers. Their motors are used in appliances such as washing machines and refrigerators. Cod has been in business for over 50 years and has obtained a reputation tor producing reliable, low-cost motors.Cod has recently rewritten its mission statement, which now reads: ?Cod Electrical Motors is committed to providing competitively priced, high quality products, with service exceeding customer expectations, We will add value to our business relationships by investing in product development and highly trained personnel.?The board has recognized that its existing key performance indicators (KPIs) do not capture the features of the corporate mission. It is worried that the staff see the mission statement as a public relations exercise rather than the communication of Cod?s vision.The monthly board papers contain a simple performance summary which is used as the key performance measurement system at that level.Example of board papers for November 2017:Cod Electrical Motors Key performance indicators for November 2017

(a) The year end is 31 December.(b) The comparative figure is for the same month in the previous year.(c) ROCE is an annualized figure.(d) YTD means year to date.There are additional performance indicators not available to the board that line management use for a more detailed picture.Additional performance information:

1. Figures are year to date with comparatives from the previous year quoted on the same basis.2. FTE = Full-time equivalent staff numbers.3. Post is considered vacant if unfilled for more than four months,4. Complaints are logged and classified into the four categories given when received.5. Number of customers where Cod holds preferred supplier status.

Required:(a) Assess whether the current key performance indicators (KPIs) meet the expected features of a modern performance measurement system.(b) Explain how the performance pyramid (Lynch and Cross) can help Cod: s board to reach its goal of a coherent set of performance measures.

(c) Evaluate the current system using the performance pyramid and apply the performance pyramid to Cod in order to suggest additional KPIs and a set of operational performance measures for Cod.

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This month YTD Comparative Profit ($m) Free cash flow ($m) Return on capital employed (%) 2.1 3.4 12.4 25.6 1.9 17.6 1.6 11.8 11.7 Note 2017 2016 Activity No. of orders 2560 2449 No. of deliveries 1588 1660 Staff 1226 No. of staff (FTE basis) No. of staff training days 1229 2286 1762 No. of vacant posts 3 11 17 Customers No. of orders with a complaint late delivery 26 25 product quality 39 31 customer service 21 24 other 52 43 Preferential supplier status 14 12 Production New products begun in year to date in development at month end 4 3 launched in year to date Quality internal failure costs ($'000) 3480 2766 external failure costs ($'000) 872 693 2.