C6. Each of the rest of the chapters in this text includes a cookie company case that allows you to explore operating your own cookie business. For this chapter, you will form a company team and assign roles to team members. As a team, you will prepare a mission statement; set strategic, tactical, and operating objectives; decide on a company name; set cookie specifications, decide on a cookie recipe, and answer some questions about product costs.

REQUIRED

1. Join with 4 or 5 other students in the class to form a company team. (Your instructor may assign groups or allow students to organize their own teams.)

2. In researching how to start and run a cookie business, your team found the following three examples of cookie company mission statements:

To provide cheap cookies that taste great with fast and courteous service!

To make the best chocolate chip cookies that anyone has ever tasted!

To hand make the best in custom cookie creations!

a. Consider which of the mission statements most closely expresses what you want your companys identity and unique character to be. Why?

b. Will your business focus on cost, quality, or satisfying a specific need?

c. Write your companys mission statement.

3. Based on your mission statement, describe your companys broad long-term strategic objectives:

a. what will be your main products?

b. Who will be your primary customers?

c. Where will you operate your business?

4. Your team made the following decisions about your business:

To list expected expenses and revenues for the first six months of operations

To keep expenses low and generate enough revenues during the first two months of operations to have a positive cash flow by the third month

To develop a complete list of goals, objectives, procedures, and policies relating to how to find, buy, store, sell, and ship goods and collect payment

To rely solely on the Internet to market products

To expand the e-commerce website to include 20 varieties of cookies over the next five years

Match each of the above to the following components of the planning framework: strategic objectives, tactical objectives, operating objectives, business plan, and budget.

5. as a team:

Determine the name of your cookie company.

Determine team members tasks, and make team assignments (e.g., mixer, baker, quality controller, materials purchaser, accountant, and marketing manager).

Assign each task an hourly pay rate or monthly salary based on your teams perception of the job market for the task involved.

Give the plan compiled thus far to your instructor and all team members in writing.

6. As a team, determine cookie specifications: quality, size, appearance, and special features (such as types of chips or nuts), as well as quantity and packaging.

7. As a team, select a cookie recipe that best fits the companys mission.

8. As a team, answer the following questions and submit the answers to your instructor:

Will your company use actual or normal costing when computing the cost per cookie? Explain your answer.

List the types of costs that your company will recognize as overhead.