Case Study 1

The management in Unilever plant in Ontario is preparing for a change. The company plans to improve energy efficiency to help manage the rising and unpredictable energy prices. The plant produces margarine and other vegetable oil products. The cost of energy represents 15% of all production costs. The company expects that the cost will increase further in the coming years, as the energy price are expected to increase further. To meet an aggressive goal of reducing energy consumption by at least 6% per year, the plants energy team has implemented, and carefully documented, 120 projects since 1999, saving more than $4.2m in costs (based on 2006 prices), and avoiding about 23,000 tons of greenhouse gases.

One of the solutions was to invest in new technology a reverse osmosis (RO) system that would enable significant, measurable improvements in the efficiency of the steam plant operations. In the first year of operation, Unilever calculated that the project would lead to net savings of $378,166 (based on 2006 prices), even after accounting for the full cost of operating and maintaining the RO system. It is expected that the technology will pay for itself in less than 16 months.

In order to verify whether the savings by implementing a new technology is significant, the company decided to conduct a research. The objectives of the research were to examine whether reverse osmosis (RO) system is beneficial for companies in the region. It is decided to select a few companies. The list of all companies was available. The management accountant has classified the list into; a) manufacturing, b) extraction and c) other companies. Samples are selected randomly from of these groups.

Based on the above case, answer the following questions.

Question No. 2

1. What type of information is required for the junior level, middle level and top-level management in the above case, for decision making? [3 Marks]
2. Briefly explain the sampling method used in this case study. [2 Marks]