Choosing Cost-Reduction Initiatives. The Springcrest case study provides the opportunity to explore possible solutions that illustrate sound fiscal management, and systemic improvements and choosing cost reduction initiatives.

The Situation:

Springcrest is in a precarious financial position, running financial deficits the past year and a deficit projected for next year. Below are several cost-reduction options to adopt with the goal of reducing the deficit.

Have all employees take a day off without pay.

Reduce all salaries by 5%.

Renegotiate contracts for equipment asking for more cost-savings.

Renegotiate interest rates on the existing mortgage with Neighborhood bank.

Renegotiate maintenance and lease contracts.

Increase employees share of health care insurance premiums.

Require employees to pay for health care insurance for dependents.

Reduce the employee benefit expense by replacing a pre-established number of full time employees with part-time (without benefits) employees.

reports your analysis of the Springcrest situation. Be sure to complete each of the following items:

Rank your cost-reduction choices in order by the magnitude with which they will impact Springcrests bottom line, from largest to smallest.

Discuss specific details the rationale for your prioritization choices.

Develop an implementation plan for the top three Initiatives you chose. Describe in detail the following:

What is the financial impact of your top three choices: Specifically, how much money would Springcrest save by implementing these cost-reduction choices?

How you would approach this implementation plan within the organization?

Who would you involve in the process?