Complete the following exercises from the textbook:

Exercise 12-16

Exercise 12-21 (LO 4)

Put your answers in an Excel spreadsheet or Word document

Exercise 12-16Balanced scorecard.Ridgecrest Electric manufactures electric motors. It competes and plans to grow by selling high-quality motors at a low price and by delivering them to customers quickly after receiving customers orders. There are many other manufacturers who produce similar motors. Ridgecrest believes that continuously improving its manufacturing processes and having satisfied employees are critical to implementing its strategy in 2013.

Required

• 1.Is Ridgecrests 2013 strategy one of product differentiation or cost leadership? Explain briefly.
• 2.Kearney Corporation, a competitor of Ridgecrest, manufactures electric motors with more sizes and features than Ridgecrest at a higher price. Kearneys motors are of high quality but require more time to produce and so have longer delivery times. Draw a simple customer preference map as inExhibit 12-1for Ridgecrest and Kearney using the attributes of price, delivery time, quality, and design features.
• 3.Draw a strategy map as inExhibit 12-2with two strategic objectives you would expect to see under each balanced scorecard perspective.
• 4.ForeachstrategicobjectiveindicateameasureyouwouldexpecttoseeinRidgecrestsbalancedscorecardfor2013.

Exercise 12-21Identifying and managing unused capacity (continuation of 12-18).Refer to Exercise 12-18.

Required

• 1.Calculate the amount and cost of unused administrative capacity at the beginning of 2013, based on the actual number of customers Ramiro served in 2013.
• 2.Suppose Ramiro can only add or reduce administrative capacity in increments of 250 customers. What is the maximum amount of costs that Ramiro can save in 2013 by downsizing administrative capacity?
• 3.Whatfactors,otherthancost,shouldRamiroconsiderbeforeitdownsizesadministrativecapacity?

Exercise 12-18 is below:

12-18Strategy, balanced scorecard, merchandising operation.Ramiro & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Ramirowants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Ramiro T-shirt. Ramiro presents the following data for its first two years of operations, 2012 and 2013.

2012

2013

1Number of T-shirts purchased

225,500

257,000

2Number of T-shirts discarded

20,500

24,000

3Number of T-shirts sold (row 1 (row 2)

205,000

233,000

4Average selling price

$32.00

$33.00

5Average cost per T-shirt

$17.00

$15.00

6Administrative capacity (number of customers)

4,700

4,450

7Administrative costs

$1,739,000

$1,691,000

8Administrative cost per customer (row 8 row 7)

$370

$380

Administrative costs depend on the number of customers Ramiro has created capacity to support, not on the actual number of customers served. Ramiro had 4,300 customers in 2012 and 4,200 customers in 2013.

Required

• 1.Is Ramiros strategy one of product differentiation or cost leadership? Explain briefly.
• 2.Describe briefly the key measures Ramiro should include in its balanced scorecard and the reasons for doing so.