JacelStore is a local clothing company in Selangor. JacelStore has been experiencing increased competition from other clothing chains. In an effort to improve performance, management intends to create a Balanced Scorecard. In a meeting, several measures were suggested by various managers. Management has identified a key problem. Customers are taking too long to pay their department store's charge card bills, and the company has an abnormal amount of bad debts. If this problem were solved, the Company would have far more cash to invest in store improvements. Investigation has revealed that much of the problem with late payments and unpaid bills is apparently due to disputes about incorrect charges on the customer bills. Incorrect charges usually occur because sales clerks enter data incorrectly on the charge account slip. The performance measures suggested by the managers are given below:

Total sales revenue

Sales per square foot of floor space

Sales to inventory ratio Sales per employee

Sales to total assets Customer satisfaction with accuracy of charge account bills from monthly customer survey Customer wait time for service Travel expenses for buyers' trips Average age of accounts receivable Courtesy shown by junior staff members based on surveys of senior staff Unsold inventory at the end of the season as a percentage of total cost of sales Percentage of suppliers making just-in-time deliveries Quality of food in the staff cafeteria based on staff surveys Written-off accounts receivable as a percentage of sales Percentage of charge account bills containing errors Percentage of employees who have attended the city's cultural diversity workshop Total profit Profit per employee Percentage of salesclerks trained to correctly enter data on charge account slips Required:

a) Build an integrated Balanced Scorecard using only performance measures suggested by the managers. You do not have to use all the measures, but build a Balanced Scorecard that reveals a strategy for dealing with the problems with accounts receivable and unsold merchandise. (10 marks) EPPA6214 4

b) Construct a strategy map by showing the causal links (with arrows) between measures in the different perspectives, and show whether the performance measure should show an increase or decrease. (5 marks)

c) Assume that the company adopts the Balanced Scorecard. After operating for a year, there are improvements in some performance measures but not in others. What should management do next? (