Question
Pariksha Commerce Test Ltd. (PCT) is an organization which provides service of test series of various commerce courses to facilitate students who are going to
Pariksha Commerce Test Ltd. (PCT) is an organization which provides service of test series of various commerce courses to facilitate students who are going to appear for such examination. PCT provides test series for 11th & 12th standard (Commerce) for CBSE as well as various other state boards; B.Com., B.B.A., M.Com., and M.B.A. of various universities; CA, CS and CMA. Companys Head Office is placed at Delhi NCR with branches and Test Series Centers (TSCs) in various cities of India. Now it is the only organization which provides test series of various courses and guidance of study and has students across India.Outsourcing of print was costly and time-consuming option, so that we had mailed question paper to all of them to save time and cost. Now this approach has been applied at the most of the TSCs i.e. students come at TSC, we mail them question paper and they appear for test. It saves our printing cost. It has also started online test series facility for students of remote locations who do not have access to travel at any of the TSC. In addition to Test Series, it provides support in preparing a reading plan, providing guidance on paper writing and counselling students, if required. You are appointed as Cost Management Officer (CMO) of the PCT. In the Introduction Meeting, CEO, Mr. Parikshak, after brief introduction of organization addressed you, We are rapidly growing education empire and having large student base across India. To reach here, we have faced lot of problems, but it has been overcome. I want to share few of them to make you better understand the organization. Recently, at the biggest TSC, in Delhi, printer was not working and there were almost 450-500 students sitting and waiting for question paper. Outsourcing of print was costly and time-consuming option, so that we had mailed question paper to all of them to save time and cost. Now this approach has been applied at the most of the TSCs i.e. students come at TSC, we mail them question paper and they appear for test. It saves our printing cost. Irony is that non-maintenance of Printer can also save the cost! It may be little difficult for students to read question papers from their mobile phone or tablet, but they will be comfortable soon as Change is the law of life and Business too! Further to reduce advertisement cost, we have dropped the contract with Ms. Takshi Sharma, famous film star. We had contracted with her for advertisement on TV for 3 years. She was brand ambassador of Pariksha. Though we got many students due to TV advertisement, we decided to drop the contract as we have enough students and as of now, there is no competition, as such, hence no need to advertise for coming 1-2 years. These are the major problems we faced and changes we made during the year. Hope this set of information will be helpful to you to commence your work. Till now, we have managed cost management department very well, as you can see from the instances I narrated, however due to heavy workload and growing organization, now we are unable to handle these all alone, so we need your support in success of the organization. Further, we have reduced cost of question paper preparation. Up to last month we had, preciously, 57 members in question paper preparation team. They were drafting new questions for every test. Now we are having, preciously, 22 members in such team, less than half of we had. They are drafting less new questions and preparing paper with questions from past papers and other material of respective course. In our student support and student counselling team we had, preciously, 68 members, 42 for face-to-face counselling and 26 available on phone call. Now there are only 30 members, 12 for face-to-face counselling, and 18 available on phone call at our most profitable TSCs. This may require less infrastructure facility at our few TSCs which is cost beneficial for us. Oh, I forgot to tell one of the reasons behind reducing advertisement cost is that, after analysis of financial statement, our CFO had suggested that our advertisement cost was comparatively higher than other companies working in education field as well as with our previous years. These are the major problems we faced and changes we made during the year. Hope this set of information will be helpful to you to commence your work. Till now, we have managed cost management department very well, as you can see from the instances I narrated, however due to heavy workload and growing organization, now we are unable to handle these all alone, so we need your support in success of the organization. Thanks for listening me and you are free to ask anything, anytime. Thanks. After conclusion of his speech, you thanked him back and moved to your office to start work. You were thinking about strategy of paper less question paper, misuse of mobile phone or tablet during test and other matters as told to you. In that moment, your phone had buzzed, a notification from Newsagram, an application providing news across world. Notification was about the contract between Abhyas Education Ltd., giant educationist of India and Mr. Shamkar Datta, a film star having one of the highest fans following all over India, regarding advertisement of newly introduced test series by it for commerce and science stream across India. After proper analysis of new competitor and its products, you informed to the CEO. Discussion and various meetings had been called and after that CEO decided to do more marketing to defeat the competitor. For that the CEO approached new brand ambassador, namely Mr. Prakash Rao, more famous film star than Ms. Takshi Sharma and Mr. Shamkar Datta. This deal was little costlier, still to be in market it was required. Now the CEO is feeling that some blunders have been made by him in handling of cost management department. Hence, he approached you to analyse various decisions made. Further, he asked you to apply any of the value chain analysis or value shop model to deal with the situation, as he thinks both are the same. whether approach of the organization to manage the cost is of the Traditional Cost Management system or the Strategic Cost Management System.Discussion and various meetings had been called and after that CEO decided to do more marketing to defeat the competitor. For that the CEO approached new brand ambassador, namely Mr. Prakash Rao, more famous film star than Ms. Takshi Sharma and Mr. Shamkar Datta.
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