Please answer all questions.
Case Study - Supreme Inc. You have just joined the Supreme Company as a financial analyst, reporting to the Controller. Based upon your recent business education at Humber, which included a wide range of subject areas, your new boss has asked you to help her review the recent changes in the manufacturing area. Until recently, the company had offered only a limited number of standard electric motors for sale. They had purchased raw materials and the lowest level components, but produced most of the subassemblies and all of the finished products in their own plant. The company's profitability had declined over the years and marketing believed that customers needed both more variety of product and lower prices. In early 2014, the manufacturing division had been assigned the task of recommending changes to accomplish this dual goal of increasing variety and reducing costs. Manufacturing had recommended that they change their strategy to: Buy (rather than make in-house) most of the subassemblies. As tooling-up to produce a much wider variety of subassemblies, would take several million dollars of investment and 2-3 years to implement. Retaining production of existing sub-assemblies in- house was not considered viable as their volumes were expected to drop dramatically, when the variety being offered increased. Also the company needed all the existing space for the more flexible final assembly process needed for the greater variety of products being sold. Build final products to customer order. This plan had been approved in September of 2014. The plan and associated personnel layoffs were announced in October 2014, with the layoffs scheduled for December 31, 2014. The increased variety of products had been announced in October, with the first build-to-order shipments scheduled for Jan 2015. Selected Historical Results: Period Sales Labour Material Other Costs ($ '000's) ($ '000's) ($ '000's) ($ '000's) 63 104 250 252 65 66 62 2621 65 64 102 103 1061 103 255 263 64 661 69 104 68 66 Jan 2014 Feb Mar April May June July Aug Sept Oct Nov. Dec Jan 2015 Feb Mar April May June July Aug Sept 66 63 65 64 671 661 65 69 270 265 2621 254 259 2651 69 75 76 268 771 70 255 265 275 51 47 102 108 107 109 115 120 156 150 149 144) 146 147 148 641 63 35 64 290 31 65 2841 286 30 31 63 65 295 291 64 29 292 301 148 150 63 65 31 1- Calculate Labour, Material and Total Productivity (multifactor of all costs) indices, for each month and present them in a table. IE. Three indices for each month. 2- Present the 3 indices calculated in Point 1, in a line graph format. 3- Compare the 3 average productivity indices for the whole of 2014 (12 months) with the 3 average indices of July-September (only 3 months) of 2015. a) What is the percentage change for each index? b) Why do we use only 3 late months in 2015? Case Study - Supreme Inc. You have just joined the Supreme Company as a financial analyst, reporting to the Controller. Based upon your recent business education at Humber, which included a wide range of subject areas, your new boss has asked you to help her review the recent changes in the manufacturing area. Until recently, the company had offered only a limited number of standard electric motors for sale. They had purchased raw materials and the lowest level components, but produced most of the subassemblies and all of the finished products in their own plant. The company's profitability had declined over the years and marketing believed that customers needed both more variety of product and lower prices. In early 2014, the manufacturing division had been assigned the task of recommending changes to accomplish this dual goal of increasing variety and reducing costs. Manufacturing had recommended that they change their strategy to: Buy (rather than make in-house) most of the subassemblies. As tooling-up to produce a much wider variety of subassemblies, would take several million dollars of investment and 2-3 years to implement. Retaining production of existing sub-assemblies in- house was not considered viable as their volumes were expected to drop dramatically, when the variety being offered increased. Also the company needed all the existing space for the more flexible final assembly process needed for the greater variety of products being sold. Build final products to customer order. This plan had been approved in September of 2014. The plan and associated personnel layoffs were announced in October 2014, with the layoffs scheduled for December 31, 2014. The increased variety of products had been announced in October, with the first build-to-order shipments scheduled for Jan 2015. Selected Historical Results: Period Sales Labour Material Other Costs ($ '000's) ($ '000's) ($ '000's) ($ '000's) 63 104 250 252 65 66 62 2621 65 64 102 103 1061 103 255 263 64 661 69 104 68 66 Jan 2014 Feb Mar April May June July Aug Sept Oct Nov. Dec Jan 2015 Feb Mar April May June July Aug Sept 66 63 65 64 671 661 65 69 270 265 2621 254 259 2651 69 75 76 268 771 70 255 265 275 51 47 102 108 107 109 115 120 156 150 149 144) 146 147 148 641 63 35 64 290 31 65 2841 286 30 31 63 65 295 291 64 29 292 301 148 150 63 65 31 1- Calculate Labour, Material and Total Productivity (multifactor of all costs) indices, for each month and present them in a table. IE. Three indices for each month. 2- Present the 3 indices calculated in Point 1, in a line graph format. 3- Compare the 3 average productivity indices for the whole of 2014 (12 months) with the 3 average indices of July-September (only 3 months) of 2015. a) What is the percentage change for each index? b) Why do we use only 3 late months in 2015
