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Question 2 (15 points) Read the mini-case entitled Julia's Bakery (below). Based on your understanding of the business situation, answer the following questions: Assume it

Question 2 (15 points) Read the mini-case entitled "Julia's Bakery" (below). Based on your understanding of the business situation, answer the following questions:

Assume it is summer time, Rob is hired, and Julia is not around. Before leaving for the summer, Julia wants to make sure that she designs and implements a "balanced scorecard" that can be used to evaluate the performance of her business (and accordingly, the performance of Rob as a manager).

  1. (10 points) Using the balanced scorecard format discussed in class, help Julia construct a balanced scorecard. Please ensure you come up with at least two performance measures for each of the four scorecard sub-components.
  2. (3 points) Julia's mother is an accountant by training. Thus, she is a firm believer in financial metrics. "Cash is king" she says. Convince Julia's mother by reconciling the merits of using balanced scorecard with her views.
  3. (2 points) Independent of the balanced scorecard designed by you, briefly explain the relevant costs and benefits of keeping the bakery open on Mondays (at least two each).
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JULIA'S BAKERY Julia is the sole owner and manager of Julia's Bakery, which was started 14 months ago. The bakery is located in a high-trafc retail area, near a large shopping mall. It is not a large shop, with only a few tables available for sit down. Almost all business is takeout. In addition to coffee, the bakery sells a variety of baked goods, but predominantly European- style croissants, bread, and pastries. Julia's employees include two bakers and some miscellaneous part-time counter help. Julia also receives \"help\" from her mother, Patty, who will not accept any money from her daughter. Patti is a retired accountant, and now takes care of all Julia's accounting needs. Patty, while well intentioned and always available, is not allowed to deal with any customers because, as both Julia and Patty agree, Patty is just too \"grumpy.\" Julia's background includes training as a pastry chef. She has worked in a variety of restaurant positions, including management. She attributes her success to a \"great location\" and a \"superior croissant.\" Julia is very pleased with her nancial performance to date. The bakery has experienced dramatic revenue growth, and has been averaging a 110% increase in sales per month, over the last six months. Excluding her compensation, the business has been protable from the very rst month. According to Julia, \"Even if prots never grow a penny, I would be happy....I am making more money than I ever have, and more than I expected.\" Julia does no explicit marketing. She relies on a combination of outdoor signage, naturally- heavy foot trafc, and word-of-mouth to gain new business. Julie's philosophy is to \"never disappoint.\" Julie states: \"I have seen lots of food places start and fail. Most people are willing try something new. If people come back it will succeed. If people are disappointed, they won't come back. I have worked at some failing restaurants... and there are lots of ways to disappoint customers. I know better now.\" Julia has a strong work ethic. Julie discusses: \"My work energizes me. My success made me work even harder. My business operates from 7AM to 8PM six days a week. We are closed Mondays I need a rest. At rst, I was there every single hour. I actually start at 6AM and leave after 8PM. Now that I hired Rob, I leave early 3-4 days a week. Rob is conscientious, dependable and trustworthy. He is also well-liked by my customers. He was rst hired as counter help. He has slowly been given more responsibility and has always performed well.\" Rob is an undergraduate university business student. He is intimate with all daily operations and knows how to \"close\" the bakery, which includes all end-of-day procedures, such as reconciling the cash collected with the receipts Earn the cash register, and cleaning up the store. He is \"in charge\" when Julia is not there. It is now early March, and Rob will be entering his summer term. Julia is thinking of hiring him lull-time for the summer as the assistant manager. Julia wants to open on Mondays, is considering taking a two- or three- week vacation, and even contemplating taking some weekends off. The alternative is to simply stay closed one day a week and close the business down completely for one or two weeks, like many family businesses do. If hired as assistant manager, Rob would be completely in charge on the days Julia is absent. Julia is quite sure that he would accept and that she could aord to pay Rob for the work. Julia is extremely excited about the idea of some time off, but also quite nervous about letting Rob be in charge

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