Scorecard Measures, Strategy Translation

At the end of 20x1, Mejorar Company implemented a low-cost strategy to improve its competitive position. Its objective was to become the low-cost producer in its industry. A Balanced Scorecard was developed to guide the company toward this objective. To lower costs, Mejorar undertook a number of improvement activities such as JIT production, total quality management, and activity-based management. Now, after two years of operation, the president of Mejorar wants some assessment of the achievements. To help provide this assessment, the following information on one product has been gathered:

		20x1		20x3
Theoretical annual capacity*		249,600		249,600
Actual production**		208,000		234,000
Market size (in units sold)		1,300,000		1,300,000
Production hours available (40 workers)		104,000		104,000
Very satisfied customers		62,400		140,400
Actual cost per unit		$340		$272
Days of inventory		16		8
Number of defective units		14,560		4,680
Total worker suggestions		120		320
Hours of training		260		1,040
Selling price per unit		$190		$190
Number of new customers		5,200		25,740

^*Amount that could be produced given the available production hours; everything produced is sold. ^**Amount that was produced given the available production hours.

Required:

1. Compute the following measures for 20x1 and 20x3:

a. Actual velocity and cycle time. If required, round your answers to two decimal places.

	20x1		20x3
Actual velocity		per hour		per hour
Actual cycle time		minutes		minutes

b. Percentage of total revenue from new customers (assume one unit per customer). Round your percentage answer to one decimal place (for example, enter 4.628% as "4.6").

20x1	%
20x3	%

c. Percentage of very satisfied customers (assume each customer purchases one unit).

20x1	%
20x3	%

d. Market share.

20x1	%
20x3	%

e. Percentage change in actual product cost (for 20x3 only). Enter a decrease as a negative value.

20x3

%

f. Percentage change in days of inventory (for 20x3 only). Enter a decrease as a negative value.

20x3

%

g. Defective units as a percentage of total units produced. Round your answers to two decimal places (for example, enter 4.628% as "4.63").

20x1	%
20x3	%

h. Total hours of training.

20x1	hours
20x3	hours

i. Suggestions per production worker. Round your answers to one decimal place.

20x1	per production worker
20x3	per production worker

j. Total revenue.

20x1	$
20x3	$

k. Number of new customers.

20x1
20x3

2. Match the appropriate strategic objective to the measures given below.

Strategic Objective	Measure
	Unit cost reduction (%)
	Percentage of new revenues
	Revenue
	Percentage of very satisfied customers
	Market share
	Number of new customers
	Cycle time/Velocity
	Percentage defects
	Days of inventory
	Training hours
	Suggestions per worker