" FERNDALE FASHIONS LTD " (A Strategic Management Business Simulation) Written by Ben Leppington, CIM, RPA Copyright (c) 1992 All rights reserved STUDENT MANUAL CONTENTS Preface (i) Chapter 1 Introduction 1 On line History 1 Chapter 2 DECISION MAKING FEEDBACK 2 Feedback on your decisions immediate 2 Feedback on your decisions month end 2 Chapter 3 USING THE MODULES 2 [FINANCE] 3 A/R and A/P Management and Policy 3 Balance Sheet 3 Changes in financial position 3 Debt 3 Line of credit 3 Short term loans type #1 4 Short term loans type #2 4 Mortgages 4 Misc. credit 4 Investment 4 Short term investments type A 4 Short term investments type B 4 Short term investments type C 4 Bonds 4 Preferred Stocks 4 Income statement 5 Ratios 5 Print statements 5 [MARKETING] 5 Franchise fee 5 Product prices 6 Promo 6 Television 6 Radio 6 Printed Media 6 Projections 6 [PRODUCTION] 7 Capacity 7 Equipment 7 View equipment 7 Buy equipment 7 Sell equipment 8 Inventory 8 Output 8 Suppliers 10 [PERSONNEL] 10 Bonus/Raises 10 Demotions 11 Discipline 11 Feedback 11 Fire 11 Hire 11 Promote 12 View 12 Records 12 Organizational Chart 12 [OTHER] 13 Advance using date 13 Competitor profile 13 Customer profile 13 Economic and Environment profile 13 History of the company 13 Mini-Cases 14 Supplier profile 14 Chapter 4 GETTING STARTED 14 Read the on-line histories and profiles 14 Determine the corporate goals 14 Prepare a SAP 15 Prepare a ETOP 15 Identify and lay out your strategy 15 Begin the implementation process 15 Examine results and modify implementation or strategy 16 Completion of the Simulation 16 APPENDIX Installing the Program onto a hard drive A1 Creating data disks A1 Products to Produce worksheet (Form #1) A1 Sales Revenue and Production Costs worksheet (Form #2) A2 Proforma Income Statement worksheet (Form #3) A3 Proforma Balance Sheet worksheet (Form #4) A3 Proforma Statement of Changes worksheet (Form #5) A3 Management Decision Journal (Form #6) A4 ETOP (Form #7) A4 SAP (Form #8) A4 Strategic Planning worksheets (Forms #9 - #12) A4 President's Annual Report to CEO (Form #13) A5 Financial Ratios A5 Forms 1-13 (blank) PREFACE This software program is for students of management and those who will be interested in strategic management. It provides the user with a hands on feel for some of the variables involved with managing a business. The intent of the program is to provide an environment where instant feedback is given in direct response to your decisions. Theoretical recommendations normally used with text book case studies of some fictitious or real company cannot be tested or applied with the old fashion text book method. With 'Ferndale Fashions Ltd' you can now test your theories and get instant feedback as to whether your decisions were correct or not. You also get the real challenge of being responsible for every aspect of the company. Unlike other management simulation software, 'Ferndale Fashions Ltd' was designed as a single user program. I believe that whenever a software program calls for a group to make decisions, a sort of group-think mentality becomes apparent. Another danger to members of a group participatory simulation software program, is the individual who is the more domineering or boastful of the group. This leader will convince the others that his decisions are the correct ones. This leaves some of the participants out in the cold and not satisfied with their simulation experience on a personal level. There is plenty of time and opportunity in life to learn how to work together as part of a cohesive team. I take the position that early on in a student managers development and especially with case studies, you need to see a direct cause and effect response from your own decisions, not those of someone else. A manager needs to learn their own style of management and it is nice to experiment with your own ideas. This simulation program is the ideal environment for such experimentation and serves as a safe place to exercise your new management knowledge and skills. This program represents many months of hard work and every effort has been made to make the program FUN! I have endeavored to take the simulation to a level of detail that will get you right into it. The many thousands of algorithms required to make the program as close to real life as possible was a challenge. The program cannot duplicate real life of course and if it could no one would be able to afford it's sales price or have the room to store the boxes full of data bases required to duplicate every possible occurrence that would face a manager over the course of a year. The program will give you control of and allow you to cover the basics of management ie: planning, organizing, directing, scheduling, staffing, asset control and more. Also, even though this simulation takes place using a clothing manufacturing plant, the decision making process and strategic planning involved is transferable toward many businesses. The simulation involves the user being hired on as President of the two year old company by the CEO and owner of the firm. You will have full control over every aspect of the company including finance, marketing, production and staffing for a period of one year. The organization of your decisions will be of prime importance, as if you forget something or neglect warning signs, as in the real world, there will be a price to pay for your mistake. You may be challenged by this program and your decisions will have immediate and or long term consequences. You will also be faced with a monthly mini-case from within the simulation and these mini-cases will test your management skills, ethics, social responsibility and judgement capabilities. You (i) will be tempted to stray from your original goals and strategies as new opportunities or threats present themselves to you. You have been hired to turn this struggling, cash-flow poor company around within one year. Can you do it? Do you have the right stuff? I want you to feel on the one hand the excitement and power of being a manager as well as the fear of what a bad decision can do on the other hand. But most of all I want you to have fun and enjoy using this simulation program. What is the best strategy? There are many successful good strategies, one will not necessarily be better than another. A successful strategy is one that follows a strategic management system. Correct interpretation and evaluation of the environment, economy and the threats or opportunities it presents with a matching of the company's internal strengths and capabilities within that environment will be of prime importance. With every decision you make, think about whether that decision is in line with the corporate objectives of the company. A hap hazard approach coupled with poor planning is a sure way to put the company into bankruptcy. Addressing the true causes for the company's current problems early on in the simulation will help a great deal, failure to identify what these problems are and the correct approach to their resolution will cost you plenty, you may even have your first management failure before the next 12 months are up. If you do have a management failure don't feel bad, not everyone is a winner the first time out on the track. If you learn something from your failures, YOU are not a failure. Most successful people have experienced failure many, many more times than they have experienced success. The instructor, if this program is used as a college training exercise, will collect all printable reports or statements for the completed 12th month of operations as well as the completed worksheets that come with the program (located in the appendix). The instructor should then examine your work and check to see that you have indeed used a strategic management approach towards the simulation and have documented your decisions in the journal. The higher the retained earnings on the 12th month the better your performance. Or, the higher the net income is the better. This does not mean that your decisions should be bottom line effect only? As, you will be penalized for making decisions that are unethical, immoral and that are not in the best interests of society. As an example, if you decide to sacrifice the environment in order to receive higher revenues, you will be penalized based on the seriousness of the situation. You will also receive bonus points for making good decisions. Bonus/Penalty scores will be shown at the end of each mini-case's completion. You can use the [SHIFT] + [PRINT] key combinations to get a screen print of the scores. So, to provide an easy method of determining an overall better strategy over one that is solely bottom line profit oriented. You will add the net effect of the bonus/penalty points to your net income as follows. Multiply the net value of the total bonus/penalty points by 10,000 and add this value to your net income. Ie: If your net bonus/penalty score is negative 10. Multiply -10 * 10,000 = -100,000, so, you would deduct $100,000 from your net income figure for the year. (ii) CHAPTER 1 INTRODUCTION. Welcome to the 'Ferndale Fashions Ltd' business management simulation. You are indeed privileged to be in a position to experience this relatively new method of management training using a computer to facilitate instant feedback on your decisions. The user of the program will be given the opportunity to make decisions and see how they impact on the company. You will see how each component of a company with all of it's operating departments work together and how they are dependant upon one another during the implementation process. In this simulation, I have designed the program to look at as many variables as practical to create real reactions. As an example variables involved with sales volume determination include the; economy, availability of replacement goods, your products price, quality of goods produced, how much you spend on advertising, your salesman's ability to close sales, your capacity to produce and or service the sale, time requirements, demand for your product and a few others. Within the simulation as a whole there are thousands of comparisons and algorithms used to provide the "realness" of the program. Not everything can be examined and included within the program, but I feel the net results provided by the program in response to the decisions and strategy you use will be appropriate for the purpose intended. It is a good idea to evaluate the current situation with the company. Determine what the strategy should be, make all of the desired changes right away and then hold many of the variables constant while playing with a few others. It is easier to measure which changes are working when just a few variables are changed or experimented with at a time. By changing just a few at a time you can see which revenue and expense elements are providing the desired results. In brief, your company is only two years old and has grown at a very fast rate. A garment manufacturer that uses a franchise distribution system to move their products. Please read the on-line history files available to learn more about Sara Ferndale, the company's history, the economy/environment, customer profiles and more. The program itself is menu driven and is easy to use. Drop down menus are available for Finance, Marketing, Production, Personnel and one called Other which contains the on-line history files and of course other options. Within some of these drop down menus, sub-menus are available for certain options. The first thing you should read is the install procedure to place the program on your hard drive as well as create a master working data disk to store your data files. Install procedures can be found in the Appendix. The second item to read would be the history files and the various profiles that are available on-line. 1 ON-LINE HISTORY AND PROFILES: The history of the company as well as profiles of the; competition, customers, economy and suppliers are all available on- line. They can be found by selecting the [OTHER] option from the main menu of the program. Use the information provided within these files to aid in the preparation of your strategic plans. There should be enough information within the history and profiles in order to identify company goals and objectives as well as to prepare a SAP (strategic advantage profile) for the company and to prepare an ETOP (environmental threat/opportunity profile). Read these files first then prepare the SAP & ETOP, before you make any decisions. CHAPTER 2 DECISION MAKING FEEDBACK: Immediate feedback: The program has been designed to show the effect of some decisions immediately. This feedback would include certain obvious moves such as buying a piece of equipment, investing in stock or bonds, hiring/firing staff, bonuses, raises, securing debt and more. Basically, most decisions that are not sale volume related will automatically be reflected into the various financial statements immediately. As an example, if you purchased a piece of equipment, cash would be credited and the equipment asset account would be debited immediately. Revenue (sales) and expense calculations (depreciation) will not be shown until you use the Advance Date option. Monthly feedback: By using the Advance Date option located within the OTHER main menu selections, the program will look at all of the decisions and changes you have made for the month as well as the default positions of every aspect of the company and calculate the revenue/expense items for the month. You can print out any of the available financial statements for any period at any time as well as view a current set of financial statements, ratios etc on your video monitor. CHAPTER 3 USING THE MODULES: Pressing the cursor arrow direction keys will move and high- light the main menu options. While a main menu option is highlighted, you can drop down an options menu by pressing [ENTER]. The first option on the drop down menu will then be highlighted. Using the up/down cursor arrow direction key will scroll and highlight the options. When an option is highlighted, you can select this option by pressing the [ENTER] key. Sub-sub-menu options can be selected by pressing the option number only or by pressing the option number following by pressing the [ENTER] key. This latter procedure usually is required when option numbers are greater than a single digit. Ie: to select option 14 you would type in a 1 and a 4 and then press the [ENTER] key. Any sub-menu 2 that has more than 9 options available will require this procedure. [FINANCE] ACCOUNTS RECEIVABLE/PAYABLE MANAGEMENT: You have complete control over the company's receivable and payable policies. Unlike other simulation programs, I have allowed a real world flexibility concerning what policies you would like to use for these very important aspects of the company. You have complete freedom to set policy for both a down payment requirement with sales as well as when the balance due is expected. For an example, if you want to set company policy that requires a 10% down payment with sales orders and the balance to be received in 1, 2 or 3+ months from the date of sale, you can. The same applies to accounts payable. You can create policy only during the first month. Once set, it will be used for the duration of the simulation! Be careful with your payable policy, if the company is too delinquent or your payable become too high the suppliers will cut you off! Franchise fees and the bulk stock ($34,970 ea) that is sold to a new franchisee will be collected immediately and are not governed by the A/R policy. BALANCE SHEET: From the FINANCE main menu option, selecting Balance Sheet from the pull down menu will display the current year-to-date balance sheet on your video monitor. To see past period balance sheets, you will need to print them out using the print option of the main menu. STATEMENT OF CHANGES IN FINANCIAL POSITION: Selecting this option will display the current changes in financial position statement. DEBT: Selecting this option will bring up a sub-menu which displays 6 options and include Line of Credit, Short Term Loan type 1, Short Term Loan type 2, Mortgage, misc. forms of credit available and exit. To secure credit the bank will examine your financial statements and make a decision based on your current credit worthiness. If your ratios are not up to par or if your overall financial condition is too risky, they will reject your application for credit. The monthly payment on these loans will be automatic by the program and will vary depending upon the amount and type of loan. Each type of loan carries a different lending rate and is based as a percentage over prime. The prime rate for the life of the simulation is set at 10%. Once a loan has been secured, it cannot be paid out early. The lender requires a repayment period of at least one year. Line of Credit: You can make arrangements with the bank for a $500,000 line of operating credit at any time during the simulation. If your cash balance ever reaches a negative number of -$200,000 YOU WILL GO BANKRUPT !! and the simulation will end. The bank draft will hedge your cash balance by 1/2 a million dollars and will buy you some time. If your cash balance is positive, a repayment of overdraft used will be made when using the Advance Using Date option. 3 S/T Loan type #1: You can apply for a loan up to $100,000. The interest charged is set at 3% above prime and some plant equipment will need to be pledged as collateral. Repayment of principle and interest will be automatic and monthly with 10% on principle and the balance of the payment will comprise the interest. S/T Loan type #2: You can apply for an unlimited amount of money with #2 Loans. Whether you get what you apply for will depend upon your current credit rating. Interest will be set at 4% above prime and repayment of principle is the same as type #1 loans. Mortgage: You can mortgage the company's buildings and land. The bank will lend up to 75% of the appraised value. Interest will be set at 2% above prime and the monthly payment will be $3,446 with only $346 going towards principle each month. Misc. Credit: You can secure various forms of non-secured credit ie: company credit cards etc. The maximum amount that can be secured is $50,000 and this credit is easy to get. No collateral is required. The interest rate on this form of credit is 22% per annum with a 10% repayment of the outstanding balance plus interest required each month. INVESTMENT: Selecting this option will bring up a sub-menu that displays 6 options; S/T investments type A-C, Bonds, Corporate Stocks and exit. The investments available range from 6% below prime interest bearing 100% Government of Canada insured and guaranteed investments to a 2% below prime interest bearing 40% chance of loosing your investment type. All investments are not locked in and can be cashed-in at any time by using a negative number. Investment type A: This investment type pays interest at 6% below prime and is fully guaranteed by the Government. Investment type B: This investment type pays interest at 5% below prime and is guaranteed by the Government at a rate of 60% of your total investment. Investment type C: This investment type pays interest at 4% below prime and is not guaranteed by the Government. However, these investments are very safe and the likelihood of loss is very low. Bonds: This includes numerous types of bonds available on the market and are considered safe investments. No government insurance or guarantee is available on these bond investments. Bonds will pay interest at 3% below the prime rate. Corporate Stocks: This investment includes all types of preferred and common stocks available on the market. A stock broker will decide where your money is to be directed and what your portfolio will consist of. These investments are highly volatile and you have a 40% chance of losing all or part of your investment on any given month. The revenues received 4 from stock investments are compared to the prime rate and will pay on average the highest rate of interest which is just 2% below the prime rate or 8% per annum. INCOME STATEMENT: Selecting this option will display a year-to-date income and expense sheet. To see past period income statements you will need to print them out using the Print option. RATIOS: Selecting this option will display 4 columns of ratios. The first column is for the year 1990. The second column is for the year 1991. The third column is the current year-to-date ratios. The forth column is the Industry Standard ratios. The main category of ratios include those for; liquidity, leverage, activity and profitability. PRINT STMTS: This option is used to print out the Balance, Income, Statement of Changes in Financial position statements as well as the year-to-date ratios. You will be presented with a sub-menu for the Balance and Income statements and have the option of selecting the year-to-date statements or you can print a statement for any previous month. The Changes and Ratio statement is restricted to the year-to- date default. Also, if you want to print any of the other reports or listings contained within the other main menu options simply hold down the [SHIFT] key and press the [PRINT] key while the report is up on the video display monitor. You will receive a screen print of whatever is currently displayed on the screen. [MARKETING] DISTRIBUTION: Selecting this option will merely display a short text indicating Ferndale's distribution method. FRANCHISE: Selecting this option will bring up a sub-menu; view, price, graphic and exit options are available. View: Selecting this sub-menu option will display the franchises sold to date. The address, town and province as well as which salesman sold the outlet, including the franchise fee collected will be shown. Price: Selecting this sub-menu option will allow you to set the franchise fee the company wants for selling an outlet license to the franchisee. The franchise fee can be changed at any time and once set, will act as a default price until changed. It is important to note that when a franchise is sold approx. $35,000 (wholesale price value) of product inventory is also sold to the new franchisee. This volume is controlled by the program and you have no control over that. You do have control over the price each garment is sold for however. 5 Graphic: Selecting this sub-menu option will graphically display the locations of all franchises sold to date on a map of the western provinces. It's not high tech graphics, so don't get too excited. PRICE: Selecting this option allows you to set the prices for the eleven different product categories the company manufactures and sells to the franchisees. The price can be changed any time and once set, it will act as a default price until changed. The display will also show a complete break-down of the products costs to produce including material costs, labour to produce the item, your wholesale price and the franchises retail price, which is based on your wholesale prices. PROMO: Selecting this option will bring up a sub-menu that provides three main advertising mediums; television, radio and printed media. You can use one or a mix of all mediums and each medium will sell air time or ad space at different rates. This option will "book" your ad or air time but will not automatically charge your cash account for the ads. You will pay for the advertising when the month has been rolled over using the Advance Date option from the [OTHER] main menu option. The simulation program will provide instant feedback for the booked advertising however and if the projections option is viewed the booked advertising will be taken into consideration for these projections. The promo values are zeroed out after the Advance Date has been executed, so you must evaluate your advertising and book new air-time or ad space each month. The bookings of the previous month will not be used as a default for future periods. You must re-book each month. PROJECTIONS: Selecting this option will display the marketing departments projected sales of both potential franchise outlet sales as well as individual franchise product sales volume. Total demand for franchise outlet sales that could be sold is based on numerous factors including the level of advertising expense, economy, franchise fee, number of sales people, salespeople's skill level etc. While the actual projected franchise outlet sales (as shown on the righthand side of the screen) will be restricted by one additional element. This extra element is the time constraints required to actually complete an outlet sale and construct the leasehold improvements etc. The maximum number of franchises that can be sold in any month by a single salesperson is two. You may wish to play with the variables and elements that influence marketing and try to match the marketing mix to that of the companies capabilities. A balancing act of these elements will produce optimal performance. Spending too much on advertising for example can be a waste of money. Advertising creates interest in Ferndale's products and to a lessor degree for it's franchise outlets as a business opportunity. An over abundance of franchise outlet interest is wasted if you do not have the salespeople required to close the outlet sale or the capacity to produce the products that could be sold 6 due to the extra interest created through advertising. By evaluating your goals and insuring that you have the physical capacity to meet those goals together with a marketing mix that is sound, your goals will be realized. One item to note on the franchise outlet sales volume demand projections (as shown on the lefthand side of the screen) that may throw you off, is that projected demand for franchise outlet sales is influenced by the number of and skill level of salespeople you have on staff. The reason why demand does not remain the same no matter how many salespeople you have, is due to the fact that salespeople perform marketing/advertising activities that are in addition to your regular advertising campaigns. These franchise salespeople are by no means just order takers, they must work hard to help create demand for the franchise outlets. Advertising creates interest, but salespeople close sales and create real demand not just interest. That is why the "CURRENT STRATEGY COULD SELL" projections will decline or increase in relation to the number of salespeople on staff. The "CURRENT STRATEGY COULD SELL" projection will never be lower than the "FERNDALES'S ABILITY TO SELL" projection, but it can be higher. In other words, the only difference between the franchise outlet demand projection and the company's ability to sell that many outlets is due to the time constraint element. [PRODUCTION] CAPACITY: Selecting this option will display a line of text that will tell you what the current capacity to produce is based on the equipment held by the company. This is not to say that you will produce this amount as if you have fired your Production manager or some other event will cause your actual production capability to be reduced. Also, the capacity to produce for each piece of equipment will decline over time due to wear and usage. The value of this decline is based on the level of depreciation for each piece of equipment. EQUIPMENT: Selecting this option will bring up a sub-menu. The sub- menu will display 4 options; view equipment, buy equipment, sell equipment and exit. You have complete control over the assets of the company and can buy and sell equipment as desired. View equipment: This option will display a list of all the company's plant equipment, it's capacity, it's purchase cost and it's book value. Buy equipment: This option lets you buy equipment on the open market. Equipment for sale will show it's type, capacity and cost values are displayed. No credit is available through the equipment seller, so you must pay for the purchase immediately. That is not to say that you cannot get a loan from the bank first then go back and buy the piece of equipment. 7 Sell equipment: This option allows you to sell existing equipment. The amount that you can sell the equipment for will be for the purpose of this simulation, based on the current book value for a particular piece of equipment. So, no gain or loss will be realized on the sale of assets. Certain assets can not be sold and you will be informed of this if you try to sell them. Selling equipment may be advantageous if a replacement can be purchased that will provide a greater capacity for less money invested. Careful analysis of current equipment verses those available for sale will be required to make an informed decision. INVENTORY: Selecting this option will display the setting for minimum inventory levels for each product, raw materials inventory as well as the actual level of inventory you have on hand right now. This option also provides you with a means of setting a minimum inventory level to maintain at all times. Minimum inventory levels provide a buffer between production time requirements and delivery lag time of raw materials. For the purposes of this simulation, you will not want to keep too much money tied up in inventory as stock will be sold down only to the level of the "minimum stock on hand" that you select. Most Japanese manufacturers try to keep inventory levels down to the absolute minimum with unusually high inventory turnover ratios. OUTPUT: Selecting this option will enable you to provide instruction to the Production Department. You will, on a monthly basis fill out a "Products to Produce" order form. This will let the production department know how much raw material to buy and how many individual products to produce for the month. You will use the projections received from the marketing department in order to fill out this production order. You have complete control over how much to produce and a careful look at your cash, accounts payable, accounts receivable, sales projections, inventory levels and how many new franchises will be sold that month will help you make informed decisions. Once you have completed the order form, the program will tally up the costs for raw material purchases and provide you with an option to modify the order or proceed to file the order with the production department. The prices used to calculate the raw material costs will depend upon which supplier you have decided to use that month. The program will warn you that it will use the currently selected supplier to fill the order and provide you with an escape route to go back and change suppliers if you wish. If you, for some strange reason, forget to place a "Products to Produce" order with the Production Department in any given month, the program will provide you with a remingder to do so. The raw material and finished product inventory levels will change in accordance with your ability to do the job. The actual stock items that are sold with a new franchise are: Pants: Mens 150 Pants: Womans 250 Pants: Boys 140 Pants: Girls 160 Shirts:Unisex 400 8 Skirts 100 Jackets: Mens 80 Jackets: Womans 90 Jackets: Boys 50 Jackets: Girls 40 Handbags 30 ----------- 1,490 garments It is important to remember these quantities when placing your monthly "Products to produce order". You will need to not only calculate the monthly volumes required for existing franchises, but will have to add the extra garments listed here to your order. New franchises that will be sold in the current month will not be included when calculating the total sales volumes for the current month. Instead, you must multiply the projected sales volumes available by the number of current existing franchise outlets, then add the bulk inventory that is sold with each new franchise together with the regular volumes. As an example, suppose that the marketing department has indicated that 8 franchises will be sold this month (Use the [MARKETING] main menu then select the sub-menu [Projections] ) and you currently have 32 franchises outlets (not including the 8 that will be sold this month). You will calculate a "Products to produce order" as follows: Individual # of Total Bulk Products Product Franchise Existing For Sale To Volume Franchises Franchises Volumes Produce Pants: Mens 90 X 32 = 2880 + 1200 = 4080 Pants: Womans 151 X 32 = 4832 + 2000 = 6832 Pants: Boys 98 X 32 = 3136 + 1120 = 4256 Pants: Girls 112 X 32 = 3584 + 1280 = 4864 Shirts:Unisex 254 X 32 = 8128 + 3200 = 11328 Skirts 65 X 32 = 2080 + 800 = 2880 Jackets: Mens 43 X 32 = 1376 + 640 = 2016 Jackets: Womans 48 X 32 = 1536 + 720 = 2256 Jackets: Boys 29 X 32 = 928 + 400 = 1328 Jackets: Girls 23 X 32 = 736 + 320 = 1056 Handbags 17 X 32 = 544 + 240 = 784 ----- ----- -------- ------ --------- Total Units 930 32 29,760 11,920 41,680 So, from the summary above it has been established 41,680 units of clothing will have to be recorded on the Products to Produce Order form to meet the products needs for the current month. A "Products to Produce Order Form" can be found in the Appendix. Just photocopy as many copies as you need. You will also have to make sure that you can produce 41,680 units by checking your company's capacity (use the [PRODUCTION] main menu and select the [Capacity] sub-menu). If the Capacity is lower than the volume being ordered, you need to purchase some more equipment. If you cannot afford to buy more equipment, you will have lost sales. 9 SUPPLIERS: Selecting this option will provide you with an option to select raw material purchases from three separate sources. You can use one or all three at the same time for various raw materials. The only restriction is that you can only use one supplier for each type of raw material purchased. IE: use supplier #1 for material A, supplier #2 for material B, Supplier #2 for material C and supplier #3 for material D. Or use any supplier for all the material types that you require. The quality of each fabric that the supplier sells is also displayed and is an important component. Suppliers will know through credit checks how much you own other suppliers so don't be fooled into thinking that you can charge up purchases for three months with one supplier and then change suppliers to begin a new cycle of credit purchases. Generally, the suppliers will grant credit for purchases up to a maximum of $1,000,000. If you owe more than a million dollars to raw material suppliers in total and your accounts payable policy states that you will pay suppliers in say two months, forget it, you will be cut-off from any further purchases until the account is made current. Don't let your payables get out of hand or you will lose an entire months worth of sales due to poor accounts payable management. This will not make your creditors, franchisees or Sara Ferndale very happy. [PERSONNEL] BONUS/RAISES: Selecting this option will provide you with a means to give deserving managers a bonus or a raise in pay. Depending upon the value of the bonus or raise the manager will be made more happy with their job and the company. It is important to note that if a particular manager is unhappy due to an underlying cause, bonuses and pay raises will act as a temporary fix or a band-aid solution towards the employees declining unhappiness. If the true problem with the employee is not known, bonuses and raises will prevent the manager from quiting, but it will cost more to keep them happy using bonuses or raises over the long haul. Simply select the record number of the manager to be given a bonus or raise and enter the dollar value of the bonus or raise. It is difficult to simulate non numeric value rewards such as intrinsic rewards, so the program does not contain any. I am not suggesting that a monetary reward is the only or best method to motivate or reward an employee for a job well done or to increase an employees overall happiness with the company. If an employee is incompetent within their job, the stress from their inability to cope with their position will remain no matter how many raises or bonuses you give them. The program uses dollar values to deal with bonuses and raises to overcome an employees declining happiness values, but a promotion may also cure what's ailing an individual who has a high skill level and is in a lower level managerial position or is being paid a wage which is too low. Promoting an employee may be the wrong decision for someone who is incompetent in their current position. How can you determine what is wrong with an employee? The Feedback option will provide memos sent to you by the employees. By examining the memo which will be presented in short one line condensed versions, you can tell what the problem is. The value of bonuses are recorded to the ledger account Bonus and Benefits immediately. 10 Demote: Selecting this option will enable you to demote an employee. Demotions are not always a negative thing to do to someone. If an employee is incompetent within their position, a demotion will alleviate the long term stress that is causing their unhappiness and cause only a temporary increase in their present unhappiness until they readjust to the new position, which they are capable of handling. However, if in the example above, a demotion is deferred too long, the added stress of the demotion will push them over the edge and the employee might quit. knowing the signs of when an employee is in over their head will help you to realize when a demotion is preferred over added bonuses or pay raises to try to cheer up an incompetent over stressed employee. DISCIPLINE: Just as you can give bonuses and pay raises you can give discipline to an unruly employee. Select this option and identify the employee to receive the discipline. Enter the value of the discipline to be given and press enter. In the same way that rewards are given a monetary value even though the reward could be intrinsic, discipline is recorded in monetary values as well. The discipline could be intrinsic as well, without a true monetary value, but program restrictions require that a monetary value be used for all disciplinary action. The value of such discipline is credited against the Bonus and Benefits expense account. FEEDBACK: Selecting this option will provide you with current feedback from your managers. The feedback takes the form of condensed memo's that come straight to the point. It is important to monitor the memo's to get a feel for who is in the right position and what action needs to be taken to address each individual memo. It is important to read your managers memo's every month. FIRE: Select this option to fire a manager. It is unlikely that you would want to fire very many of the existing staff members, but if you view it as a logical decision that is required, the option to do so is available to you. HIRE: Select this option to hire new staff members. There is a cross section of salesman, production managers, garment designer, marketing experts, financial managers, personnel manager etc. You can select likely candidates from a list. This list shows their background, skill levels and the asking salary they would want to come on board and work for Ferndale. You are free to adjust their pay scale up or down once they are hired. Depending upon their qualifications, 11 practical experience and skill level, you could successfully re- negociate a new salary with them. But, if the new salary does not compensate fairly for those above mentioned attributes compared to the industry standard, they will become unhappy and you will have to deal with that. PROMOTE: Selecting this option will enable you to give an employee a promotion. When a manager is promoted, they will move up the ladder one step. The wage and remuneration package will automatically be given to the promoted individual based on the industry average for such positions. Ferndale has not promoted anyone since the inception of the company, so the wages paid to the current managers are considerably lower than the industry standard. If you promote anyone they will receive a considerable pay increase. Ferndale has identified the following levels of management and provides enough steps to keep highly skilled managers on the company's payroll for a long time: Vice-President General Manager Assistant Manager Supervisor Once someone has been promoted and have gone from $30,000 per year to say $50,000 per year, you can still adjust their salary downwards. Although to do so would cause unhappiness in the individual. A balanced "fit" between the employee and the job is required. The minimum skill level required to be a supervisor is 5 with one additional point required to be comfortable within the job. So, a Vice President would need a skill level of at least 8 and preferably 9 to be comfortable within the job. Anyone who has a skill level that is lower than the requirement for the job will become unhappy. Anyone who has a higher skill level than their current position demands will also be unhappy. If this decline in happiness is allowed to continue the happiness value shown in the employees record will continue to decline. Sure, bonuses and pay raises will temporarily increase well being and happiness levels, but if the value indicated for the employees happiness drops too low, they will give warning and quit their jobs. VIEW RECORDS: This selection will bring up a sub-menu; view records or view the organizational chart. View Records: The view records will display information on each manager individually. The record is basically a payroll record that shows their address, experience, skill level, and annual salary level etc. You can flip through them one at a time. Org. Chart: The organizational chart is just a graphical representation 12 of where the managers fit within the company. Only those with general manager statis will be shown along with specialty positions that are on par with GM's statis, ie: a clothes designer or personnel manager if hired would be depicted on the organizational chart. [OTHER] ADVANCE DATE: Use this option to advance the using date ahead to the beginning of a new month and to have the program assess and calculate the months transactions based on the decisions you have made for the month. When you first begin using the simulation, you are on January 1 1992. You can make all the decisions you want, which basically sets the defaults for the way you want the month to proceed. Once you are happy with the decisions you have made, you will advance the using date which will execute the operations for the entire month integrating the decisions you have made for that month. All revenue and expense accounts concerned with the accrual operations during the month will be calculated and posted when the "Advance Date" option is executed. You will given a WARNING screen when this option is chosen from the menu and you will have the opportunity to escape at that point. If you do not escape from the WARNING screen, the monthly roll over and calculations will be made. You cannot go back and rework a month once it has rolled over into a new month. There are a lot of calculations being performed during the Advance Date process and it might take a few minutes to complete the process. You will not be allowed to advance the using date until you have completed the required monthly mini-case. COMPETITORS: This is one of the environmental historical text profiles available on-line. These profiles are useful in preparing strategic plans and general information about the industry. These text files are in point form, making them brief and concise. CUSTOMERS: Another on-line text profile that you should read and can go back to for reference during the course of the simulations. ECONOMY: Yet another on-line text profile that you should read. HISTORY: This is an on-line text file, which outlines briefly the history of Sara Ferndale and the company's progress up to the time of your being hired on as the new Vice President. This is a must read file. 13 MINI-CASES: Once each month, you are required to make decisions involving a min-case. You must complete a decision on the monthly case in order to advance the using date forward into the next month. The mini-cases involve certain opportunities or possible threats as well as other items that managers could face. Each case has an exit to think about option that will afford you the time you need to evaluate the case and the consequences of the various options that are presented to chose from. Some cases will have more options available than others and you may not agree with any of the possible options that are available, so try to pick one that will produce the desired result even if you don't agree with the reason presented with the option. Your selection of an option to handle the mini-case will be graded. You will receive bonus points for good decisions or penalty points for not so good decisions. Bad decisions that are solely bottom line or profit orientated that have the possibility to hurt the environment or others will be penalized. At the end of each min-case a Bonus/Penalty summary screen will be shown. The general approach is to make all the decisions you want to make for the month then proceed to do the mini-case and finally advance the using date to finish the month off. SUPPLIERS: This is another on-line text file which profiles the raw material suppliers available. CHAPTER 4 GETTING STARTED The first step of course is to install the program files onto your hard drive and make a master data disk as outlined in the Appendix. Then read the history/profile text files within the program. Read the on-line History files: You will need to read the history and profiles for; competitors, customers, economy, suppliers and the company's history in order to get a feel for the industry and the company that operates within this industry. The information contained within the profiles and history are used to prepare a SAP and ETOP, which is discussed in detail below. Determine the company goals: Without goals the company will be like a ship floating aimlessly towards no particular destination. Failure to identify company goals is a plan for disaster. As without goals you have no base to build from. How do you know what implementation process to use if you don't even know what you want? How can you determine if anyone is doing a good job if there are no quotas to be filled? What business are you really in? You will need to write a short paragraph that describes concisely what business this company is in. You will need to write 14 down the corporate goals you wish to achieve with this company. Be specific with the goals ie: to increase sales by 50% during this year. To ensure that 30 more franchises are sold this year. To increase net after tax profits by 10% this year. You may need to downsize or upgrade these initial goals once you have completed the strategic management planning process and when the feedback is received through the implementation process. These first round goals are at least a starting point. Prepare a SAP (Strategic Advantage Profile): The company you will be managing has within it's structure certain advantages or strengths. You must be able to identify and evaluate a company's strengths and weaknesses in order to take advantage of environmental opportunities or to avoid certain threats that will influence your company's destiny. If you do not know the strengths and weaknesses, you will not be in a position to recognize how your company will be affected by the environment. This will cause you to make bad decisions and will eventually lead to bankruptcy. Other problems with committing the company to a contract that the company simply cannot meet can be avoided if you know it's strengths and weaknesses. A SAP would examine such internal factors as; corporate resources, personnel, finance and accounting, production, operations management, R & D, marketing and distribution. Prepare a ETOP (Environmental Threat/Opportunity Profile) : The ETOP examines such external factors such as; Socioeconomic, Technological, Competitors, Suppliers and any Governmental implications that may affect the company. Identify and lay out your Strategy: Once you have identified your company's mission or objectives, examined it's internal strengths and weaknesses and compare that to the environmental threats and opportunities, you are now ready to identify HOW you are going to accomplish the company goals. How are you going to achieve these goals? The implementation part of strategic planning is the usual planning, organizing, staffing, control directing, schedualing, budgeting, reporting etc that is normally associated with management. Use the strategy worksheets found in the appendix to identify your strategies. Begin the implementation process: This company already has an implementation process in place, but is it a correct process? After you have evaluated the SAP and ETOP together with the CEO's objectives for the company, you may want to adjust certain aspects of the current implementation process to better meet the objectives of the company. Prepare projections for the entire year and break this annual projection down into monthly projections. Know in advance how much equipment you will need to buy along the way, know how many franchises can be sold and plan for it. Know ahead of time how your going to deal with a cash crunch etc. 15 Examine actual performance and modify implementation or strategy: To remain efficient and on track, the individuals in charge of strategic planning will periodically evaluate operations feedback against corporate goals to see if the implementation process or the goals themselves need to be adjusted. Unrealistic goals that have been made with little thought towards the company's strengths/weaknesses or real ability will cause wide gaps between the goal and the actual performance. Modify your implementation process or strategy: Upon evaluating the current implementation process over a period of time, you will know if the current strategy is working or not. Gaps within certain aspects of the company will be noticed. These gaps if negative will need to be addressed. The hard part is knowing which variable within the company is the weak link. Not giving enough time for an implementation change to bring about the desired results is also a danger. Positive gaps can also be a problem if the other implementation factors are not adjusted upwards to handle the situation. Ie: if sales potential is greater than your ability to produce product, you will lose profits and have an unhappy sales force. Some links of the company chain may be very strong while others that are weak will hold the company back. Learning to identify gaps and the reasons for them together with a balancing of implementation chains or departments to work together harmoniously and to the maximum of their ability is the key to successful management. Completion of the Simulation: Once you have completed the mini-case for the last month of operations (December) and have used the Advance Date function, you have completed the simulation. The only remaining task to perform, is to print-out the final financial statements for the month of December. After the program has completed calculations using the Advance Date option, the program will show a screen that will indicate that you are finished and will provide you with a reminder that you still need to print off the financial statements. The program will then bring you back to the main-menu, where you can print the statements immediately or you can defer this task until another day. The program has a built in termination procedure that will prevent you from entering any further data or using any of the program modules except for the view or print statements options contained within the Finance module. When the simulation is over it's really over. You can begin a new simulation starting from scratch by using one of the backup copies of the original Student Master Data Disk. 16 APPENDIX Installing the Program on a Hard Drive: The program comes in an archived self-extracting file, which can be copied into any hard-drive directory or subdirectory. If you are viewing this using an Ansi text reader or reading it hardcopy, you obviously have self-extracted the files. There is another self-extracting archive file called PROGRAMS.EXE, which contains all the program files and data files. This file will be de-compressed when you use the INSTALL.BAT file. Make sure to read the file 1STREAD.DOC which explains the install further. Create back-up copies of the original data disk: Use the Master Student Data Disk to make several copies of the data disk. The purchaser of the program is allowed to make as many copies of the data disk as desired, however only one copy of the program can be used per machine. The main purpose of having numerous copies of the data disk is for back-up and to provide the student with the opportunity to restart the simulation from scratch should they want to try the simulation more than one time. This would be desirable should the unfortunate student go bankrupt after only three months into the simulation. To make back-up copies of the Master Data Disk, place the original in drive A: and a blank formatted disk in drive B: then type in the DOS command DISKCOPY A: B: or you can use COPY *.* A: B: (consult your DOS book for further instructions) Products To Produce Worksheet (Form #1): Use this worksheet to determine the total volume of units to produce for each individual product. From the marketing main-menu, select the sub-menu called [Projections]. Make a hard copy of the figures shown on the screen by pressing down and holding the [SHIFT] key while tapping the [PRINT] key. This will print a hard copy of what is currently shown on the screen. Remember that the volumes shown from this projection are range sales volumes for a single franchise and must be multiplied by the total number of currently existing franchises. You must determine the exact volume to use from the range. Transfer the volumes received from the screen-print over to column #1 'Individual Franchise Volume' onto Form #1. Next, write down the number of currently existing franchise outlets into column #2. Now complete column #3 by, multiplying the volume shown in column #1 by the number of existing franchises as shown in column #2. To complete column #4 'Bulk Sales', you will need to complete the lower section of Form #1 called 'New Franchise Bulk Sales Volume'. From the upper righthand portion of the on-screen print-out, enter the number of projected franchise outlets that will be sold this month into column #2 of this lower section. Complete column #3 'Total Bulk Sales Volumes' by multiplying column #1 by column #2 (Volumes sold with each new franchise X # of franchises that will be sold this month). You are now ready to transfer these bulk sales volume figures up to column #4 on Page A1 the upper portion of Form #1. To calculate the values for column #5 'Volume To Produce', simply add column #3 with column #4 (Total Volume For Franchises + Bulk Sales Volume). You have now projected the total product volumes that need to be produced for this month. The actual volumes that can be produced will of course be limited to the company's actual capacity to produce. Sales Revenue and Production Costs Worksheet (Form #2): Use this worksheet to project your revenue and production expenses for the month. From the 'Products To Produce' worksheet (Form #1), copy the total product volumes that you have decided to produce for the month into column #1 of the Revenue and Expense worksheet (Form #2). Next, go to the bottom of Form #2 and complete the three columns, which are the material cost per unit, labour cost per unit and the selling price per unit. This information can be found by selecting [MARKETING] from the main-menu and selecting [Product] from the sub-menu. Complete column #2 of Form #2 by multiplying the volume to produce figure for each product by the corresponding material cost per unit shown in column #1 of the lower portion of the form. Proceed to complete column #3 of Form #2 by multiplying the volume to produce figure for each product by the corresponding labour cost per unit shown in column #2 of the lower portion of the form. Column #4 total production costs is calculated, simply by adding the monetary values of column #2 and column #3 together (Total Material Costs + Total Labour Costs). The final column #5 total sales revenue is calculated by multiplying the volume to produce figure for each product by the corresponding selling price per unit shown in column #3 of the lower portion of the form. You now have completed Form #2 and have projected the monthly revenue and production expenses. Whether these projected figures will be correct will depend upon the actual demand and the company's capacity to produce. The actual costs of materials posted to expense will be in relation to the actual sales made, as the material costs are capitalized and held in the inventory account until sold. However, the labour costs associated with making the products will be expensed out whether the product is sold or not. So, labour costs will not be capitalized and included in the inventory account values. Labour costs will vary in relationship to the capacity of the company. If the company has the capacity to create the volume of products ordered, the labour costs for all products produced will be expensed immediately and the cost of raw materials used will be transferred from the Raw materials inventory into the Finished product inventory. If the company does not have the capacity to produce the volume of products ordered, the raw materials will be purchased and kept in raw materials inventory, thus no corresponding labour is expensed nor are there any expenses recognized for the excess products that were ordered but could not be produced. The material costs for the excess is held in the raw materials inventory. Page A2 Proforma Income Statement Worksheet (Form #3): Use this worksheet to project the revenue and expenses for the company each month. The information required to complete the income and expense projection can be found in numerous areas including other worksheets you have prepared and data available from the various departments. The impact of revenue and expenses generated from mini- cases will need to be recorded on the back of your decision journal Form #6 in order to incorporate the impact onto your projections. A guide to help you find the required information is shown below: ACCOUNT WHERE INFORMATION CAN BE FOUND Sales Form #2 Franchise Fees [MARKETING] > [Projections] Interest Income Form #6 and [FINANCE] > [Investment] Raw Materials Used Form #2 Direct Labour Form #2 Fashion Design Wages If you hired a fashion designer [PERSONNEL] Franchise Sales Wages [PERSONNEL] > [View Records] Franchise Services $8,000 for each new outlet sold + 2% of sales. or $10,000 min if no product and outlet sales. Administrative Wages [PERSONNEL] > [View Records] Bonus & Benefits Form #6 Marketing Form #6 and [MARKETING] > sub-options Interest Form #6 and [FINANCE] > [Debt] > sub-options Depreciation Previous Balance Sht or [PRODUCTION] > [Equipment] > [View] for current book value. Buildings = 5% per year, Equip = 20% per year. 1/2 year rule does not apply in the simulation Overhead & Other 15% of sales or $10,000 min if no product sale Income Tax Paid Out 40% of Profit. Losses will receive a refund. Proforma Balance Sheet Worksheet (Form #4): Use this worksheet to project what the year-to-date balance sheet will be for the month-end. Use the previous month's balance sheet together with completed Form #6 and Form #3 to provide information necessary to complete Form #4. Proforma Statement of Changes Worksheet (Form #5): Use this worksheet to project your year-to-date cash flow. Use completed Form #4 to complete this form. A good understanding of the impact a decrease or an increase in a particular balance sheet account will have, is needed in order to know whether the change has a source or a use effect upon the cash account. Given the presentation limitations of the Changes Statement, when an increase is projected for an account that is presented as "Decrease in account name", simply write this number as a negative number. The same is true for the reverse, where a projected change is a decrease and the Changes Statement has presented the account as "Increase in account name", simply write this number as a negative number as well. Page A3 Once the form has been completed, simply add up all the positive numbers and subtract all the negative numbers. The ending number you are left with added to the beginning cash on 91/12/31 should be your ending cash balance for the month. Remember not to let your cash balance exceed -500,000 or you will go bankrupt! Management Decision Journal (Form #6): Use this form to document all of your decisions each month as you progress through the simulation. You will need 12 copies of this and the other forms, so please photocopy as many as you need. It is important to document your decisions in order to know what impact your decisions are having and what decisions you made when. There is a lot of detail in this simulation and you will not remember everything, like how much did you spend on Television ads 4 months ago or who received a raise and for how much, or when product Y was priced at X was there a 5% or 10% drop in demand? It will also help to explain unexpected or forgotten revenue and/or expenses that arise from the decisions you made with previous mini-cases. Environmental Threat Opportunity Profile (ETOP) Worksheet (Form #7): Use this form to prepare your analysis of the external environment. The principles involved with preparing an ETOP are beyond the scope of the objectives for this simulation. Consult a Strategic Management text to learn about this step in the art of SM. Strategic Advantage Profile (SAP) worksheet (Form #8): Use this form to prepare your analysis of the internal environment. What strengths or weaknesses does the company have and how can you use the strengths and correct or avoid activities that are dependant upon those weaknesses. The principles involved with preparing a SAP are beyond the scope of the objectives for this simulation. Consult a Strategic Management text to learn about this step in the art of SM. Strategic Planning Worksheets (Forms #9 - #12): There are 4 separate worksheets included for you to prepare your strategies, policy, implementation and feedback procedures within this simulation. Each page will cover one of the company's departments and should be completed before continuing on with the actual simulation software program. An example of completed form follows: 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � Student Name: STRATEGY WORKSHEET PAGE 2 � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � STRATEGY FOR THE COMPANY MARKETING Form #10 � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� FRANCHISE UNITS SOLD OBJECTIVE: To sell 50 more outlets this year. What is the plan to implement this objective: Hire two more sales- people, increase ad cost by 40% and equipment expenditures by 95%. What procedures will you use to implement the plan: Secure and allocate the required funds for; staff, capital equipment and Page A4 advertising space while remaining solvent at all times. What methods of control and feedback will you use: Have the Marketing Dept. prepare multiple projections each month and evaluate progress. Insure the Production Dept. has the capacity to produce the bulk and ongoing sales necessary for each new outlet sold. Annual Report To The CEO (Form #13): This is a three page questionnaire containing 42 questions. You are required to complete this report on separate paper and submit it to your instructor along with a balance sheet, income statement, statement of changes and ratio print-outs. You may also be required to hand in your completed worksheets if requested by your instructor as back-up. Financial Ratios: As most of these ratios will be found in several of your college texts, no re-iteration will be made within this student manual. One of the goals of your financial plan should be to strive for ratios that are in line with that of the Industry Standard. However, given that most business entities are unique in some way, Industry Standards are not always applicable to your company. For example if you owned a flower shop that also sold glassware or numerous other products besides flowers, you would not be able to compare yourself to the industry standard digit for digit. Also, if your company ventures into vertical /horizontal or backward/forward integration activities, your performance will also be different than that of the industry. So, don't rely solely on ratios to provide performance evaluation, rather use multiply analysis tools to evaluate your company's performance over time. Page A5 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 쿞tudent Name: For the month of: � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � PRODUCTS TO PRODUCE ORDER FORM Form #1 � 쳐컴컴컴컴컴컴컴컴쩡컴컴컴컴컴컫컴컴컴컴컴컴쩡컴컴컴컴컴컫컴컴컴컫컴컴컴컴캑 � � � � � � � � PRODUCT � INDIVIDUAL � # OF � TOTAL � BULK � VOLUME � � � FRANCHISE � EXISTING � FOR � SALES � TO � � � VOLUME � FRANCHISES � FRANCHISES � � PRODUCE � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컵컴컴컴컴캑 � Pants: Mens � � � � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컵컴컴컴컴캑 � Pants: Womans � � � � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컵컴컴컴컴캑 � Pants: Boys � � � � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컵컴컴컴컴캑 � Pants: Girls � � � � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컵컴컴컴컴캑 � Shirts: Unisex � � � � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컵컴컴컴컴캑 � Jackets: Mens � � � � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컵컴컴컴컴캑 � Jackets: Womans � � � � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컵컴컴컴컴캑 � Jackets: Boys � � � � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컵컴컴컴컴캑 � Jackets: Girls � � � � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컵컴컴컴컴캑 � Handbags � � � � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컵컴컴컴컴캑 � TOTALS � � � � � � 읕컴컴컴컴컴컴컴컴좔컴컴컴컴컴컨컴컴컴컴컴컴좔컴컴컴컴컴컨컴컴컴컨컴컴컴컴켸 NEW FRANCHISE BULK SALES VOLUME WORKSHEET 旼컴컴컴컴컴컴컴컴쩡컴컴컴컴컴컫컴컴컴컴컴컴쩡컴컴컴컴컴커 � Products � Volume � # Of New � TOTAL � � That Are � Sold With � Franchises � BULK � � Sold With � Each New � That Will � SALES � � Each New � Franchise � Be Sold � VOLUMES � � Franchise � � This Month � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴캑 � Pants: Mens � 150 � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴캑 � Pants: Womans � 250 � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴캑 � Pants: Boys � 140 � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴캑 � Pants: Girls � 160 � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴캑 � Shirts: Unisex � 400 � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴캑 � Skirts � 100 � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴캑 � Jackets: Mens � 80 � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴캑 � Jackets: Womans � 90 � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴캑 � Jackets: Boys � 50 � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴캑 � Jackets: Girls � 40 � � � 쳐컴컴컴컴컴컴컴컴탠컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴캑 � Handbags � 30 � � � 읕컴컴컴컴컴컴컴컴좔컴컴컴컴컴컨컴컴컴컴컴컴좔컴컴컴컴컴켸 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � Student Name: For the Month of: � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � � � SALES REVENUE AND PRODUCTION COSTS WORKSHEET Form #2 � � � 쳐컴컴컴컴컴컴컴컫컴컴컴컴쩡컴컴컴컴쩡컴컴컴컴쩡컴컴컴컴컴컴컫컴컴컴컴컴컴캑 � � VOLUME � TOTAL � TOTAL � TOTAL � TOTAL � � PRODUCT � TO 쿘ATERIAL � LABOUR � PRODUCTION � SALES � � � PRODUCE� COSTS � COSTS � COSTS � REVENUE � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿛ants: Mens � � � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿛ants: Womans � � � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿛ants: Boys � � � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿛ants: Girls � � � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿞hirts: Unisex � � � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿞kirts � � � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿕ackets: Mens � � � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿕ackets: Womans � � � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿕ackets: Boys � � � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿕ackets: Girls � � � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿓andbags � � � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴탠컴컴컴컴탠컴컴컴컴탠컴컴컴컴컴컴컵컴컴컴컴컴컴캑 쿟OTALS � � � � � � 쳐컴컴컴컴컴컴컴컨컴컴컴컴좔컴컴컴컴좔컴컴컴컴좔컴컴컴컴컴컴컨컴컴컴컴컴컴켸 쳐컴컴컴컴컴컴컴컫컴컴컴컴컫컴컴컴컴컫컴컴컴컴컴컴커 � � MATERIAL� LABOUR � SELLING � � � COST PER� COST PER� PRICE PER � 쿛RODUCT � UNIT � UNIT � UNIT � 쳐컴컴컴컴컴컴컴컵컴컴컴컴컵컴컴컴컴컵컴컴컴컴컴컴캑 쿛ants: Mens � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴컵컴컴컴컴컵컴컴컴컴컴컴캑 쿛ants: Womans � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴컵컴컴컴컴컵컴컴컴컴컴컴캑 쿛ants: Boys � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴컵컴컴컴컴컵컴컴컴컴컴컴캑 쿛ants: Girls � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴컵컴컴컴컴컵컴컴컴컴컴컴캑 쿞hirts: Unisex � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴컵컴컴컴컴컵컴컴컴컴컴컴캑 쿞kirts � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴컵컴컴컴컴컵컴컴컴컴컴컴캑 쿕ackets: Mens � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴컵컴컴컴컴컵컴컴컴컴컴컴캑 쿕ackets: Womans � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴컵컴컴컴컴컵컴컴컴컴컴컴캑 쿕ackets: Boys � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴컵컴컴컴컴컵컴컴컴컴컴컴캑 쿕ackets: Girls � � � � 쳐컴컴컴컴컴컴컴컵컴컴컴컴컵컴컴컴컴컵컴컴컴컴컴컴캑 쿓andbags � � � � 읕컴컴컴컴컴컴컴컨컴컴컴컴컨컴컴컴컴컨컴컴컴컴컴컴켸 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � Student Name: For the Month of: � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � PRO-FORMA INCOME STATEMENT Form #3 � � � � � � REVENUE: � � � � Sales _____________________ � � � � Franchise Fees _____________________ � � � � Interest Income _____________________ � � � � TOTAL REVENUE ===================== � � � � EXPENSES: � � � � Raw Material Used _____________________ � � � � Direct Labour _____________________ � � � � Fashion Design Wages _____________________ � � � � Franchise Salesman Wages _____________________ � � � � Franchise Services _____________________ � � � � Administrative Wages _____________________ � � � � Bonus and Benefits _____________________ � � � � Marketing Expenses _____________________ � � � � Interest Expenses _____________________ � � � � Depreciation Expenses _____________________ � � � � Overhead & Other Expenses _____________________ � � � � TOTAL EXPENSES ===================== � � � � NET PROFIT _____________________ � � � � Income Tax Paid Out _____________________ � � � � INCOME (LOSS) AFTER TAX ===================== � � � � � � � � � � � � � � � � � � � � � � � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � Student Name: For the Month of: � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � PRO-FORMA BALANCE SHEET Form #4 � � � � ASSETS: � � � � Cash __________________ � � � � Accounts Receivable __________________ � � � � Short term Investments __________________ � � � � Raw Material Inventory __________________ � � � � Finished Product Inventory __________________ � � � � Land __________________ � � � � Building __________________ � � � � Accum. Deprec. Building __________________ � � � � Equipment __________________ � � � � Accum. Deprec. Equipment __________________ � � � � TOTAL ASSETS ================== � � � � LIABILITIES: � � � � Bank Overdraft __________________ � � � � Accounts Payable __________________ � � � � Bank Loans __________________ � � � � Revolving Credit __________________ � � � � Current Portion L/T Debt __________________ � � � � Mortgage __________________ � � � � L/T Shareholders Loan __________________ � � � � TOTAL LIABILITIES __________________ � � � � � � EQUITY: � � � � Common Shares __________________ � � � � Retained Earnings __________________ � � � � Revenue after Tax __________________ � � � � TOTAL EQUITY __________________ � � � � TOTAL LIABILITIES AND EQUITY ================== � � � � � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � Student Name: For the Month of: � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � PRO-FORMA STATEMENT OF CHANGES IN FINANCIAL POSTION WORKSHEET � � For The Period January 1, 1992 to________________ (YTD) � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � OPERATING ACTIVITIES: � � � � Cash provided by operations: � � Net Income after tax _____________________ � � Add: Items not requiring cash outflow: � � Depreciation expenses _____________________ � � Decrease in accounts receivable _____________________ � � Decrease in Inventory _____________________ � � Less: Items not providing cash inflow: � � Decrease in accounts payable _____________________ � � � � Total Cash Provided by operations _____________________ � � � � � � INVESTING ACTIVITIES: � � � � Increase in assets _____________________ � � Increase in investments _____________________ � � � � Total cash used in investing activities _____________________ � � � � FINANCING ACTIVITIES: � � � � Increase in Debts _____________________ � � � � � � INCREASE (DECREASE) IN CASH � � ===================== � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � WORKSHEET � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컫컴컴컴컴컴컴쩡컴컴컴컴컴컴컴쩡컴컴컴컴컴컴컴컴캑 � ACCOUNT � BALANCE AT � PROJECTED YTD � DIFFERENCES � � � 91/12/31 � BALANCES 쿔NCREASE DECREASE� 쳐컴컴컴컴컴컴컴컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컴컴탠컴컴컴컫컴컴컴컴캑 � Cash � 251,000 �_______________�________�_________� � Accounts Receivable � 814,000 �_______________�________�_________� � Short Term Investments � 0 �_______________�________�_________� � Raw Material Inventory � 184,000 �_______________�________�_________� � Finished Goods Inventory � 184,000 �_______________�________�_________� � Land � 234,070 �_______________�________�_________� � Buildings � 200,000 �_______________�________�_________� � Accum. Deprec: Buildings � 14,750 �_______________�________�_________� � Equipment � 144,000 �_______________�________�_________� � Accum. Deprec: Equipment � 40,320 �_______________�________�_________� � Bank Overdraft � 0 �_______________�________�_________� � Accounts Payable � 1,333,000 �_______________�________�_________� � Bank Loans � 0 �_______________�________�_________� � Revolving Credit � 0 �_______________�________�_________� � Current Portion Debt � 0 �_______________�________�_________� � Mortgage � 0 �_______________�________�_________� � L/T Shareholder Loan � 252,000 �_______________�________�_________� � Common Shares � 100 �_______________�________�_________� � Retained Earnings � 370,900 �_______________�________�_________� 쳐컴컴컴컴컴컴컴컴컴컴컴컴컵컴컴컴컴컴컴탠컴컴컴컴컴컴컴탠컴컴컴컵컴컴컴컴캑 � TOTALS � 0 � � � � 읕컴컴컴컴컴컴컴컴컴컴컴컴컨컴컴컴컴컴컴좔컴컴컴컴컴컴컴좔컴컴컴컨컴컴컴컴캑 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � � � MANAGEMENT DECISION FORM Form #6 � � � � For the Month of _______________________ Student's Name:________________� 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � FINANCE: � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � A/R Policy Percent down with order _____ Balance due in ______ Mths� � A/P Policy Percent down with order _____ Balance due in ______ Mths� � Line of Credit Amount used this month ________________________________� � Debt type #1 Amt borrowed this month _________ Total owing __________� � Debt type #2 Amt borrowed this month _________ Total owing __________� � Mortgage Did you mortgage the property this month? ______________� � Misc Credit Did you secure Misc. credit this month? ______________� � Investment A Amt invest. this month _________ Total invest.__________� � Amt of investment cashed-in this month _________________� � Investment B Amt invest. this month _________ Total invest.__________� � Amt of investment cashed-in this month _________________� � Investment C Amt invest. this month _________ Total invest.__________� � Amt of investment cashed-in this month _________________� � Bonds Amt of Bond this month _________ Total Bonds ___________� � Amt of Bonds cashed-in this month _________________� � Stocks Amt of Stock this month_________ Total Stock ___________� 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � MARKETING: � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � Franchise Fee Fee is set at __________________ per unit this month. � � Product Prices Prices are [] Up _______% [] Dwn ________% this month. � � TV Promo Spent _______________ for ads this month. � � Radio Promo Spent _______________ for ads this month. � � Print Promo Spent _______________ for ads this month. � � Total Promo costs this month were:______________________� � Projections Franchise units sold this month will be ________________� � Total product sales for existing outlets _______________� � Total products sold with new outlets _______________� 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � PRODUCTION: � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � Capacity Capacity to produce garments this month was ____________� � Buy Equipment Amt of new equipment purchased this month ______________� � Sell Equipment Book value of equipment sold this month ______________� � Inventory [] Decreased [] Increased Raw stock levels by ______%� � [] Decreased [] Increased Finish stock level by ______%� � Output Total garments ordered this month were __________items� � Actual garments produced this month were __________items� � Suppliers Supplier used for Material A was _______________________� � Supplier used for Material B was _______________________� � Supplier used for Material C was _______________________� � Supplier used for Material D was _______________________� 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � PERSONNEL: � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � Bonus/Raise [] Bonus [] Raise valued @ _______ to _________________� � [] Bonus [] Raise valued @ _______ to _________________� � Demotion ___________________________ New Position _______________� � Disapline ___________________________ valued @ ___________________� � Fire ___________________ Dept ____________Position __________� � Hire ___________________ Dept ____________Position __________� � Promote ___________________ Dept ____________Position __________� � Mini-Case Option selected #_________ Projected impact (use back) � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � Student Name: � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � ENVIRONMENTAL THREAT OR OPPORTUNITY PROFILES (ETOP) Form #7 � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컫컴컫컴컫컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � ENVIRONMENTAL AREAS � + � - � IMPACT OF ENVIRONMENTAL AREAS � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컵컴컵컴컵컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � Social or Economic � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � Technological � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � Government � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � Customers � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � Suppliers � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컨컴컨컴컨컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � NOTES: � � � � � � (+ Indicates Opportunity and - Indicates Threat) � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � Student Name: � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � STRATEGIC ADVANTAGE PROFILE (SAP) Form #8 � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컫컴컫컴컫컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � COMPANY INTERNAL AREAS � + � - � COMPANY STRENGTH OR WEAKNESS � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컵컴컵컴컵컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � Finance � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � Marketing � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � Production � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � Company Resources � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � R & D or Product Design � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � � 쳐컴탠컴탠컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � � � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컨컴컨컴컨컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � NOTES: � � � � � � (+ Indicates Strength and - Indicates Weakness) � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � Student Name: STRATEGY WORKSHEET PAGE 1 � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � STRATEGY FOR THE COMPANY FINANCES Form #9 � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � CASH BALANCE OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � ACCOUNTS RECEIVABLE OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � ACCOUNTS PAYABLE OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � DEBT OBJECTIVES: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � INVESTMENT OBJECTIVES: � � � � What is the plan to implement this objective: � � � � What procedures will you use to implement the plan: � � � � What methods of control and feedback will you use: � � � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � Student Name: STRATEGY WORKSHEET PAGE 2 � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � STRATEGY FOR THE COMPANY MARKETING Form #10 � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � FRANCHISE FEE OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � NUMBER OF FRANCHISE UNITS SOLD OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � PRODUCT PRICE OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What method of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � PRODUCT QUALITY AND FABRIC COSTS OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � ADVERTISING OBJECTIVES: � � � � What is the plan to implement this objective: � � � � What procedures will you use to implement the plan: � � � � What methods of control and feedback will you use: � � � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � Student Name: STRATEGY WORKSHEET PAGE 3 � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � STRATEGY FOR THE COMPANY PRODUCTION Form #11 � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � EQUIPMENT AND CAPACITY OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � INVENTORY LEVELS OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � FINISHED PRODUCT OUTPUT OBJECTIVES: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � OVERALL PRODUCTION COSTS OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control and feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � CHOICE OF SUPPLIER/S OBJECTIVE: � � � � What is the plan to implement this objective: � � � � What procedures will you use to implement the plan: � � � � What methods of control and feedback will you use: � � � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � Student Name: STRATEGY WORKSHEET PAGE 4 � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � STRATEGY FOR THE COMPANY PERSONNEL Form #12� 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � BONUS OR RAISE OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control or feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � PROMOTION OR DEMOTION OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control or feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � DISAPLINE OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control or feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � FIRE EMPLOYEE OBJECTIVE: � � � � � � What is the plan to implement this objective: � � � � � � What procedures will you use to implement the plan: � � � � � � What methods of control or feedback will you use: � � � 쳐컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴캑 � HIRE EMPLOYEE OBJECTIVE: � � � � What is the plan to implement this objective: � � � � What procedures will you use to implement the plan: � � � � What methods of control or feedback will you use: � � � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 PRESIDENT'S ANNUAL REPORT TO CEO Form #13 FINANCE: 1) Did you modify the Accounts Receivable policy? (If so, explain why.) 2) Did you modify the Accounts Payable policy? (If so, explain why.) 3) Did you secure a Line of Credit with the bank? (If so, for how many months was it used?) 4) Did you utilize any of the Short Term Loans? (If so, how many times did you borrow money?) 5) For what purposes were the loans acquired? 6) Did you mortgage the company's land and Buildings? (If so, why did you do this?) 7) Where you ever turned down for a loan? (If so, how many times?) 8) How many times did you end up with a cash surplus greater than $300k (If so, in what month did you begin making investments and why?) 9) Where you forced into liquidating any of your investments? (If so, why were you forced to liquidate?) 10) Did you invest in the stock market? (If so, how much money did you make and how much did you lose?) 11) What is your return on investments ratio? (Is it better or worse than the Industry Average?) 12) What is your return on equity ratio? (Is it better or worse than the Industry Average?) 13) Has your profit margin increased since you became President? (Also, is it better than the Industry Average?) 14) Has your Gross margin increased since you became President? (Also, is it better than the Industry Average?) 15) Is the company more financially secure after a year with you as the President? Form #13 Page 1 MARKETING: 1) How much in total did you spend on advertising? 2) How many franchises did you sell? (current # - 32): 3) What is the % for advertising expense vs franchise fees revenue? 4) In general, did your product prices go up or down? If so, Why? 5) Did you reach your sales volume targets? 6) Did you sell more franchises than you could service with product? PRODUCTION: 1) What was your ending capacity to produce garments? 2) How many times was your capacity to produce greater than 10% over that of your monthly output volumes? 3) Did you sell off any equipment? If so, why? 4) Did you reduce inventory levels or increase them? 5) Where you capable of meeting 100% of product demands? 6) Did you ever sell more franchises than you were capable of servicing with ongoing product demands or the bulk volumes for new outlets? 7) Did you stick with one supplier or use several suppliers at the same time? What was your reason for this strategy? PERSONNEL: 1) Did you give any bonuses or raises during the simulation? To who and why were they given? 2) Did you demote any managers? Who and why? 3) Did you provide discipline to any managers? Who and why? 4) Did you fire any managers? Who and why? 5) Did you hire any new staff members? Who and why? 6) Did you promote any managers? Who and why? Form #13 Page 2 MINI-CASES: 1) What was your final bonus/penalty score for the mini-cases? 2) For those that you received a negative score on, why do you think you received this score? Is there a better choice? 3) Did you take advantage of opportunities presented within a case even though it may not have been in line with the company's original goals? Explain why you did this in each instance. 4) What would you do if you were Ms. Ferndale concerning the offer presented in case #12? Why? GENERAL: 1) If you were to do this simulation again, what changes would you make to your strategy? 2) When looking back on your original strategies, goals and objectives, how close is the actual outcome or performance to those of the original plan? What strategies, goals or objectives did you modify from the original plan and why? 3) Did you consistently ask yourself "Is this decision in line with our company goals?" and document the reasons for making each decision or did you take the 'shoot-from-the-hip' approach more often than not? 4) What did you learn from this simulation experience? Explain. Form #13 Page 3