HOW WAS IT GUYS...???
VARIANT 22 SOLUTION
1(A) ECONOMIES OF SCALE: FACTORS WHICH LEAD TO LOW AVERAGE COST WHEN BUSINESS GROWS IN SIZE.EG PURCHASE ECONOMIES,RISK BEARING,MANAGERIAL AND FINANCIAL.
B)REVENUE(SALES): SELLING PRICE * NUMBER OF UNITS SOLD
IT IS BUSINESS REVENUE EARN FROM SALES..TO COMPUTE PROFIT SALES REVENUE IS REDUCE FROM COST OF SALES.
EG. N.LEE SOLD 2000 UNITS, EACH UNIT SELLING PRICE IS $3..SO HIS SALES REVENUE WILL BE 2000 * 3 =$6000
2 (a) CALCULATE NET PROFIT OF TT
IT WAS 14%
(B) TREND OF NP
IT WAS FALLING.ALTHOUGH SALES REVENUE OF TT WAS RAISING AND GP WAS CONSTANT I.E $30..BUT TT COST OF GOODS SOLD RAISING MORE THAN SALES REVENUE RESULTING LOW GP.IN ADDITION TT WAS FAILED TO CONTROL ITS OVERHEAD COST..
3)JIT ADVANTAGE:
RL WORKING CAPITAL TT
STORAGE COST MAY FALL
RISK OBSOLESCENCE MAY REDUCE
LOW OPPORTUNITY COST
CONCLUSION:
HOWEVER TO BRING JIT PRINCIPLES IN USE IT IS IMPORTANT TO HAVE RELIABLE SUPPLIER AND FAST DELIVERY TIME
TABLE 2 SHOW THAT ALTHOUGH TT SUPPLIERS FOR MOST OF THE COMPONENTS ARE PREDICTABLE BUT DELIVERY TIME IS VERY SLOW. SO IT IS NOT ADVISABLE FOR TT TO USE JIT STOCK MANAGEMENT SYSTEM.
4)NEW PAYMENT SYSTEM MAY SOLVE PROBLEM OF LOW SALES AND CUSTOMERS COMPLAINTS DUE TO LATE DELIVERIES:
BY INTRODUCING PIECE RATE INSTEAD OF TIME RATE OUTPUT OF WORKERS MAY RISE..BUT IN SEARCH OF QUANTITY THE MAY SACRIFICE THE QUALITY OF TRACTORS.
USING BONUS FOR THOSE WORKERS WHICH COMPLETE PRODUCTION ON TIME : AGAIN APPLIES SAME PROBLEM OF TT ...AS EVERY WORKER MAY RUSH TO COMPLETE PRODUCTION ON TIME WHICH MAY SACRIFICE THEIR QUALITY.
BY ENDING OVERTIME PAYMENT WORKER OUTPUT MAY FALL AS TO COMPLETE LARGE ORDERS WORKERS ARE EXPECTED TO WORK OVERTIME
BY ENDING PROFIT SHARING AGAIN WORKS OUTPUT MAY GREATLY FALL AS THEIR FINANCIAL REWARDS MAY END
CONCLUSION:
IT IS NOT GURANTEED THAT NEW PAYMENT SYSTEM MAY HELP TO SOLVE THE PRB.
TT HRM SHOULD USE NON FINANCIAL REWARDS TOO IN-ORDER FOR LONG TERM WORKER MOTIVATION E.G WORKER PARTICIPATION JOB ENRICHMENT TEAM SPRIT
VARIANT 22 SOLUTION
1(A) ECONOMIES OF SCALE: FACTORS WHICH LEAD TO LOW AVERAGE COST WHEN BUSINESS GROWS IN SIZE.EG PURCHASE ECONOMIES,RISK BEARING,MANAGERIAL AND FINANCIAL.
B)REVENUE(SALES): SELLING PRICE * NUMBER OF UNITS SOLD
IT IS BUSINESS REVENUE EARN FROM SALES..TO COMPUTE PROFIT SALES REVENUE IS REDUCE FROM COST OF SALES.
EG. N.LEE SOLD 2000 UNITS, EACH UNIT SELLING PRICE IS $3..SO HIS SALES REVENUE WILL BE 2000 * 3 =$6000
2 (a) CALCULATE NET PROFIT OF TT
IT WAS 14%
(B) TREND OF NP
IT WAS FALLING.ALTHOUGH SALES REVENUE OF TT WAS RAISING AND GP WAS CONSTANT I.E $30..BUT TT COST OF GOODS SOLD RAISING MORE THAN SALES REVENUE RESULTING LOW GP.IN ADDITION TT WAS FAILED TO CONTROL ITS OVERHEAD COST..
3)JIT ADVANTAGE:
RL WORKING CAPITAL TT
STORAGE COST MAY FALL
RISK OBSOLESCENCE MAY REDUCE
LOW OPPORTUNITY COST
CONCLUSION:
HOWEVER TO BRING JIT PRINCIPLES IN USE IT IS IMPORTANT TO HAVE RELIABLE SUPPLIER AND FAST DELIVERY TIME
TABLE 2 SHOW THAT ALTHOUGH TT SUPPLIERS FOR MOST OF THE COMPONENTS ARE PREDICTABLE BUT DELIVERY TIME IS VERY SLOW. SO IT IS NOT ADVISABLE FOR TT TO USE JIT STOCK MANAGEMENT SYSTEM.
4)NEW PAYMENT SYSTEM MAY SOLVE PROBLEM OF LOW SALES AND CUSTOMERS COMPLAINTS DUE TO LATE DELIVERIES:
BY INTRODUCING PIECE RATE INSTEAD OF TIME RATE OUTPUT OF WORKERS MAY RISE..BUT IN SEARCH OF QUANTITY THE MAY SACRIFICE THE QUALITY OF TRACTORS.
USING BONUS FOR THOSE WORKERS WHICH COMPLETE PRODUCTION ON TIME : AGAIN APPLIES SAME PROBLEM OF TT ...AS EVERY WORKER MAY RUSH TO COMPLETE PRODUCTION ON TIME WHICH MAY SACRIFICE THEIR QUALITY.
BY ENDING OVERTIME PAYMENT WORKER OUTPUT MAY FALL AS TO COMPLETE LARGE ORDERS WORKERS ARE EXPECTED TO WORK OVERTIME
BY ENDING PROFIT SHARING AGAIN WORKS OUTPUT MAY GREATLY FALL AS THEIR FINANCIAL REWARDS MAY END
CONCLUSION:
IT IS NOT GURANTEED THAT NEW PAYMENT SYSTEM MAY HELP TO SOLVE THE PRB.
TT HRM SHOULD USE NON FINANCIAL REWARDS TOO IN-ORDER FOR LONG TERM WORKER MOTIVATION E.G WORKER PARTICIPATION JOB ENRICHMENT TEAM SPRIT