Toyota (GB) have implemented the Entropy System at their head office in Epsom, two training centres in Salford and Nottingham, and two vehicle distribution centres in Portbury and Burnaston. It provides a centralised system for data capture and is used for HSEQ task management. It is also used to manage a range of internal audits for HSEQ regulatory compliance, HSEQ standards compliance and internal process verification/validation.

Toyota (GB) have built their need for compliance systems over a number of years. In 1991 it was felt that for Toyota to compete within the UK fleet market, it would be beneficial to achieve compliance with the quality standard BS5750, which later became ISO 9001. In 1995 a quality department was set up and the various departmental and site systems created over the past 4 years were amalgamated into one centralised management system.

In 1999, as part of their commitment to the environment, Toyota Motor Corporation announced the requirement for all manufacturing sites to achieve compliance with the environmental standard ISO 14001; a second directive soon followed requesting all overseas distributors to follow suit.

In 1999, a new health & safety standard -OHSAS 18001- was also launched and, upon review, Toyota (GB) soon realised that their system for managing health & safety compliance was not as effective as

it could have been.

Both the above events provided the catalyst for a new business objective to develop an integrated (quality, environment, health & safety) management system in accordance with the requirements of ISO 9001, ISO 14001 and OHSAS 18001.

During the development of the integrated management system, it became apparent that their document management system was unable to record business risks, produce audit checklists, manage and report incidents, provide notification of outstanding tasks, handle objectives or manage audits and non-conformances. In 2001 a team of Toyota managers attended “the annual Royal Society for the Prevention of Accidents conference” to review the range of software solutions available and the Entropy System was concluded to be the most suitable application.

The complete Entropy System was purchased in July 2001 and after an intense period of data inputting, triple certification was achieved in September 2001.

The Entropy System is both a user- friendly and cost-effective solution backed up by Entropy International’s willingness to support customer requirements. Working with Entropy International, Toyota (GB) have adapted some aspects of the System for their specific needs and found Entropy particularly helpful in this regard. One such area was the creation of a register for licences and certificates per site, such as fire certificates and forklift truck licences, to aid the management team in easily identifying expiry dates.

Toyota (GB) believe in establishing strong working relationships with their business partners; to this end they also work closely with Entropy International to develop their user- specific requirements in order to benefit other users. These include improvements such as quick identification of active/completed action plans, development of the risk assessment (particularly environmental aspect) methodology, the ability to activate/de-activate sites, removing the ability to assign responsibilities to personnel no longer employed.

Both the vehicle distribution centres employ a large number of contract staff. Despite not being direct employees, the Entropy System has allowed Toyota (GB) to track information pertinent to these contractors for corporate compliance purposes. Toyota (GB) are currently working towards providing their business partners with access to the Entropy System so they can review and input compliance data.

Recent changes in Toyota’s structure have meant that the parts logistics operation has now been transferred from Toyota (GB’s) immediate control to become part of Toyota’s integrated Europe-wide organisation. Whilst it was agreed that the system should still be managed by the Toyota (GB) compliance team, in order to provide Pan-European access, it was no longer viable to host the parts logistics data on the Toyota (GB) web-server. The data was migrated to a hosting environment at Entropy International, which now provides access to the parts logistics management team regardless of their location. Toyota (GB) is dedicated to fulfilling the expectations of their stakeholders, and achievement of the highest health, safety, environment and quality standards is central to Toyota’s philosophy. Kaizen (the Japanese philosophy of continuous business improvement) is used in every area of the business to search for a better way to increase performance, quality and efficiency and thus reduce costs. Toyota’s brand reputation, and protection thereof, is also of paramount importance throughout the organisation and their commitment to compliance is an active part of this. The company constantly review their legal obligations and commitments via the compliance team at Toyota (GB) who manage the impact to the businesses as a result of an ever-changing environment. The Entropy System has been found to deliver on all their expectations.

Question 1

According to the case’s contents, please identify the business challenges as facing by the TOYOTA.

The focus of the answer:

1. The challenging business environment for sustainability

2. which challenges that relate to car industry (Toyota). (refer to the case TOYATA facing those quality standards to meet the quality of Toyota. )

3. The legal aspect for safety  to meet Customers  expectation.

4. conclusion to link to CSR concepts for sustainability.

Jack, Jills and the Buffalo Bills

Before the 2014 season, Cailin Ferrari had conflicting thoughts about continuing her dream of being a member of the Buffalo Jills, (the Buffalo Bill’s cheerleading team) or to seek employment elsewhere. For the past 48 years, the Jills were an important part of the Bills organization, entertaining fans both on and off the playing field. However, after some careful research, the Jills found themselves wondering if they should continue to entertain fans under tense circumstances.

Buffalo Jills

Established in 1967, the Jills began as a permanent replacement for the cheerleaders from Buffalo State College who previously cheered from the Buffalo Bills sidelines. The Jills cheerleaders recognized for their high spirit, dedication, and humanitarian nature, had become a favorite for the city of Buffalo. After 42 seasons of entertaining Bills fans, the Jills established the Buffalo Jills Alumni Association.

Buffalo Bills

The Buffalo Bills, located in Buffalo NY, is currently owned by Terrence and Kim Pegula. In 2016, Forbes reported the team value at one billion, five-hundred million dollars (see exhibit 1). New Era Field, formally Rich Stadium and later Ralph Stadium, has been the home for the Buffalo Bills since 1973. The stadium has a capacity seating for 71,870 Bills fans. NEF is currently within the top 15 in capacity in the National Football League.

Exhibit 1: Bills Value Breakdown

Legal Issues

In April 2014, five former Bills cheerleaders sued the team over a pay system that had them working hundreds of hours for free at games and at mandatory public appearances. Soon after, management suspended the dance team.

The class action lawsuit claimed the Jills cheerleaders were paid below minimum wage and were required to attend unpaid events. The former cheerleaders also alleged that the Jills were wrongly classified as independent contractors and were subjected to policies that violate the state's $8 per hour minimum wage law and other workplace rules (Rodak, 2014). The Jills were not paid for games or practices and had to make 20 to 35 community and charity events each season.

The Jills stated that at some of these sponsored events, they were made to feel uncomfortable by male attendees. They were forced to adhere to strict dress codes and behavioral guidelines set by the team. According to the Jills, the Buffalo Bills controlled everything from their physical appearance to music selection (Garcia, 2016). The Bills organization claimed the Jills were not traditional employees but independent contractors.

In a 1995 ruling by the National Labor Relations Board, the Jills were classified as non-exempt employees. A former employee of Cumulus Broadcasting Co. (formally Citadel Broadcasting Co), named Stephanie E. Mateczun, managed the Jills. The contracts gave Citadel/Cumulus the exclusive rights to run the Jills, and required each member of the cheerleading squad to sign independent contractor agreements that the Jills would not be paid for working Bills games (Davis, 2017).

National Football Association

Currently, only six teams in the National Football Association (NFL) do not have a cheerleading team, either by personal choice or in the Jills case, suspension: Buffalo Bills, Cleveland Browns, New York Giant, Pittsburgh Steelers, Green Bay Packers, and Chicago Bears.

The NFL has remained quiet with this issue. Rodger Goodell, the commissioner of the NFL stated, he had no knowledge of the Jills’ selection, training, compensation and/or pay practices. According to the NFLPA (National Football League Players Association), the NFL protects its players but has no mention of its cheerleader teams. As reported by the NFLPA website, the National Football League Players Association:

Represents all players in matters about wages, hours and working conditions.

Protects their rights as professional football players

Assures that all the terms of the Collective Bargaining Agreement are met.

Decision

New York State Supreme Court Justice Mark A. Montour decided the cheerleaders' 2005 agreement they signed were unenforceable, and that the plaintiffs were non-exempt employees and they were misclassified as independent contractors.

In response to the lawsuit, the Cheerleaders' Fair Pay Act would force team owners to treat the Jills as employees rather than independent contractors. The change would mean teams like the Buffalo Bills would have to comply with much stricter New York labor laws when it comes to cheerleaders' wages and workplace protections. Was the contract negotiable between both parties? Was the contract by the Jills signed under duress? What employment laws did the Buffalo Bills violate? Should the NFL create a regulated pay scale for all NFL cheerleaders?

1.) Discuss the social responsbility (if any) for the NFL and the Buffalo Bills.

2.) Should the NFL creat a regulated pay scale for all NFL Cheerleaders? Or a union for the cheerleading team? Why or why not?

3.) Was the contract negotiable between both parties?

C Programming question part 4: The following program is an emergency hospital patient admitting process. This program needs a few changes to be sufficient for the hospital. Some patients who have been arriving at the Hospital have been providing social security numbers that are not valid. Create a function to scan all of the patient's social security numbers and detect if any of them are invalid. A Social Security Number (SSN) consists of nine digits, commonly written as three fields separated by hyphens: AAA-GG-SSSS. The first three-digit field is called the "area number". The central, two-digit field is called the "group number". The final, four-digit field is called the "serial number". Any SSN conforming to one of the following criteria is an invalid number: Any field all zeroes (no field of zeroes is ever assigned)., First three digits above 740

a. If you detect an invalid social security number, print the patient's name, their social security number, and then either "area number", "group number", or "serial number" to indicate where the problem with the social security number was detected.

#include
#include
#include
#include

using namespace std;

int main() {

char lname[][10]= {"Johnson","Williams","Ling","Albin","Anderson","Baca","Birner","Dominguez","Aimino","Armstrong","Beard","Calderon","Carter","Chaname"," Chaney"}; char fname[][10] = {"Fred","Betty","Hector","Ross","Jason","Elisa","Dalton","Javier","Ann","Addison","Cindy","Yamil","Thomas","Bryan","Kris"}; char middle[] = {'N','L','X','L','O','L','M','B','S','T','J','C','P','D','Z'}; char addr[][50] = {"2763 Filibuster Drive","701 Collage Avenue","1500 Raceway Lane","207 Daisy Avenue","1527 Lewis Road","25 Hunters Lane","851 Applebe Court","1410 Waterford Blvd","2379 Runners Way","46 Hawthorne Drive","1814 Constitution Ct","345 Cigar Row","896 Pine Avenue","24 Blue Belt Drive","2589 College Court"}; cities[]={"Lakeland","Orlando","Tampa","Lakeland","Tampa","Lakeland","Orlando","Orlando","Lakeland","Lakeland","Orlando","Tampa","Tampa" ,"Lakeland","Orlando"};int zip[] = {37643,31234,32785,32643,32785,32643,31234,31234,32643,32643,31234,32785,32785,32643,31234}; char gender[] = {'M','F','M','M','M','F','M','M','F','M','F','M','M','M','F'}; char dob[][11] = {"05/27/1935","11/27/1971","10/17/2003","12/08/1990","11/25/1991","10/30/1992","09/22/1993","08/04/1994","07/11/1995","06/18/1996","05/2 8/1997","04/07/1998","03/12/1999","02/23/2000","01/15/2001"}; char social[][12] = {"164-55-0726","948-44-1038","193-74-0274","458-57-2867","093-00-1093","159-56-9731","695-21-2340","753-66- 6482","852-73-4196","648-81-1456","879-61-1829","123-87-0000","000-65-3197","741-85-9632","963-25-7418"};
vector fullName;
vector zombies_zip;
std::map dups;

char buffer[16];
char buffer2[16];

// for (int i = 0; i < 15; ++i)
// {
// //char buffer[16]; // large enough
// //char buffer2[16];
// strcpy(buffer, lName[i]);
// strcat(buffer, fName[i]);
// cout << lName[i] << " " << fName[i] << " " << buffer << endl;
// cout << buffer << middleInitial[i] << endl;
//
// }

for(int i =0; i < 15; i++){
if(zombie[i] == 'Y'){
zombies_zip.push_back(zip[i]);
}
}

sort(zombies_zip.begin(), zombies_zip.end());

// for (int i=0; i // cout << zombies_zip[i] << "\n";

for(int i : zombies_zip)
++dups[i];

for(auto& dup : dups)
cout << dup.first << " has " << dup.second << " zombies\n";

//cout<<"Last Name: "<< last_name << ", "<< "First Name: " << first_name << " ," << "Middle name: " << middle_name << " ," << "Street address: "<< street_address << " ," << "City: " << city << " ," << "State: " << state <<" ," << "Zip: " << zip << endl;

//printf("Zombie: %c, ""Gender: %c, Date of Birth: %d-%d-%d, Insurance: %c, Social Security Number %s", gender, date_of_birth[0], date_of_birth[1], date_of_birth[2], insurance, social_security_number);

//cout<<"Zombie?: "<< zombie << ", "<< "Gender: " << gender << " ," << "Date of Birth: " << date_of_birth[0] << "/" << "/" << date_of_birth[1] << date_of_birth[2] << " ," << "Insurance?: "<< insurance << " ," << "Social Security: " << social_security_number<< endl;

cout << "Number of patients: " << sizeof(lName)/sizeof(lName[0]) << endl;
cout<<"Number of zombies: " << num_of_zombies << endl;

}

New format for patient record: Last Name, First Name, Middle Initial, Address, City, State, Zip, Sex, Date of Birth, SS #, Zombie?

C Programming question part 3: The following program is an emergency hospital patient admitting process. This program needs a few changes to be sufficient for the hospital. The social security number needs to be encrypted. The hospital would like to do this by having you create a function will accept as input a properly formatted social security number. Then increment each digit by one. If the digit is "9" then make it a "0". Return a properly formatted social security number.

Then create a function that will do the opposite. This function will take an encoded social security number and convert it back into an unencrypted social security number. The de-encoded number is what this function will return.

For each patient, print their full name, their original social security number, their encoded social security number, and then their de-encoded social security number.

a.For each patient, print their full name, their original social security number, their encoded social security number, and then their de-encoded social security number.

#include
#include
#include
#include

using namespace std;

int main() {

char lname[][10]= {"Johnson","Williams","Ling","Albin","Anderson","Baca","Birner","Dominguez","Aimino","Armstrong","Beard","Calderon","Carter","Chaname"," Chaney"}; char fname[][10] = {"Fred","Betty","Hector","Ross","Jason","Elisa","Dalton","Javier","Ann","Addison","Cindy","Yamil","Thomas","Bryan","Kris"}; char middle[] = {'N','L','X','L','O','L','M','B','S','T','J','C','P','D','Z'}; char addr[][50] = {"2763 Filibuster Drive","701 Collage Avenue","1500 Raceway Lane","207 Daisy Avenue","1527 Lewis Road","25 Hunters Lane","851 Applebe Court","1410 Waterford Blvd","2379 Runners Way","46 Hawthorne Drive","1814 Constitution Ct","345 Cigar Row","896 Pine Avenue","24 Blue Belt Drive","2589 College Court"}; cities[]={"Lakeland","Orlando","Tampa","Lakeland","Tampa","Lakeland","Orlando","Orlando","Lakeland","Lakeland","Orlando","Tampa","Tampa" ,"Lakeland","Orlando"};int zip[] = {37643,31234,32785,32643,32785,32643,31234,31234,32643,32643,31234,32785,32785,32643,31234}; char gender[] = {'M','F','M','M','M','F','M','M','F','M','F','M','M','M','F'}; char dob[][11] = {"05/27/1935","11/27/1971","10/17/2003","12/08/1990","11/25/1991","10/30/1992","09/22/1993","08/04/1994","07/11/1995","06/18/1996","05/2 8/1997","04/07/1998","03/12/1999","02/23/2000","01/15/2001"}; char social[][12] = {"164-55-0726","948-44-1038","193-74-0274","458-57-2867","093-00-1093","159-56-9731","695-21-2340","753-66- 6482","852-73-4196","648-81-1456","879-61-1829","123-87-0000","000-65-3197","741-85-9632","963-25-7418"};
vector fullName;
vector zombies_zip;
std::map dups;

char buffer[16];
char buffer2[16];

// for (int i = 0; i < 15; ++i)
// {
// //char buffer[16]; // large enough
// //char buffer2[16];
// strcpy(buffer, lName[i]);
// strcat(buffer, fName[i]);
// cout << lName[i] << " " << fName[i] << " " << buffer << endl;
// cout << buffer << middleInitial[i] << endl;
//
// }

for(int i =0; i < 15; i++){
if(zombie[i] == 'Y'){
zombies_zip.push_back(zip[i]);
}
}

sort(zombies_zip.begin(), zombies_zip.end());

// for (int i=0; i // cout << zombies_zip[i] << "\n";

for(int i : zombies_zip)
++dups[i];

for(auto& dup : dups)
cout << dup.first << " has " << dup.second << " zombies\n";

//cout<<"Last Name: "<< last_name << ", "<< "First Name: " << first_name << " ," << "Middle name: " << middle_name << " ," << "Street address: "<< street_address << " ," << "City: " << city << " ," << "State: " << state <<" ," << "Zip: " << zip << endl;

//printf("Zombie: %c, ""Gender: %c, Date of Birth: %d-%d-%d, Insurance: %c, Social Security Number %s", gender, date_of_birth[0], date_of_birth[1], date_of_birth[2], insurance, social_security_number);

//cout<<"Zombie?: "<< zombie << ", "<< "Gender: " << gender << " ," << "Date of Birth: " << date_of_birth[0] << "/" << "/" << date_of_birth[1] << date_of_birth[2] << " ," << "Insurance?: "<< insurance << " ," << "Social Security: " << social_security_number<< endl;

cout << "Number of patients: " << sizeof(lName)/sizeof(lName[0]) << endl;
cout<<"Number of zombies: " << num_of_zombies << endl;

}

New format for patient record: Last Name, First Name, Middle Initial, Address, City, State, Zip, Sex, Date of Birth, SS #, Zombie?

AN OUNCE OF CURE QUESTIONS:

QUESTION 1

Connie, the 15-year old protagonist, in Oates's story is both fascinated and a bit frightened of Arnold when he first drives up to her house and talks to her.

True

False

2.5 points   

QUESTION 2

In Oates's story, Connie first notices Arnold Friend in his convertible jalopy painted gold:

2.5 points   

QUESTION 3

Why does Arnold tell Connie this: “The place where you came from ain’t there anymore, and where you had in mind to go is cancelled out”?

3 points   

QUESTION 4

What does Oates think about director Joyce Chopra’s decision to have the movie version of Connie survive in the end?

3 points   

QUESTION 5

In "Where Are You Going…" Connie’s older sister is named ___________ and she works at the ________.

3 points   

QUESTION 6

What was another fairy tale allusion for Smitty, alias Arnold Friend, which involved a musician who used his hypnotic musical powers to lure children?

3 points   

QUESTION 7

Who says this and why? “Don’t hem in on me. Don’t hog. Don’t crush. Don’t bird dog. Don’t trail me . . . Don’t crawl under my fence, don’t squeeze in my chipmunk hole, don’t sniff my glue, suck my popsicle, keep your own greasy fingers on yourself.”

3 points   

QUESTION 8

Joyce Carol Oates’ story "Where Are You Going, Where Have You Been?" is considered psychological realism partly because Oates blends dream (fiction) and reality in her story.

True

False

2.5 points   

QUESTION 9

According to journalist Don Moser, Tucson’s primary problem wasn’t that Schmid was a mass murderer, but that for years he had successfully functioned as a welcomed member/leader of Tucson’s _______society.

3 points   

QUESTION 10

Identify the part of the story where this description is found: “bathed in a glow of slow-pulsed joy that seemed to rise mysteriously out of the music itself and lay languidly about the airless little room, breathed in and breathed out with each gentle rise and fall of her chest.”

3 points   

QUESTION 11

If Arnold Friend is symbolically the Devil, as deceiver and seducer, why doesn’t he just walk into the house to grab Connie?

3 points   

QUESTION 12

According to author Oates, Connie’s final act can be considered:

3 points   

QUESTION 13

Oates explains that a film adaptation of her story, "Where Are You Going . . . ?" starring Laura Dern was entitled Smooth Talk.

True

False

2.5 points   

QUESTION 14

At the story’s climax, Arnold warns Connie, “It’s all over for you here, so come on out,” or else he will:

3 points   

QUESTION 15

In Oates's story, Connie’s sister June continually nags Connie about her vanity: “Stop gawking at yourself!”

True

False

2.5 points   

QUESTION 16

In Oates's story, at what point does Arnold’s smile make Connie uncomfortable, as when “these things did not come together”?

3 points   

QUESTION 17

Oates dedicated this story to Bob Dylan who wrote the song, “It’s All Over Now Baby Blue,” and Arnold Friend mentions Connie’s “blue eyes.” What is most ironic about the song, the statement, and the character Connie?

3 points   

QUESTION 18

Arnold’s self-proclaimed symbolic and mysterious sign was ___________drawn in the air.

3 points   

QUESTION 19

Music plays a major background part in this 60’s teenage story. What disc jockey does Connie and Arnold mention?

3 points   

QUESTION 20

According to Oates’ written narrative at the final moments of the ending, how did Connie really feel?

3 points   

QUESTION 21

Author Oates explains that in the story’s ending Connie finally “crosses over” and heroically sacrifices herself; but the nature of the sacrifice is unclear.

True

False

3 points   

QUESTION 22

Why doesn’t Connie just pick up the phone and call the police when Arnold is threatening her?

3 points   

QUESTION 23

What character speaks this in the story? “She makes me want to throw up sometimes.”

3 points   

QUESTION 24

In Oates's story, Arnold Friend reveals “devil-like” characteristics when he strangely questions Connie about the old lady who lived down the road, while Connie keeps telling him, “She’s dead--.”

True

False

2.5 points   

QUESTION 25

Identify the character in this description: “wore a bright orange shirt unbuttoned halfway to show his chest, which was a pale, bluish chest and not muscular . . . shirt collar was turned up.”

3 points   

QUESTION 26

Smitty, the real life “Pied Piper” of Tucson, was sort of a folk hero to adolescents, particularly the bored and lonely delinquents (read Moser's article).

True

False

2.5 points   

QUESTION 27

In Oates's story, what are Arnold’s first words to Connie at her house?

3 points   

QUESTION 28

The fairy tale titled ______________ is a literary allusion to when Arnold Friend looks at Connie: “He grinned to reassure her and lines appeared at the corners of his mouth. His teeth were big and white.”

3 points   

QUESTION 29

Similar to the real-life murderer Smitty, what did Arnold Friend change of his appearance to make himself seem taller?

3 points   

QUESTION 30

At the story’s end, Connie spares her family a possibly violent encounter by calling the police.

True

False

2.5 points   

QUESTION 31

In Oates's story, a most likely description of Connie’s and her mother’s relationship in the written narrative is that:

3 points   

QUESTION 32

In Oates's story, when Arnold visits Connie at her house, AT FIRST she notices:

3 points   

QUESTION 33

In "Where Are You Going," At the story’s end, Arnold and his friend Ellie kill Connie in her house.

True

False

2.5 points   

QUESTION 34

In Oates' story, Arnold Friend represents the evil side of the famous songwriter, Bob Dylan

True

False

2.5 points   

QUESTION 35

According to Don Moser's article, Charles Schmid, Oates’ prototype for Arnold Friend, bragged to Tucson girls that he knew a hundred ways to make love, ran dope, and that he was a Hell’s Angel.

True

False

Read and study all the material and the Case Study: American Investment Management Services

Read and study all the material and the Case Study: American Investment Management Services in Week 9 before beginning the final exam. “Exhibits” are found in that Case. Then answer the following questions about the Case Study: American Investment Management Services:

#3. Noting that excess capacity is charged back to active accounts, if AIMS scaled back to 3,000,000 active households and planned only a 10% excess capacity reserve for future growth, a large proportion of cost could be eliminated. Estimate how much of total cost for 1999 could be eliminated, based on facts presented in the case.

American Investment Management Services (AIMS)

Kim Davis, Executive Vice President ofAIMS, sat in her 43rdfloor corner office overlooking the Manhattan skyline, reflecting on the challenges facing the investment services business in 2000. Profits had come easily during the longest economic expansion ofthe century. However, signs ofweakness in the economy,

financial market volatility, intense competition for high net worth customers, and the proliferationofcomplex technology-dependent products were all making her life much more complicated AIMS had recently invested in new analytic tools to help think more strategically about its operations and customers. Kim wondered how much the new analytic approach would really impact business decision-making. Was intensive customer segment analysis a real opportunity orjust another "shot in the dark?"

AIMS is one of the larger investment services providers in the U.S., approaching $500 billion in assets in 2000. Ofthis total, a little more than halfwas in mutual funds and the balance in brokerage accounts. This case deals with customer profitability assessment for AIMS' 3.9 million households, up from 1.8 million in just four years. Until I999, AIMS had no system for measuring the profitability of any specific customer.

SEGMENT A TION

AIMS spanned two separate and very different product lines (mutual funds and full-line brokerage services), but that was only one element of the complexity it faced. In addition to this product complexity, it also spanned three distinct "distribution channels" (Call Centers, Full Service Branches, and E-business), and a complex array of customers with diverse asset holdings, trading patterns, investment objectives and service requirements. There was no particularly sharp focus on what kind of households to add. The basic idea was high wealth, but that was not pushed exclusively at all. Basically, AIMS wanted to do business with the same 2 million American households (over $1 million in invested assets) that 2 I other major financial services firms were pursuing.

In I999, AIMS introduced segment analysis, starting with a four-way segmentation that mixed three different dimensions: asset holdings, trading activity and age (as a proxy for investment objectives). The first segment was any household with more than $500,000 in assets under management at AIMS ("High Net Worth," or "HNW''). Failing this test, the second segment was households trading more than 36 times in I998 ("Active Traders," or "AT"). Failing this test as well, the third segment was households where the principal customer was already retirement age (60 years old). Finally, customers failing all three of these tests comprised the fourth segment-all other, termed "Core" customers. "Core," with more than 70% of all households, was the largest segment.

The primary role of any segmentation is to facilitate analysis leading to management actions tailored to the specific needs of defined customer subgroups. No particular segmentation is ever beyond dispute. Whatever approach is chosen necessarily emphasizes some distinctions and de­ emphasizes others. But, the AIMS segmentation was particularly contentious on two grounds: I) it segmented current customers rather than a market. It is as if Procter & Gamble were to segment the detergent market based on how many pounds of Tide are purchased; 2) the sequence specific classification scheme meant that labels could be misleading: for example, the segment Active Trader applies only to households which are not each HNW. And, "Retiree" applied only to households which were not each HNW or AT.

2

AIMS

FINANCIAL RESULTS

As shown in Exhibit I, AIMS did quite well in 1999. Net margin afteJ tax was about $156 million on an underlying equity investment of about $625 million. But, 1999 represented the height of the prolonged bull market. The year 2000 was projected to be much less bullish, and most Wall Street observers envisioned the next few years to be much less rosy than the previous ten.

Even in 1999, performance was not consistent across all the customer segments. Pre-tax margin ranged from a high of48% for HNW, to only 6% for Retirees and minus 4% for Core.

The revenue breakdown across segments in Exhibit I is based on actual identification with individual customers. The expense breakdown starts with an annual "unit cost" study that uses "Activity-Based Costing" (ABC) principles. The study first assigned all operating costs from the General Ledger to specific processes or "activities." Then, the activity costs were divided by throughput measures for each activity, to create "cost per unit of activity" for each sub-stage of each process. This process is illustrated in Exhibit 2 for estimated costs for 2000. Individual unit costs were then multiplied by throughput totals for each segment and aggregated to provide total expenses per segment as shown in Exhibit I, a report format which was new at AIMS in 1999.

THE, CUSTOMER/PRODUCT PROFITABILITY INITIA TIVE

As a management report, Exhibit I was too aggregated to identify actionable issues. In 2000, AIMS undertook a project to take customer/product profitability reporting down to the individual household level to provide more useable, timely, and integrated information for decision­ making. The new system combined unit costs from the annual ABC study with current actual household activity and attributes (e.g., products held, services used, number of trades, number of rep-assisted phone calls) extracted from the Marketing Database to generate profitability by household. The data then were exported into easily queried online analytical processing (OLAP) "cubes." OLAP cubes allow profitability analysis of the intersections among customer attributes, product/service attributes, and channels ofdistribution.

Exhibit 2, which illustrates the first step in this n.ew .system (unit costs across processes), is highly s1mpltfied for purposes of the case. As shown, a "driver" was chosen to proxy the activity in each process­ telephone calls as the driver of activity in the Call Center, for example. Next, a count was made of the total estimated units of the activity for 2000 for each driver­ 7~.l million calls for the Call Center, for example. Fmally, the total cost for the process was divided by the total activity count to calculate cost per unit of activity for that process.

Some ofthe assignments ofcosts to activities and some of the activity measures are "soft," but the activity costs tagged to individual households based on actual household activity are conceptually plausible and at least directionally correct. Similarly, product-specific and service-specific revenues are driven down to a household level. Household profitability calculations are thus based on actual asset holdings, fee-based services consumed and activity usage. The actual system in use allows for 11 categories o f customer revenue and 70 categories o f process cost.

Conceptually, Exhibit 2 represents "long-run average cost" for each activity. It does not attempt to portray marginal or incremental cost because it is not intended for use in short-run cost-volume-profit (CVP) analyses. Since very little cost at AIMS is variable with short-run volume fluctuations anyway, short-run CVP analysis is really just based on revenue changes.

Almost all costs are "step costs" which go up (or down), in chunks as capacity is added to (or deleted from) the system. In a business as fast-growing as AIMS has been in recent years, capacity is typically being added every year in many places across the process value chain ahead o f usage requirements. Thus, there is almost always excess capacity in the system. And, the extent of excess capacity varies across processes, depending on where growth has been fastest and where recent expansions have been made. The analysis in Exhibit 2 divides current cost by current throughput to calculate unit cost. The analysis thus charges any excess capacity to the current users of the process. This is debatable, conceptually, but is not recognized as a practical problem at AIMS.

The expense base grew substantially faster than throughput volume between 1995 and 1999 in anticipation of even greater future growth. In 1995, ~here was about 10% excess capacity (on average) in the operating expense base. Capacity grew at a compound rate of about 26% from 1995 to 1999, versus households growth at about 21%. As a result, excess capacity in 1999 was a much larger percentage of the expense base, across branches, the call center, on-line activity, transactions processing and account maintenance activity. Kim wondered how much of operating capacity was devoted to unprofitable customers.

THE SEGMENTATION REFINEMENT

INITIATIVE

Another new initiative in 2000 to enhance customer profitability analysis involved further refining the segmentation. The goal was to better identify customer clusters that would be responsive to specific managerial actions. Kim Davis was chairing the task force coordinati~g this effort. The primary four-way segmentation was expanded to 11 categories as shown below.

AIMS

3

High Net Worth(> $500,000 ofassets under management) I. (16,000 Households)> $2,000,000 in assets under

management
2. (141,000 Households) - $500,000 to $2,000,000

Active Traders(> 36 trades per year)
3. ( 9,000 Households) - more than 200 trades 4. (12,000 Households) - 60 to 200 trades
5. (19,000 Households)- 36 to 60 trades

Retirees
6. (262,000 Households)- $100,000 to $500,000 in

assets under management
7. (607,000 Households)< $100,000

Core
8. (426,000 Households)- $100,000 to $500,000 in

assets under management
9. (1,762,000 Households) - "Boomers" (40 to 59 years

o f age)
10. (434,000 Households)- "Young Professionals"

(under 40 years o f age)
11. (192,000 Households) - All Other, including

employees

CUSTOMER PROFITABILITY ANAL YSIS

As noted earlier, although the company was very profitable in 1999 as the ten-year bull market continued, the senior management group was concerned about the tremendous range o f profitability across customer segments and about the potential for substantial profit erosion when overall markets slowed down, as was widely anticipated over the next few years. Kim challenged the management team to analyze customer mix carefully to identify problem areas and potential corrective actions.

One new management report now being produced each quarter showed income statements for each of he eleven segments broken down by deciles, starting with the most profitable 10% of households and ending with the least profitable 10%. Not surprisingly, the tenth decile in all eleven segments was unprofitable, even before considering any allocation of marketing expenses directed at acquisition of new customers. It was generally agreed that profitability analysis of current households should exclude all expenditures directly related to new households-either "prospecting" expenses in marketing

or new account set-up expenses in the back office. When the segmentation was ignored, 75% of the bottom decile customers were in the Core segment and 80% had less than $100,000 in assets under management.

The wide range ofprofitability across deciles and segments is summarized in Exhibit 3 for 1999. The aggregate loss on all unprofitable households in 1999 was $248 million. Obviously, unprofitable households are an important concern for AIMS. Kim Davis wanted to identify the roots ofthe problem as clearly as possible.

At a casual level of analysis, an unprofitable household suggests one oftwo responses:

• "Fire" them, because AIMS does not want customers on whom it loses money.

• "Do nothing," because there is usually some compensating business reason for keeping .them-the "loss leader" concept. It is possible to construct a long list of reasons to choose to

keep any one currently unprofitable household. At a deeper level of analysis, an unprofitable household suggests that AIMS change its behavior (or the household's behavior) to convert the household to profitable status. In general, there are three ways to convert unprofitable households into profitable ones:

• Raise prices.
• Substitute less expensive for more expensive

services.
• Reduce the cost of delivering some (or all)

services.
Exhibit 4 presents activity profiles o f six

individual tenth decile households chosen to highlight management problems across different segments. Each household presented in Exhibit 4 proxies for thousands of households with the same general profile. The activity profile of the "average" account is also shown for comparison.

Preliminary discussions about "improving customer profitability" focused on the 2000 forecast for representative "problem households" such as those depicted in Exhibit 4. Management wanted to consider both revenue enhancement proposals and service containment proposals.

Potential Account Profitability Enhancement Programs

l)

2) 3)

4)

5) 6) 7)

Charge $15. per rep-assisted call, over 50 calls per year (22,000 l0th Decile Households generate more than 50 calls/year)
Charge $.02 per quote over 100 per transaction Charge a minimum annual fee on brokerage assets or mutual fund assets of $200 or 20 BP, whichever is greater (a fee for the right to trade, even when trading is very inactive)

For customers who generate less than $560. revenue per year (the average), limit access to branches and customer representatives:

charge $100. for branch consultations
- route all incoming calls to the automated

answering service, bypassing account reps Charge $.75 for automated calls over 300 per year.

Charge $1.25 for on-line visits over 10 per transaction.
Set a minimum balance for all new accounts of $50,000 of assets invested (perhaps exempt persons under 35 years old), and a minimum balance of $75,000 of assets invested for persons over 45 years old.

4 AIMS

(Research indicated that AIMS only had about 40% of the invested assets of its custo)llers, on average. The other 60% was invested elsewhere.)

Each ofthese proposals was modeled on charges levied by one or another of AIMS' major competitors, including Charles Squibb, Morton Staley Dan Withers, Merry Lurch, or United Express. Other competitors such as Towncorp Bank or County Road Financial Services approached this problem by limiting their offer of investment advisory services to customers with more than $1 million in invested assets. A good question was why AIMS bothered at all with low net worth customers when so many of them were unprofitable now and likely to remain so.

Questions:

Which are the potential sources of “hidden profitability” that you detect for AIMS?

Why is the firm facing this situation? How can this be prevented towards the future?

What is your opinion of the process the firm followed to assess the customer profitability?

How would you use this information to improve your business?

Typhoid Mary’s Pandemic The City of Covid, located in Corona County, in the province of Ontario, was having a contagion outbreak. A novel disease had been spreading around the world. Although the death rate was very low and was restricted to the elderly, this disease was very contagious and spread through aerosol contact. Which meant that the moisture that people exhale could carry this virus to anyone. The virus had been found to be potentially deadly to the elderly and people who suffered from untreated diabetes, lung conditions such as asthma or immune-compromised due to other medical treatment. The result was that, although most people would suffer only flu like symptoms, some people with family members who were over the age of 50, could bring the virus home and expose the vulnerable people to the disease. Under the provincial legislation, the Health Protection and Promotion Act, R.S.O. 1990, c. H.7, the government can establish regional Public Health Boards who have the jurisdiction to establish Public Health Standards and Practices to protect the public from many things, including contagious diseases. Because of this most recent novel virus outbreak, Corona County’s Public Health Board has established rules for the opening and closing of certain businesses, the daily practices of certain businesses, and the requirement that people can only gather in small groups of 10 or less and requires everyone to wear a mask or face protection of some kind when in public and in stores, schools and shopping malls. All businesses that have been allowed to remain open are required to post signs explaining the rules, post staff at the door to ensure compliance, and provide disinfecting stations and free masks to those who enter their premises. Everyone in Corona County is aware of the disease’s signs and symptoms and the high incidence of the disease in their county. The Public Health Board’s Rules are published everywhere in the county. The Public Health Board had shut down the town for weeks. Everyone was required to stay home, and most people were either working from home or unemployed, collecting a government subsidy (which actually worked out to be better than working for minimum wage.) Then they eased restrictions. Typhoid Mary woke up Monday with a fever and a cough. She remembered that she had been at a private party last weekend. It was a huge party with well over 100 people. Everyone was so tired of being cooped up at home so long that when they saw Ronny Rebel’s post on Instagram about a little bonfire he was having at his cottage, just outside Covid City, everyone wanted to go. Although the plan was to be outside with only 10 of his friends, it rained that night. So all 147 people who arrived were in the tiny cottage for the night. All of the expected activities took place as if there was no such thing as a pandemic. The few partiers who wore masks had them off within the first hour. Mary vaguely remembers that she spent a lot of time dancing with some very drunk people. The music was loud, and people were shouting just to hear each other. Because the government subsidy had been cancelled, Mary knew she had to go to work. Her rent was due, and she was overdrawn at her bank. She was stressed about money. She thought that maybe a coffee would make her feel better, so she went to her local coffee shop owned by her friend Sonny Survivor. Sonny had been willing to break the rules from the start. He was determined not to lose his business and life savings so he found ways to stay open using drive-up door service and Fluber Eats (a food delivery app.) He had a hand sanitizer station at the door, but he knew the bottle had been empty for days. He could not afford to refill it. And he thought in principle he should not have to supply everyone with hand sanitizer. Although he had the mask sign posted on the door, his employees all agreed that the government had gone too far to create the mask law so they never enforced the mask rule and many customers came in without one. Often customers would have their masks under their chin or under their nose because they knew Sonny and his employees would not say anything. While Mary stood in the line up for almost 5 minutes, she wore her mask a little while. Soon she was too hot, and she lowered it. Belligerent Bob was in line behind Mary the whole time with his mask down around his neck. Although he did not know her, he spoke loudly to Mary and everyone else in the place, a few times about crazy this whole mask thing was. He explained the conspiracy theories for everyone to hear. Mary smiled because she wasn’t sure, but she thought she recognized him from Ronny’s party. Bob got his coffee and headed off to his job as a janitor at the Weary Wrecks Retirement Home and Hospital. When Bob got to work, they did his daily health screening as required by the new rules. They would ask him about how he felt and if he had been at any large gatherings or had been travelling. Everyday he did this and everyday he said “No.” Everyone knew Bob had just come back from a three-week vacation in Italy. But he seemed fine and his boss, Haggard Hal, was having a hard time finding people who would work for minimum wage, so he really didn’t pay attention to the screening process. He was just happy people came to work. There were a lot of hand sanitizing stations in the Home and he supplied free masks, so he thought it was taken care of. Many family members of the residents complained about the masks and refused to wear them when they visited. When Mary got to work as a cashier at the Drug Store, she put on a fresh mask and went quickly past her boss Sue Scramble. Sue was trying to clean the cash stations and screen her employees at the same time. She was in a hurry and had to get the store opened on time. She had run out of her disinfecting spray but didn’t want to take any off the shelf for fear the owner would be mad. So, she just used water with a little bit of soap. She forgot to screen Mary. Mary served 112 people that day. Some wore masks and some didn’t. She shared the cash register with Vicky Victim. Vicky was a 62 year old woman who lived with her mother who suffered from an immune deficiency. But Vicky hated the smell of hand sanitizer and so she didn’t use it often. Mary did some shelf stocking when the store slowed down. Sue was just happy when people pitched in. When leaving work, Mary stopped at the grocery store because she thought she would benefit from some healthy soup. The store was crowded, and the owner, Greedy Gus was watching the door to keep the numbers under the 10 he was allowed to have in the store at once. He asked Mary what she was there for. She said just some soup. So, he let her in even though there were already 15 people in the store. Some refused to wear a mask. Gus didn’t fight them on it. Mary walked right by the hand sanitizing station and started picking up cans of soup to read ingredients because she was vegan. The next day Mary called in sick and told Sue she “might have been a little sick yesterday.” Sue had been having difficulties with the owner of the store, Tyrannical Tom. She was afraid he was going to fire her. She thought she might have had to tell him about the illness according to the Health rules, and he would have to tell the Public Health Office. But she told Mary to go get a test, and she decided to wait until that test came back before she told Tom. Mary felt better after a few days. Although she tested positive for the virus, she was young and rebounded well. She had to remain quarantined however, for another 10 days and she was bored again. So, she turned on the TV. The local news station was talking about an outbreak in her town. Four people had died at the retirement home. Another seven were sick. The police were looking for information about a big party at a cottage. The local drug store had been shut down. The Public Health had issued a statement that backward tracing had isolated a problematic grocery store and anyone who had been there was being told to get a test. People in the neighbourhood were talking about the days they were in the stores and were hearing about the backward tracing leading to the sick people who spread the disease. She got a text from her colleague Vicky saying her mother was taken to the hospital and was on a ventilator. Her friends messaged her saying that Sonny at the coffee shop was sick and he was closed down. Mary began to wonder…..

Template Questions for the Week 3 Case Study In the attached scenario there are many examples of negligence. We all know Mary was negligent, but there is no point in suing her because she has no money. So, like a good lawyer, focus on the other examples of negligence where you have someone worth suing. Do not use Mary’s negligence to answer these questions.

Describe in detail TWO (2) of the examples of Negligence in the above scenario. Use the following points/questions to guide your detailed description for each Tort: Pick two examples of negligence from the scenario. State them. Explain in detail the elements of negligence. Explain in detail the Facts from the scenario that give rise to negligence and satisfy each of the elements Explain in detail if there is any Defense or Contributory Negligence which could reduce the damages. Explain in detail the types of damages arising from the negligence and what they might be worth.

Girl Scout Cookies and the Snack Tax

State sales taxes often exempt food purchased for at-home consumption to help relieve regressivity. However, that exemption causes substantial loss of revenue. Furthermore, some people question the nutritional value of certain items exempted under the food label and doubt the wisdom of losing revenue in a tax structure to provide relief to such purchases. In difficult fiscal times in the early 1990's, a few states sought additional revenue by narrowing the food exemption, particularly by removing some of these questionable categories from the exempt list. These new laws and their enforcement have produced policy problems testing the resolve of the legislators and tax administration.

In the 1991 legislative session, Maine passed a package of tax changes designed to increase revenues by $300 million annually. (Total tax collections in fiscal 1990 were $1,560.9 million.) thee changes included higher income taxes, an increase in the state sales and use tax rate from 5 to 6 percent, and a revision to remove snack food from the "sales of grocery staples" category, which was then exempt from the state sales and use tax. The new law was estimated to yield $10 million annually. The new law taxed snack food, as defined by the legislature.

14-C. "Snack food." Snack food means any item that is ordinarily sold for consumption without further preparation or that requires for preparation other than combining the item with a liquid; that may be stored unopened without refrigeration, except that ice cream, ice milk, frozen yogurt, and sherbet are snack foods; that is not generally considered a major component of a well-balanced meal; and that is not defined in this section as a grocery stable. "Snack food" includes, but it not limited to, corn chips, potato chips, processed fruit snacks, fruit rolls, fruit bars, popped popcorn, pork rinds, pretzels, cheese sticks and cheese puffs, granola bars, breakfast bars, bread sticks, roasted nuts, doughnuts, cookies, crackers, pastries, toaster pastries, croissants, cakes, pies, ice cream cones, marshmallows, marshmallow creme, flavored powdered liquid drink mixes or drinks, ice cream sauces, pudding, beef jerky, meat bars and dips. (36 Maine Revised Statues 1752 [1992].

The lawmakers soon dissevered that the expansion of the sales and use tax base had some unexpected consequences, particularly with he regard to the finances of Girl Scouts. Two councils, the Abnake and Kennebec, served about 19,500 girls in Maine, and 60 to 65 percent of their revenues came from cookie sales. Because neither council was qualified to purchase inventory for resale as a registered reatiler, and then charge sales tax on each transaction, the councils now had to pay tax on their cookie purchases. That amounted to around $58,000 or almost 2 percent of cookie revenue (they paid tax on the wholesale price of about 80 cents per box).

The two councils responded differently to the new tax. Abnaki raised its cookie prices from $2.25 to $2.50, but sales fell 7 percent from the prior year. Kennebec lacked sufficient time to react, so it had to absorb about $40,000 in cookie losses. However, neither council thought the new tax was fair. Jo Stevens, executive director of the Abnaki Council, voiced the general view: "We're not selling groceries. We're raising charitable contributions." Of course, the problem for sales tax policy was, indeed, because they weren't selling groceries.

The Joint Taxation Committee was generally sympathetic. Its co-chair, Senator Stephen Bost said, "We had not intended as a committee to include... Girl Scouts in the snack tax." However, proposed legislation to exempt Girl Scout and related organizations (including the pre-popped popcorn sold by Boy Scouts) would cause a revenue loss of around $175,000 annually, and the state had no clear way to name it up. (Incidentally, candy had been taxed for some time, but candy sales by school groups and parent-teacher organizations are exempt.)

Discussion Question:

What should Maine do? Here are some options (1) do nothing - the tax is working as it should; (2) direct the Bureau of Taxation to rewrite the institution; (3) repeal the snack tax; (4) exempt sales and purchases by the Girl Scouts and similar organizations; (5) require the Girl Scouts to register as retail merchants, buy their cookies using the resale exemption, and collect sales tax on their cookie sales; and (6) exempt sales and/or purchases by all youth or charitable organizations. (You may think of other possibilities.) Use the standards for revenue policy evaluation (yield, fairness, economic effect, and collectability) to test options and provide a recommendation. Explain which approach is most consistent with the logic of sales taxation. Which parties would have an interest in the eventual outcome of the discussion? What is your overall view of the snack tax, without respect to the Girl Scout issue?