David Stern, Commissioner of the National Basketball Association (NBA), scanned the arena from his courtside seat at the sold out Toyota Center in Houston, TX during the 2004 Western Conference Playoffs game between the Houston Rockets and the Los Angeles Lakers. The video commercials and fan-response prompts he viewed on the high-tech scoreboard reminded him of how far technology had progressed since he first took the helm of the league in 1984. The NBA’s tremendous growth that stemmed from increased revenue opportunities through state-of-the-art facilities had begun to taper off since there was only one team left in the league that had yet to move into a modern arena. Now, the NBA leadership team spent much of its time pondering ways to offer fans alternative options to experience the NBA using cell phones, video games, and other innovative media channels of communication. While Stern contemplated how the league would continue to benefit from new technological advances, he noticed fans waving pictures of Yao Ming, a 7-foot 6-inch player from China. Stern’s global vision of the NBA was slowly coming to fruition through the recent influx of international players and the NBA’s initiatives to broadcast and market games internationally, yet he believed there was a much greater potential to be realized. Stern still had a few months to prepare for the annual Board of Governors meeting. In front of the NBA’s owners, Stern would deliver a “state-of-the-league” address and unveil a plan for confronting the league’s challenges and systematizing recommended changes across the league’s 30 teams. While the league was healthy on most fronts, team owners were recently alarmed after receiving reports indicating that revenues were down even though overall attendance had increased during the 2003- 04 season. Additionally, the league had just withstood several public relations disasters involving a few high-profile players and was facing the perception from many fans that the quality of play had diminished. Stern reflected on the competing demands and wondered how to prioritize and sort them out. The following morning, Stern would meet with Russ Granik, Deputy Commissioner and COO, and Adam Silver, President and CEO of NBA Entertainment, to begin thinking through a strategy. Just as Stern turned to Granik to remind him of the meeting, the crowd erupted as Yao Ming scored a last second shot to send the game into overtime. By 2003, the NBA had grown to include 29 teams, and had plans to expand to 30 teams in 2004.8 Each team was independently owned, either by an individual or by an ownership group. The NBA’s league office intended to work “for” the owners and was primarily responsible for operating the league.9 Revenue and costs for the league were largely driven by collective individual team activity. In 2002, 41% of the league’s revenue came from each team’s gate receipts, 45% from the league’s television contract with national television networks to broadcast NBA basketball games, and 12% from other sources including sponsorships, licensing partnerships, concessions, and preseason promoter fees.10 Of the league’s costs, over 63% were due to player salaries, which had escalated significantly over time (see Exhibit 1).11 The remainder of the league’s costs was split evenly among team basketball operations, promotions, arena rentals, and general & administrative costs.12 The league office was funded by 6% of each team’s gate receipts, and all other gate receipts were kept by each individual team.13 All national revenue—including licensing and national TV deals—was split evenly amongst all 29 teams.14 However, each team retained any local television revenue it generated.15 Over the years, the league had implemented a number of measures to control costs and distribute money equitably across the league. These measures were captured in a collective bargaining agreement (CBA), which is negotiated between the owners and players. In 2004 the league had a salary cap in place that attempted to “cap” the amount of money that each team spent on player salaries, generally at 55% of Basketball-Related Income (BRI, or the sum of gate receipts and national television revenue).16 However, there were numerous exceptions that enabled teams to exceed the cap in order to retain players. Although the league had numerous sources of revenues and costs, there were a handful of critical factors that drove the financial success of the NBA. The overriding factor, according to senior league management, was the quality of play and the excitement generated over the 82-game regular season and the post-season playoffs. Granik noted that “the key to this league is the public perception of our product, the quality of the games being played on the court, the level of competition between the teams, and the expertise of the athletes involved.”17 Mike Bantom, Senior Vice President of Player Development, summed up the league’s critical success factor as “exciting, competitive basketball games that would effectively compete against other entertainment options for the consumer.”18 Others tied the success of each team to its respective win-loss record. Bob Criqui, the league’s SVP of Finance, noted that “even more importantly than the win-loss record, a team must inspire hope among its fans. If a team’s fans believe that the team will be successful, the fans will actively cheer for the team, and come to watch the team’s games.”19 All mentioned that it was difficult to quantify or measure this critical success factor, but agreed that the excitement of the game translated into strong attendance, TV ratings, and scoring averages. Exhibits 2 and 3 present recent attendance levels and TV ratings for the league. Another success factor often cited by league executives was the image of its players, both on and off the court. Granik noted that “how people perceive our players is certainly an issue for us.” NBA League Office Overview The NBA league office, headquartered in New York City and Secaucus, NJ, consisted of five main entities—NBA League Operations, NBA Entertainment, NBA International, the WNBA, and the NBDL—which all reported to the Commissioner’s Office, led by Stern. Exhibit 5 presents the NBA organizational structure. NBA League Operations, headed by Granik, governed the basketball side of the league, including game scheduling and officiating, and oversaw league administrative duties, such as finance, human resources, and security. Other divisions, such as Player Development, worked closely with NBA teams to promote best practices and to ensure that teams adhered to league guidelines. NBA Entertainment, led by Silver, housed all revenue-generating properties at the league level, including the NBA Store and NBA TV. NBA International consisted of satellite offices situated to maximize revenue and marketing opportunities abroad. Similar to NBA League Operations, the WNBA and the NBDL offices served as governing bodies for their respective leagues. WNBA In the fall of 1996, the NBA launched the Women’s National Basketball Association (WNBA) as a wholly-owned subsidiary of the league so that the eight WNBA teams would be collectively owned by the NBA’s 29 owners, unlike NBA teams which were franchised individually to owners. Eight inaugural teams would begin play during the summer season of 1997 in the following NBA team cities: Charlotte, Cleveland, Houston, New York, Los Angeles, Phoenix, Sacramento and Utah. Although the WNBA league office managed many aspects of WNBA team operations such as negotiating player contracts and disbursing player salaries, the affiliated NBA teams were responsible for using existing resources and/or hiring employees to fulfill the league’s mandated operational and sales requirements. Within four years, the WNBA had expanded to 16 teams, all of which were affiliated with existing NBA teams. After the 2002 season, the league decided to shift WNBA team ownership from the NBA to each affiliated team. At this point, NBA owners were given the option to purchase and gain full control of their corresponding WNBA team. All the owners accepted the league’s offer with the exception of those in Portland, Orlando, Utah, and Miami. Subsequently, two of the teams relocated to other cities with owners who wanted a WNBA team, while the other two teams dissolved. Beginning in the 2004 season, the WNBA consisted of 13 teams. National Basketball Development League (NBDL) In the fall of 2001, the NBDL, a minor league wholly-owned by the NBA, became the league’s official training ground for team staff, officials, and players who met the minimum 20 year age requirement. The NBDL tipped off with teams in Asheville, NC; Charleston, SC; Columbus, GA; Fayetteville, NC; Greenville, SC, Huntsville, AL; Mobile, AL; and Roanoke, VA. NBA Board of Governors Major strategic decisions for the league were approved by the NBA’s Board of Governors. The Board of Governors comprised the owners of all 30 NBA teams, each of whom controlled a vote. David Stern was the Chairman of the Board, and the Board met twice annually. As the league became increasingly successful, the nature of the Board of Governors changed as team ownership changed hands. New owners such as Howard Schultz (Owner of the Seattle Supersonics and Chairman of Starbucks Coffee), Mark Cuban (Owner of the Dallas Mavericks and co-founder of Broadcast.com and current CEO of HDNet), and Joe and Gavin Maloof (Owners of the Sacramento Kings and Co-CEOs of Maloof Sports and Entertainment) began to take a more proactive approach to the management of their teams and their role on the Board of Governors. As Silver explained, “the biggest difference with the current Board of Governors is that we have much more substantive discussions about the business decisions of the league, which David actually encourages. We still have a ‘strong commissioner model’, we just have a much more active board. We now have owners on the board who spent $10 million on their team, and owners who have spent $300 million on their team. There is clearly going to be a difference in the demands from these two different sets of owners with regards to the direction of the league.” National Basketball Players Association (NBPA) The NBPA was the NBA players’ union that negotiated the Collective Bargaining Agreement (CBA) with the NBA. The CBA defined the rules of interaction between the players and the league on multiple fronts, including player compensation, conduct and appearances. As such, the NBA’s major product improvement and development recommendations were typically subject to approval by the NBPA, whose interests were not always aligned with the league’s and team owners. For instance, the league’s attempt to impose a harder player salary cap for purposes of increasing competitiveness across teams was met by extreme opposition from the NBPA during the 1998 collective bargaining period. This dispute, among others, ended after the longest ever NBA lock-out (strike). Consequently, the league suffered considerable financial losses from having to cut the regular season from 82 to 50 games and sustained substantial brand damage from negative media coverage. The NBPA provided its own set of programs and services to the players and, on occasion, would join forces with the NBA’s Player Development department to administer certain programs. All NBA league-mandated programs and appearances in which players participated were negotiated as part of the CBA. Superstar Turnover Much of the NBA’s popularity in the 1980s and 1990s was built on a handful of superstars. The NBA encouraged this by actively promoting its superstars, and turning their burgeoning popularity into booming ratings and attendance figures. Michael Jordan of the Chicago Bulls – perhaps the game’s greatest player and certainly its most popular player – joined the league in 1984 and continued playing until 199827 , after which returned to the league for 2 more seasons with the Washington Wizards in 2001-2003. The contests between Magic Johnson’s Los Angeles Lakers and Larry Bird’s Boston Celtics in the 1980s became one of sports’ greatest rivalries, as these two teams combined to win 8 of 10 NBA titles during the decade. Other charismatic superstars – such as Charles Barkley, Isiah Thomas, Julius “Dr. J” Erving, Dominique Wilkins, and Hakeem Olajuwon – propelled the NBA and created an exciting identity for the league. However, as these superstars began to retire in the early 1990s, the league struggled to identify comparable superstars to capture fans’ imagination in the same way. Fans constantly searched for the “next Jordan”, and throughout the 1990s players like Harold Miner, Jerry Stackhouse, Grant Hill and Vince Carter attempted to fill Jordan’s shoes only to fail. Although the NBA had its stars in the late1990s and early 2000s—including Shaquille O’Neal, Tim Duncan, Kevin Garnett, Kobe Bryant, Tracy McGrady, Allen Iverson and Jason Kidd—many fans were unable to connect to these players in the same way as the superstars of the 80s and early 90s. Was it just a matter of time until these players blossomed into the same types of superstars as those of the days of old, or did the existence of these new players require a different approach for the league? Negative Off-the-Court Image of NBA Players The league suffered incalculable damage to its image during a 6-month long work stoppage (better known as a “lockout”) of the players that eliminated 32 games from the 1998-99 NBA season as a result of contentious negotiations between the league office and the NBPA. After the lockout was finally settled, many felt the NBA as a whole had lost. Utah Jazz guard Jeff Hornacek said “I wouldn't blame the fans if they didn't come back…neither side is coming out of this thing looking good.”1 All in all, players lost $500 million in salaries, the NBA’s important corporate partners lost significant revenues (Nike reported a 50% drop in fiscal second quarter earnings and a 15% drop in revenues in December of 1998) (Motley Fool), and the NBA’s goodwill amongst fans and the general public was at an all-time low. As one fan stated in a Detroit News article in March 2000, “I hate the NBA and I'm not really a Pistons fan anymore. I'm sick and tired of the bitching players and owners. They're a bunch of big millionaire babies and I'm not going to pay to see them” (Detroit News). Other critical source for this section: The NBA continued to face image problems in 2003, when an ESPN poll revealed that the number one “problem” with the NBA, as perceived by its fans, was “player off-court behavior.” 39 A summary of the poll is presented in Exhibit 10. There were certainly a number of negative off-court incidents involving NBA players in the late 1990s and early 2000s that couldn’t be ignored, including: • All-Star Latrell Sprewell choking and threatening his coach, P.J. Carlesimo, during a practice in December 1997.40 • A scathing 1998 Sports Illustrated article revealing the significant number of paternity suits and out-of-wedlock births among professional athletes. The article mentioned several NBA superstars by name, including Larry Johnson, who was supporting five children by four women, and Shawn Kemp (drafted shortly after his high school graduation), who had fathered seven children out-of-wedlock. Other players highlighted in the article included NBA superstars Patrick Ewing, Juwan Howard, Scottie Pippen, Jason Kidd, Stephon Marbury, Hakeem Olajuwon and Gary Payton, Larry Bird, and Isiah Thomas. Kobe Bryant—three-time NBA champion and mega-superstar, high school draftee, married father with a young daughter—was arrested and charged with the sexual assault of a young woman at a hotel in Colorado during the 2003 off-season. In 2004, David Stern openly discussed plans to expand the league to Europe, noting that “it is not out of the realm of possibility that the NBA could have teams in Milan, Munich, Barcelona and London within a decade.” Many in the league office were excited at the possibility of brand-new revenue sources overseas—including international gate receipts, increased sponsorship and merchandising revenue from international companies and consumers, and a new source of television rights fees (or potentially broadcast-related revenues from NBA TV international telecasts). To many this expansion only seemed natural, and in some cases necessary. Stern noted “90% of our buildings are full at any given NBA game in the U.S…90%! Expansion overseas is the only way to grow this revenue source.” There was already cross-fertilization between the two markets, such as the increased number of international NBA superstars and the burgeoning popularity of NBA players and games in European and Asian markets. The NBA was already working on “seeding” these markets by holding exhibition games in international markets like China and Russia and expanding the presence of NBA TV, which was already in 30 countries in early 2004. Another open question was the future of the NBDL. While initially launched as a “training ground” for team staff, officials and players, many saw the opportunity to transform the NBDL into a true “minor league” for the NBA, which would operate similar to the minor leagues in Major League Baseball. Under this system, each NBDL would “belong” to one or two NBA teams, and the NBA team would have the ability to send a player down to their minor league team, or call them up when they needed a player, all the time retaining their contractual rights. Many saw this as an attractive option in order to handle the increasing number of high school and international players into the league. Upcoming Collective Bargaining Agreement Discussions Looming in the distance was a new collective bargaining agreement (CBA) to be negotiated with the NBPA. The current CBA was scheduled to expire after the 2004-2005 season, and all parties wanted to avoid a repeat of the lockout of 1999. Issues on the table included the percentage of revenues to be allocated to players and owners, the salary cap, the luxury tax, a potential age limit or a NBDL minor league, and any other issue that would have a direct impact on players. One NBA team president noted that one of the most important issues for the league going forward was “to find labor peace without bloodshed, so everyone is a little better off and teams have a chance to make money.” Decisions, Decisions Tomorrow, Stern, Granik and Silver would meet to begin planning for the upcoming gathering of the Board of Governors, where they would present the league’s strategic plan and the organizational requirements to support these strategic goals. As such, the three needed to discuss the competing priorities of the league’s stakeholders, and determine whose issues were most important to the future of the league. On the one hand, the trio would have to grapple with the serious issues that were undermining the league’s short-term vitality with certain segments of its fans. They would also have to address the concerns of the league’s ownership group and players association. Finally, Stern was eager to build consensus for his growth agenda. But how would the owners react to this proposal? How would this translate into the upcoming Collective Bargaining Agreement negotiations with the NBPA? And what systemic organizational changes were required to ensure that these recommendations would take root and sustain themselves across all 30 teams in the league? -------------------------------------------------------------------------------------------------------------------
1.What is the case about?
2.What are the important events that occurred in the case?
3.What can we learn from reading the case?
4.What advice do you have for the leaders in the case and/or company in the case?
In: Operations Management
In Chapter 4 of your book, you created an interactive application named MarshallsRevenue that prompts a user for the number of interior and exterior murals scheduled to be painted during a month and computes the expected revenue for each type of mural. The program also prompts the user for the month number and modifies the pricing based on requirements listed in Chapter 4.
Now, modify the program so that the user must enter a month value from 1 through 12. If the user enters an incorrect number, the program prompts for a valid value. Also, the user must enter a number between 0 and 30 inclusive for the number of murals of each type; otherwise, the program prompts the user again.
Below is the source code
using System;
class MainClass
{
public static void Main (string[] args) //main function
{
//variable declaration
int month,intmu,extmu,total;
total=0;
string[] arr = new string[] {"January", "February", "March", "April", "May",
"June", "July", "August", "September", "October", "November", "December"};
do
{
//accepting the month value from user
Console.WriteLine ("Enter a month number");
month = Convert.ToInt32(Console.ReadLine());
if(month<1 || month >12)
Console.WriteLine ("Enter a valid value between 1 to 12");
}while(month<1 || month >12);
do
{
//accepting interior mural number from user
Console.WriteLine ("Enter number of interior murals");
intmu = Convert.ToInt32(Console.ReadLine());
if(intmu < 0 || intmu >30)
Console.WriteLine ("Enter a valid value between 0 to 30");
}while(intmu < 0 || intmu >30);
do
{
//accepting exterior mural number from user
Console.WriteLine ("Enter number of exterior murals");
extmu = Convert.ToInt32(Console.ReadLine());
if(extmu < 0 || extmu >30)
Console.WriteLine ("Enter a valid value between 0 to 30");
}while(extmu < 0 || extmu >30);
//displaying the data
Console.WriteLine ("Revenue for the month of "+arr[month-1]);
Console.WriteLine("Number of interior murals : "+intmu);
Console.WriteLine("Number of exterior murals : "+extmu);
//calcultaing the total revenue
total=(100*intmu)+(200*extmu);
Console.WriteLine("Total Revenue : Rs "+total);
}
}
Please provide source code and display response.
In: Computer Science
In 1997 the US CPI was 160 and in 2019 it was 256. The CPI has base year of 1982. Use this information for the following three questions.
27. The average annual percent rate of inflation from 1997 to 2019 was closest to
A. 1.2
B. 2.1
C. 3.1
D. 4.2
28. In 2019, the nominal minimum wage is $11. The real minimum wage increased over this period about how many percent per year?
A. 0.01
B. 0.1
C. 1.5
D. 2.1
EDIT: The nominal minimum wage in 1997 was $5 per hour.
In: Economics
A group of students estimated the length of one minute without reference to a watch or clock, and the times (seconds) are listed below. Use a 0.01 significance level to test the claim that these times are from a population with a mean equal to 60 seconds. Does it appear that students are reasonably good at estimating one minute?
72
81
36
63
45
27
60
66
68
49
62
73
92
89
65
Determine the test statistic. __
(Round to two decimal places as needed.)
Determine the P-value. __
(Round to three decimal places as needed.)
In: Statistics and Probability
Below is a list of topics for you to select from for your Management project:
In: Operations Management
Two-Way Between-Subjects ANOVA
A hypothetical study investigated the extent to which heterosexual men and women were willing to forgive an opposite-sex partner for transgressions in a relationship. Men and women participants completed a questionnaire in which they read five different scenarios about an opposite-sex partner who transgressed in a relationship. After each scenario, participants rated their willingness to forgive on a scale from 1 (not forgive at all) to 7 (definitely forgive). Hence, total ratings could range from 5 (all 1s recorded) to 42 (all 7s recorded). The table lists the data for this hypothetical between-subjects study. Test whether gender and relationship status influenced forgiveness at a .05 level of significance.
|
Relationship Status |
|||
|
Short-Term |
Long-Term |
||
|
Gender |
Men |
18 |
8 |
|
24 |
22 |
||
|
12 |
20 |
||
|
9 |
11 |
||
|
12 |
5 |
||
|
29 |
21 |
||
|
13 |
25 |
||
|
9 |
30 |
||
|
32 |
28 |
||
|
36 |
28 |
||
|
Women |
28 |
18 |
|
|
34 |
32 |
||
|
22 |
27 |
||
|
19 |
21 |
||
|
14 |
14 |
||
|
27 |
32 |
||
|
28 |
25 |
||
|
28 |
24 |
||
|
31 |
25 |
||
|
20 |
25 |
||
Based on the output given in SPSS, Complete the following F table:
|
Sources of Variation |
SS |
df |
MS |
F statistic |
Sig. (p value) |
|
Gender |
|||||
|
Status |
|||||
|
Gender * Status |
|||||
|
Error |
Based on the value of the test statistics, what is the decision for the for each factor in the two-way between-subjects ANOVA (highlight one)
Gender: Not Significant Significant
Status: Not Significant Significant
Gender * Status Not Significant Significant
Write the statistic in APA format
Gender: ________________________
Status: ________________________
Gender * Status: ________________________
In: Statistics and Probability
Question regarding moles:
So I'm having a hard time understanding the relationship between moles, molar mass, atomic/molecular mass, and unified atomic mass units.
Is molar mass and atomic/molecular mass the same thing? It seems like atomic/molecular mass is the sum of all the atomic masses in a substance. The units for atomic/molecular mass is unified atomic units and the units for molar mass is g/moles, so it seems like some type of conversion is happening. A Helium atom has an atomic mass of 4.00 u and a molar mass of 4.00 g/mol. So is 1 u = 1 g/mol? Doesn't that go against the idea that 1 u = 1.66 * 10^-27 kg? I can see that 1g/ mol = 10^-3 kg/mol, but how do you get rid of the mol part? Is it using the notion that in 1mole of gas there are 6.022 * 10^23 molecules to get that conversion because 1.66 * 10^-27 kg needs to equal 1 g/mol if 1g/mol = 1u?
Also physically, what is the difference between the mass of the substance and the atomic/molecular mass? If the substance is just the mass of everything it contains wouldn't that be the same thing as adding up all the molecules making that substance? I'm also assuming that the atomic/molecular mass is the actual mass of the atom or molecule itself, is that the case? Or is it like the mass of the nucleus of each atom (molecular mass would then be the sum of all the masses of all the nuclei). In that case, then the atomic mass doesnt include the mass of the electrons thus creating a difference between the actual mass of the substance and the atomic/molecular mass.
In: Physics
What software features and functions are required to support Ace’s business practices described below?
Please identify at least 24, or more, functions. List these features and functions with sufficient explanationto demonstrate your understanding of the function.
Pick one of the similar systems that you worked with. Compare that system with Ace. Which functions does it provide? Which functions are not available? How well would that system work for Ace?
Background:
Ace Aerospace Fasteners manufactures and sells fasteners, latches and related hardware to the aerospace industry. The fasteners are a combination of standard items and made-to-order items. The standard items are stocked in inventory according to pre-determined inventory levels. Made-to-Order (MTO) items are manufactured to the customers’ specifications. If the customer is a regular customer and the items are ordered on a regular basis, Ace may manufacture the items in quantities that optimize manufacturing and stock the excess.
Ace has three separate facilities. The largest facility is Ace’s Southern California main warehouse and manufacturing facility. The other two facilities are distribution centers in Kansas and Georgia near major Aerospace complexes. The Southern California facility stocks raw materials, work in process, finished goods and supplies. The Kansas and Georgia warehouses stock only finished parts purchased by customers in those geographic areas. So the Kansas distribution center, for example, stocks fasteners used by Boeing’s Wichita Assembly plant while fasteners used by Boeing’s Everett assembly plant are stocked in Southern California.
Ace has some of its fasteners manufactured and stocked in Asia by contract manufacturers. Asian fasteners are shipped to Southern California as finished goods or as raw materials that are components in more complex assemblies. Orders from foreign customers may be supplied directly from the Asian manufacturers.
Ace’s Basic Business Processes
I. Find Prospective Customers, Maintain Contact with Existing Customers
As with other industries, Ace is constantly looking for new business prospects. The good news – the aerospace industry is easily identifiable; the bad news – it is a very competitive industry especially among the subcontractors who supply the major aerospace companies.
To find potential new customers, Ace employees a group of salespeople who are responsible for finding prospective customers as well as selling to existing customers. The salespeople have both a new prospect quota and a sales quota. Their income is a combination of base and sales commission.
To identify prospects, the salespeople attend aerospace conferences and shows, including exhibiting. They subscribe to aerospace magazines. They are constantly talking to their customers regarding their subcontractors and competitors. They track their contacts from company to company as they move around the industry. With the emergence of Social Media and Social Networking, their efforts have expanded to include coverage of various social media sites such as LinkedIn, Facebook and Twitter.
The business problem is tracking all of this information. In the same way that contacts move among aerospace companies, the salespeople move among these same companies. Ace’s objective is to maintain an up-to-date record of prospects and contacts at existing customers.
II. Sell Product
Ace receives sales orders through four channels:
· Salespeople take orders and enter them in Ace’s ERP system.
· Customers call orders directly into Ace Customer Service, which in turn enters their orders in the ERP system.
· Customers send Purchase Orders to Ace via email, mail or fax. These orders are processed by Ace’s Customer Service.
· Customers enter sales orders directly into Ace’s systems through Ace’s Website by-passing Customer Service, which means less in-house data entry.
Sales Orders for stocked fasteners are checked for customer credit and item availability. If credit and availability exist, the orders are fulfilled according to requested delivery dates and shipping instructions.
Sales Orders for made-to-order fasteners are a bit more complicated. If the items are in stock, the process is similar to above. If the items are not in stock, credit is checked and production orders are created and sent to manufacturing.
The Purchasing Department is informed of any shortages of finished goods or raw materials.
The following business rules apply:
· Domestic orders are filled from domestic warehouses; Foreign orders are filled from foreign stock to minimize customs duty reclaim.
· Orders for certain customers are given priority.
· Orders are fulfilled from the warehouse closest to the Customer.
· Orders for out-of-stock items at one location can be fulfilled from another location.
· Orders for large quantities with sufficient manufacturing lead-time are converted into Production Orders, sent to the appropriate factory and ultimately shipped from the factory directly to the Customer.
· Ace set a minimum gross margin of 25% on sales of current product and break-even on discontinued product.
· Obsolete product is usually sold for scrap at a loss.
III. Stock Product
Ace sells two types of products:
· Standard Products
· Made-to-Order Products
Standard products are made-to-stock (MTS) items. They are carried in inventory in sufficient quantities to fill typical demand. They are manufactured as needed based on a comparison of actual and forecast demand to current inventory levels.
Made-to-Order (MTO) products are manufactured in response to specific orders. If the customer is a regular customer and regularly orders the items, they are typically manufactured in economic order quantities with the excess carried in stock. Made-to-Order products that are ordered once or irregularly are manufactured upon receipt of a purchase order according to the customer’s specifications including delivery schedules. This may involve holding some of the product in inventory for the customer.
Ace has three types of inventories:
· Raw Materials
· Finished Goods
· Supplies
Finished Goods are stocked in all three company warehouses and in some cases by the contract manufacturers. Raw Materials and Supplies are only stocked in the Southern California Warehouse and at contract manufacturers.
The inventory in Ace’s warehouses is cycle counted quarterly. The perpetual inventory is adjusted to the physical inventory based on the quarterly cycle counts. Each item is counted once annually in one of the four cycles.
The purchasing of raw materials, including subassemblies, and finished goods is handled by Purchasing based on demand and stock-on-hand.
Factories schedule their manufacturing based on orders, promise dates, stock-on-hand and inventory min/max and safety stock parameters. Factory schedules are provided to Purchasing to ensure that raw materials are available in sufficient quantities to sustain manufacturing.
IV. Distribute Product
Orders for Standard Products are sent to an Ace warehouse, where the items are Picked, Packed and Shipped. Invoices are automatically prepared based on the items and quantities shipped.
Made-to-Order Products, if they are in stock, are handled the same as standard items.
If Made-to-Order Product is not in stock, the typical situation, it is manufactured when ordered by the customer. At the completion of manufacturing, the items are transferred to inventory and subsequently picked, packed, shipped and invoiced. If the entire order is to be shipped immediately, the items may be moved directly from manufacturing to Shipping for expedited packing and shipping.
V. Procure Raw Materials, Finished Goods and Supplies
Ace issues Purchase Orders for
· Raw materials and supplies for the California factory
· Purchased finished goods, which are typically Asian manufactured fasteners
Purchase Orders for raw materials and factory supplies are handled routinely through domestic suppliers.
The Contract Manufacturers are responsible for their own procurement with one exception. Ace supplies several items used in offshore manufacturing. Ace monitors the stock on hand of these items and their replenishment.
Items manufactured offshore are typically shipped from the Orient in containers via ocean freighters. Occasionally orders are rushed by airfreight.
After a container is received, Accounts Payable receives a group of invoices to pay:
· The invoice for the items, which are covered by a Purchase Order
· Invoices for ocean freight, customs duty, broker’s fees and inland freight from the dock to Ace’s warehouse. These are not part of the original Purchase Order.
Accounts Payable processes the various invoices setting them up for payment according to applicable terms.
All items are ordered in response to manufacturing demand based on quantities on hand, min/max and safety stock amounts.
VI. Manufacturing and Distribution Exceptions
In the case of offshore manufacturing, the ERP system does not schedule, track, control or monitor offshore manufacturing. That is entirely the responsibility of the offshore manufacturer.
However, for some special items, it tracks raw materials that Ace provides to the contract manufacturers to avoid manufacturing delays resulting from insufficient raw materials.
The major Manufacturing and Distribution exceptions are the following:
· Items are purchased or manufactured when quantities on hand drop below established thresholds.
· Partial shipments can occur when available stock is insufficient to fill an order.
· Priority orders can be expedited disrupting the manufacturing schedule.
· Manufacturing errors result in re-work or scrap (in addition to the scrap that is the normal byproduct of the manufacturing process).
· Discontinued and superseded items are sold through alternate channels or scrapped.
VII. Accounting
Ace’s Accounting Department keeps track of Ace’s Assets, Liabilities, Equity, Revenue and Expenses.
Revenue is categorized by Military, Commercial and Distributor sales.
Expenses are segregated between cost of sales and non-cost-of-sales expense accounts. The non-cost-of-sales expenses are further classified as marketing and sales, research and development and administrative expenses. All of the company’s expenses fit into natural accounts within these categories.
Assets, Liabilities and Equity are accounted for using typical categories and accounts, such as Accounts Receivable, Accounts Payable, Prepaid Expenses, Long Term Assets, Common Stock, etc.
VIII. Basic Business Processes Common to Businesses
Sell Product
Stock Products
Ship Orders
Bill Customers
Order Materials
Pay Suppliers
Manufacture Product
Pay Employees
Track of Assets
Keep the Books
In: Accounting
What software features and functions are required to support Ace’s business practices described below?
Please identify at least 24, or more, functions. List these features and functions with sufficient explanationto demonstrate your understanding of the function.
Background:
Ace Aerospace Fasteners manufactures and sells fasteners, latches and related hardware to the aerospace industry. The fasteners are a combination of standard items and made-to-order items. The standard items are stocked in inventory according to pre-determined inventory levels. Made-to-Order (MTO) items are manufactured to the customers’ specifications. If the customer is a regular customer and the items are ordered on a regular basis, Ace may manufacture the items in quantities that optimize manufacturing and stock the excess.
Ace has three separate facilities. The largest facility is Ace’s Southern California main warehouse and manufacturing facility. The other two facilities are distribution centers in Kansas and Georgia near major Aerospace complexes. The Southern California facility stocks raw materials, work in process, finished goods and supplies. The Kansas and Georgia warehouses stock only finished parts purchased by customers in those geographic areas. So the Kansas distribution center, for example, stocks fasteners used by Boeing’s Wichita Assembly plant while fasteners used by Boeing’s Everett assembly plant are stocked in Southern California.
Ace has some of its fasteners manufactured and stocked in Asia by contract manufacturers. Asian fasteners are shipped to Southern California as finished goods or as raw materials that are components in more complex assemblies. Orders from foreign customers may be supplied directly from the Asian manufacturers.
Ace’s Basic Business Processes
I. Find Prospective Customers, Maintain Contact with Existing Customers
As with other industries, Ace is constantly looking for new business prospects. The good news – the aerospace industry is easily identifiable; the bad news – it is a very competitive industry especially among the subcontractors who supply the major aerospace companies.
To find potential new customers, Ace employees a group of salespeople who are responsible for finding prospective customers as well as selling to existing customers. The salespeople have both a new prospect quota and a sales quota. Their income is a combination of base and sales commission.
To identify prospects, the salespeople attend aerospace conferences and shows, including exhibiting. They subscribe to aerospace magazines. They are constantly talking to their customers regarding their subcontractors and competitors. They track their contacts from company to company as they move around the industry. With the emergence of Social Media and Social Networking, their efforts have expanded to include coverage of various social media sites such as LinkedIn, Facebook and Twitter.
The business problem is tracking all of this information. In the same way that contacts move among aerospace companies, the salespeople move among these same companies. Ace’s objective is to maintain an up-to-date record of prospects and contacts at existing customers.
II. Sell Product
Ace receives sales orders through four channels:
· Salespeople take orders and enter them in Ace’s ERP system.
· Customers call orders directly into Ace Customer Service, which in turn enters their orders in the ERP system.
· Customers send Purchase Orders to Ace via email, mail or fax. These orders are processed by Ace’s Customer Service.
· Customers enter sales orders directly into Ace’s systems through Ace’s Website by-passing Customer Service, which means less in-house data entry.
Sales Orders for stocked fasteners are checked for customer credit and item availability. If credit and availability exist, the orders are fulfilled according to requested delivery dates and shipping instructions.
Sales Orders for made-to-order fasteners are a bit more complicated. If the items are in stock, the process is similar to above. If the items are not in stock, credit is checked and production orders are created and sent to manufacturing.
The Purchasing Department is informed of any shortages of finished goods or raw materials.
The following business rules apply:
· Domestic orders are filled from domestic warehouses; Foreign orders are filled from foreign stock to minimize customs duty reclaim.
· Orders for certain customers are given priority.
· Orders are fulfilled from the warehouse closest to the Customer.
· Orders for out-of-stock items at one location can be fulfilled from another location.
· Orders for large quantities with sufficient manufacturing lead-time are converted into Production Orders, sent to the appropriate factory and ultimately shipped from the factory directly to the Customer.
· Ace set a minimum gross margin of 25% on sales of current product and break-even on discontinued product.
· Obsolete product is usually sold for scrap at a loss.
III. Stock Product
Ace sells two types of products:
· Standard Products
· Made-to-Order Products
Standard products are made-to-stock (MTS) items. They are carried in inventory in sufficient quantities to fill typical demand. They are manufactured as needed based on a comparison of actual and forecast demand to current inventory levels.
Made-to-Order (MTO) products are manufactured in response to specific orders. If the customer is a regular customer and regularly orders the items, they are typically manufactured in economic order quantities with the excess carried in stock. Made-to-Order products that are ordered once or irregularly are manufactured upon receipt of a purchase order according to the customer’s specifications including delivery schedules. This may involve holding some of the product in inventory for the customer.
Ace has three types of inventories:
· Raw Materials
· Finished Goods
· Supplies
Finished Goods are stocked in all three company warehouses and in some cases by the contract manufacturers. Raw Materials and Supplies are only stocked in the Southern California Warehouse and at contract manufacturers.
The inventory in Ace’s warehouses is cycle counted quarterly. The perpetual inventory is adjusted to the physical inventory based on the quarterly cycle counts. Each item is counted once annually in one of the four cycles.
The purchasing of raw materials, including subassemblies, and finished goods is handled by Purchasing based on demand and stock-on-hand.
Factories schedule their manufacturing based on orders, promise dates, stock-on-hand and inventory min/max and safety stock parameters. Factory schedules are provided to Purchasing to ensure that raw materials are available in sufficient quantities to sustain manufacturing.
IV. Distribute Product
Orders for Standard Products are sent to an Ace warehouse, where the items are Picked, Packed and Shipped. Invoices are automatically prepared based on the items and quantities shipped.
Made-to-Order Products, if they are in stock, are handled the same as standard items.
If Made-to-Order Product is not in stock, the typical situation, it is manufactured when ordered by the customer. At the completion of manufacturing, the items are transferred to inventory and subsequently picked, packed, shipped and invoiced. If the entire order is to be shipped immediately, the items may be moved directly from manufacturing to Shipping for expedited packing and shipping.
V. Procure Raw Materials, Finished Goods and Supplies
Ace issues Purchase Orders for
· Raw materials and supplies for the California factory
· Purchased finished goods, which are typically Asian manufactured fasteners
Purchase Orders for raw materials and factory supplies are handled routinely through domestic suppliers.
The Contract Manufacturers are responsible for their own procurement with one exception. Ace supplies several items used in offshore manufacturing. Ace monitors the stock on hand of these items and their replenishment.
Items manufactured offshore are typically shipped from the Orient in containers via ocean freighters. Occasionally orders are rushed by airfreight.
After a container is received, Accounts Payable receives a group of invoices to pay:
· The invoice for the items, which are covered by a Purchase Order
· Invoices for ocean freight, customs duty, broker’s fees and inland freight from the dock to Ace’s warehouse. These are not part of the original Purchase Order.
Accounts Payable processes the various invoices setting them up for payment according to applicable terms.
All items are ordered in response to manufacturing demand based on quantities on hand, min/max and safety stock amounts.
VI. Manufacturing and Distribution Exceptions
In the case of offshore manufacturing, the ERP system does not schedule, track, control or monitor offshore manufacturing. That is entirely the responsibility of the offshore manufacturer.
However, for some special items, it tracks raw materials that Ace provides to the contract manufacturers to avoid manufacturing delays resulting from insufficient raw materials.
The major Manufacturing and Distribution exceptions are the following:
· Items are purchased or manufactured when quantities on hand drop below established thresholds.
· Partial shipments can occur when available stock is insufficient to fill an order.
· Priority orders can be expedited disrupting the manufacturing schedule.
· Manufacturing errors result in re-work or scrap (in addition to the scrap that is the normal byproduct of the manufacturing process).
· Discontinued and superseded items are sold through alternate channels or scrapped.
VII. Accounting
Ace’s Accounting Department keeps track of Ace’s Assets, Liabilities, Equity, Revenue and Expenses.
Revenue is categorized by Military, Commercial and Distributor sales.
Expenses are segregated between cost of sales and non-cost-of-sales expense accounts. The non-cost-of-sales expenses are further classified as marketing and sales, research and development and administrative expenses. All of the company’s expenses fit into natural accounts within these categories.
Assets, Liabilities and Equity are accounted for using typical categories and accounts, such as Accounts Receivable, Accounts Payable, Prepaid Expenses, Long Term Assets, Common Stock, etc.
VIII. Basic Business Processes Common to Businesses
Sell Product
Stock Products
Ship Orders
Bill Customers
Order Materials
Pay Suppliers
Manufacture Product
Pay Employees
Track of Assets
Keep the Books
In: Accounting
QUESTION 3
You manage a farm that is looking to sell oranges in both
California and Oregon. The demand for oranges in California is
given by PCA = 25 - 0.5QCA and the
demand for oranges in Oregon is POR = 19 -
0.3QOR. The total cost of selling oranges is TC = 10 + Q
and the marginal cost is constant at MC = $1. If you cannot
differentiate between customers in California and Oregon, and you
are forced to charge the price that is optimal in California in
both Oregon and California, how much profit will you lose compared
to the profit you made in (2)? (Write answer
without the negative sign nor the
dollar sign.)
(2) You manage a farm that is looking to sell oranges in both
California and Oregon. The demand for oranges in California is
given by PCA = 25 - 0.5QCA and the
demand for oranges in Oregon is POR = 19 -
0.3QOR. The total cost of selling oranges is TC = 10 + Q
and the marginal cost is constant at MC = $1. If you can
differentiate between customers in California and Oregon, you
should charge a price of $13 in California and a price of $10 in
Oregon.
The answer is NOT 40.
BOLD the Correct Answer
In: Economics