Love it or hate it, IKEA is the most successful furniture retailer ever. With 276 stores in 36 countries, they have managed to develop their own special way of selling furniture. Their stores’ layout means customers often spend two hours in a store – far longer than in rival furniture retailers. IKEA’s philosophy goes back to the original business, started in the 1950s in Sweden by Ingwar Kamprad. He built a showroom on the outskirts of Stockholm where land was cheap and simply displayed suppliers’ furniture as it would be in a domestic setting. Increasing sales soon allowed IKEA to start ordering its own self-designed products from local manufacturers. But it was innovation in its operations that dramatically reduced its selling costs. These included the idea of selling furniture as self-assembly flat packs, which reduced production and transport costs, and its ‘showroom-warehouse’ concept, which required customers to pick the furniture up themselves from the warehouse (which reduced retailing costs). Both of these operating principles are still the basis of IKEA’s retail operations process today. Stores are designed to facilitate the smooth flow of customers, from parking, moving through the store itself, to ordering and picking up goods. At the entrance to each store large notice boards provide advice to shoppers. For young children , there is a supervised play area for a time. Parents are recalled via the loudspeaker system if the child has any problems. IKEA ‘allow customers to make up their minds in their own time’ but ‘information point’ have staff who can help. All furniture carries a ticket with code number which indicates its location in the warehouse. (For larger items customers go to the information desks for assistance.) There is also an area where smaller items are displayed, and can be picked directly. Customers then pay at the checkouts, where a ramped conveyor belt moves purchases to the checkout staff. The exit area has service points, and a loading area that allows customers to bring their cars from the car park and load their purchases. Behind the public face of IKEA’s huge stores is a complex worldwide network of suppliers. 1 300 direct suppliers, about 10 000 sub-suppliers, and wholesale and transport operations, including 26 distribution centres. This supply network is vitally important to IKEA. From purchasing raw materials, right through to finished products arriving in its customers’ homes, IKEA relies on close partnership with its suppliers to achieve both ongoing supply efficiency and new product development . However, IKEA closely controls all supply and development activities from IKEA’s hometown of Älmhult in Sweden. But success brings its own problems and some customers became increasingly frustrated with overcrowding and long waiting times. In response IKEA launched a programme ‘designing out’ the bottlenecks. The changes included:

 clearly marked in-store short cuts allowing those customers who just want to visit one area to avoid having to go through all the preceding areas;

 express checkout tills for customers with a bag only rather than a trolley;

 extra ‘help staff’ at key points to help customers;

 redesign of the car parks, making it easier to navigate;

 dropping the ban on taking trolleys out to the car parks for laoding (originallly implemented to stop vehicles being damaged);

 a new warehouse system to stop popular product lines running out during the day;

 more children’s play area.

IKEA spokewoman Nicki Craddock said: ‘We know people love our products but hate our shopping experience. We are being told that by customers every day, so we can’t afford not to make changes. We realised a lot of people taook offence at being herded like sheep on a long route around stores. Now if you know what you are looking for and just want to get in, grab it and get out, you can.’

REQUIRED: Using appropriate academic sources and supporting evidence from the case study above:

1.1 Identify and define any FOUR (4) strategic operations management decision areas that IKEA has relied on to innovate its operations. State the objective of each of the four decision areas identified, and for each decision area identified providetwo examples of activities used by IKEA to achieve the objective. (20)

Love it or hate it, IKEA is the most successful furniture retailer ever. With 276 stores in 36 countries, they have managed to develop their own special way of selling furniture. Their stores’ layout means customers often spend two hours in a store – far longer than in rival furniture retailers. IKEA’s philosophy goes back to the original business, started in the 1950s in Sweden by Ingwar Kamprad. He built a showroom on the outskirts of Stockholm where land was cheap and simply displayed suppliers’ furniture as it would be in a domestic setting. Increasing sales soon allowed IKEA to start ordering its own self-designed products from local manufacturers. But it was innovation in its operations that dramatically reduced its selling costs. These included the idea of selling furniture as self-assembly flat packs, which reduced production and transport costs, and its ‘showroom-warehouse’ concept, which required customers to pick the furniture up themselves from the warehouse (which reduced retailing costs). Both of these operating principles are still the basis of IKEA’s retail operations process today.

Stores are designed to facilitate the smooth flow of customers, from parking, moving through the store itself, to ordering and picking up goods. At the entrance to each store large notice boards provide advice to shoppers. For young children , there is a supervised play area for a time. Parents are recalled via the loudspeaker system if the child has any problems. IKEA ‘allow customers to make up their minds in their own time’ but ‘information point’ have staff who can help. All furniture carries a ticket with code number which indicates its location in the warehouse. (For larger items customers go to the information desks for assistance.) There is also an area where smaller items are displayed, and can be picked directly. Customers then pay at the checkouts, where a ramped conveyor belt moves purchases to the checkout staff. The exit area has service points, and a loading area that allows customers to bring their cars from the car park and load their purchases.

Behind the public face of IKEA’s huge stores is a complex worldwide network of suppliers. 1 300 direct suppliers, about 10 000 sub-suppliers, and wholesale and transport operations, including 26 distribution centres. This supply network is vitally important to IKEA. From purchasing raw materials, right through to finished products arriving in its customers’ homes, IKEA relies on close partnership with its suppliers to achieve both ongoing supply efficiency and new product development . However, IKEA closely controls all supply and development activities from IKEA’s hometown of Älmhult in Sweden.

But success brings its own problems and some customers became increasingly frustrated with overcrowding and long waiting times. In response IKEA launched a programme ‘designing out’ the bottlenecks. The changes included:

clearly-marked in-store short cuts allowing those customers who just want to visit one area to avoid having to go through all the preceding areas;

• express checkout tills for customers with a bag only rather than a trolley;

• extra ‘help staff’ at key points to help customers;

• redesign of the car parks, making it easier to navigate;

• dropping the ban on taking trolleys out to the car parks for laoding (originallly implemented to stop vehicles being

  damaged);

• a new warehouse system to stop popular product lines running out during the day;

• more children’s play area.   

IKEA spokeswoman Nicki Craddock said: ‘We know people love our products but hate our shopping experience. We are being told that by customers every day, so we can’t afford not to make changes. We realised a lot of people taook offence at being herded like sheep on a long route around stores. Now if you know what you are looking for and just want to get in, grab it and get out, you can.’

REQUIRED:

Using appropriate academic sources and supporting evidence from the case study above:

1. Identify and define any FOUR (4) strategic operations management decision areas that IKEA has relied on to innovate its operations. State the objective of each of the four decision areas identified, and for each decision area identified provide two examples of activities used by IKEA to achieve the objective.

QUESTION 1

1. In accordance with the IASB Conceptual Framework, which of the following is consistent with the definition of expenses?

   		Decreases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to distributions to holders of equity claims.
   		Decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to control of equity claims.
   		Decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to distributions to holders of equity claims.
   		All of the given answers are correct.

2 points   

QUESTION 2

1. For Australian corporate entities, which of the following is usually deemed to be the date on which the financial statements are authorised for issue?

   		The date of preparation of financial statements
   		The balance sheet date
   		The date the Directors' Declaration is signed
   		The date of the auditors' report

2 points   

QUESTION 3

1. Changes in accounting estimates include:

   		changes in expected warranty costs on goods sold under guarantee
   		changes in the expected pattern of consumption of economic benefits of depreciable assets
   		changes in the provision for inventory obsolescence
   		All of the given answers are correct.

2 points   

QUESTION 4

1. With regard to related parties and other organisations within a group (economic entity), __________ means the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

   		control
   		significant influence
   		authority and responsibility
   		disclosure requirement

2 points   

QUESTION 5

1. Patents, goodwill, brand names and trademarks are examples of __________.

   		tangible assets
   		intangible assets
   		current assets
   		agricultural assets

2 points   

QUESTION 6

1. According to paragraph 79 of AASB 101, an entity shall disclose the following, either in the statement of financial position or the statement of changes in equity, or in the notes for each class of share capital, except for:

   		the number of shares authorised
   		the number of shares issued and fully paid, and issued but not fully paid
   		par value per share, or that the shares have no par value
   		shares in the entity held by the entity or its competitors

2 points   

QUESTION 7

1. Companies have argued that the recognition of a profit or loss on the translation of _________________ monetary items at the end of each reporting period is inappropriate, since the exchange rate constantly fluctuates and there is significant doubt about whether the unrealised profit or loss will ever be realised.

   		non-current
   		current
   		long-term
   		None of the given answers are correct.

2 points   

QUESTION 8

1. The price that would be received to sell an asset or paid to transfer a liability in an orderly sale between market participants at the measurement date is termed ________.

   		tangible value
   		intangible value
   		book value
   		fair value

2 points   

QUESTION 9

1. Which of the following standards is referred to in relation to the disclosure of interest in other entities (in relation to subsidiaries and other entities)?

   		AASB 10
   		AASB 3
   		AASB 12
   		None of the given answers are correct

2 points   

QUESTION 10

1. The amount of tax assessed by the ATO based on the entity's operations for the period will be reflected in which account?

   		Income tax expense
   		Deferred tax asset
   		Deferred tax liability
   		Income tax payable

How the English language has evolved like a living creature

Some linguists think of language as a living thing: It grows and changes, and every time a child learns it, the language reproduces itself. Now, a team of researchers is using the analogy of evolution to explain language change, arguing that key factors in biological evolution—like natural selection and genetic drift—have parallels in how languages change over time. And it turns out that the random changes, known as “drift” in biology, may have played an outsized role in the evolution of the English language.

Historians of English have long acknowledged that social and cognitive factors shape language over time. For example, languages lose irregular verb conjugations or other word forms that are hard to remember. And certain words or pronunciations get used because they are associated with people who have status and power—think about how new arrivals adopt the local accent in order to fit in. These pressures on language are based on concrete factors, similar to the biological pressures of natural selection.

But that explanation didn’t satisfy University of Pennsylvania (UPenn) evolutionary biologist Joshua Plotkin. He was puzzled by oddities such as a growing preference for the word “clarity” over its synonym “clearness.” According to standard linguistic theory, “clearness” should be more common because adding “-ness” is an easy-to-remember rule for making a noun out of an adjective. But that’s not what happened in English. “As an outsider,” Plotkin says, “this increase seemed at odds with the notion that language … regularize[s] over time.” So he decided to roll up his sleeves and apply some theories from evolutionary biology.

With another evolutionary biologist and two linguists from UPenn, he analyzed three databases of historical English together containing more than 400 million words and ranging from 1100 C.E. to the 21st century. The researchers used statistical methods from population genetics to analyze three well-known changes in the English language: how past-tense verbs in American English have taken the “-ed” ending, (as when “spilt” became “spilled”), how the word “do” became an auxiliary verb in Early Modern English (as in “Did you sing?”), and how negative sentences were made in Old to Early Modern English.

They found that selection was the likely cause of how negative sentence structures changed over time (like how the Old English “Ic ne secge” became the Early Modern English “I say not”). But the two other changes were likely the results of random drift, they write today in a letter published in Nature. That’s because, rather than having an even rate of change, the frequencies of alternative forms changed in fits and starts—jagged fluctuations that were obvious in the data set. When it came to the verbs, they found that drift’s influence was stronger when the verb was less frequent. Only six past tense changes in their data set, such as “lighted” to “lit,” were deemed to have changed for purposeful reasons, such as being easier to learn and use.

Explain how the English language evolved

Note: This problem is for the 2018 tax year.

Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, while Wanda is employed part-time as a paralegal for a law firm.

During 2018, the Deans had the following receipts:

Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child support—the alimony payments were to terminate if Wanda remarried.

In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. As the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained.

The Deans had the following expenditures for 2018:

The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution.

The Deans' household includes the following, for whom they provide more than half of the support:

Penny graduated from high school on May 9, 2018, and is undecided about college. During 2018, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on January 20, 2018. For the past few years, Wayne qualified as a dependent of the Deans.

Federal income tax withheld is $4,200 (Lance) and $2,100 (Wanda). The proper amount of Social Security and Medicare tax was withheld.

Required:

Determine the Federal income tax for 2018 for the Deans on a joint return by providing the following information that would appear on Form 1040 and Schedule A. They do not want to contribute to the Presidential Election Campaign Fund. All members of the family had health care coverage for all of 2018. If an overpayment results, it is to be refunded to them.

Make realistic assumptions about any missing data.

Enter all amounts as positive numbers.

If an amount box does not require an entry or the answer is zero, enter "0".

When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.

NOTE: See tax schedules at these two links: http://i67.tinypic.com/k00hog.jpg and http://i66.tinypic.com/23wur9t.jpg

Provide the following that would be reported on Lance and Wanda Dean's Form 1040.

a. Filing status and dependents: The taxpayers' filing status:
Married filing jointly

Qualifies as the taxpayers' dependent: Select "Yes" or "No".
Penny:  Yes
Kyle: Yes

b. Calculate taxable gross income.
$

c. Calculate the total adjustments for AGI.
$

d. Calculate adjusted gross income.
$

e. Calculate the greater of the standard deduction or itemized deductions.
$

f. Calculate total taxable income.
$

g. Calculate the income tax liability.
$

h. Calculate the total tax credits available.
$

i.  Calculate total withholding and tax payments.
$

j. Calculate the amount overpaid (refund):
$

k. Calculate the amount of taxes owed:

Provide the following that would be reported on Lance and Wanda Dean's Schedule A.

l. Calculate the deduction allowed for medical expenses.
$

m. Calculate the deduction for taxes.
$

n. Calculate the deduction for interest.
$

o. Calculate the charitable contribution deduction allowed.
$

p. Calculate total itemized deductions.

In an open economy, why is the supply curve in the foreign-currency exchange market vertical?

• Net capital outflow is determined by real GDP, not the real exchange rate.
• Net capital outflow is extremely sensitive to small changes in the real exchange rate.
• Net capital outflow is determined by the real interest rate, not the real exchange rate.
• Net capital outflow equals net exports.

a. Use the information to sketch the income consumption curve on a graph.

b. Draw the Engel curves for hot dogs and hamburgers.

Income HotDogs Hamburgers

$10 3 7

15 6 9

20 10 10

c. What is the income elasticity of hot dogs for this consumer as income increases from $10 to $15? (calculate using percentage changes of income and quantity demanded).

Suppose that a government passed a new law that requires firms to comply with strict regulations. This law discourages investment in the country. At the same time, government surplus increases sustainability because of effective policies. In a single well labeled graph , show the consequences of above information on the market for loanable funds. Be sure to specify changes in the equilibrium interest rate and equilibrium quantity of loanable funds.

Describe Ford’s VMC in detail. What does a more traditional VMC look like and why did Ford have to make changes to the traditional VMC strategy for their campaign? Will this type of campaign work for Ford’s other consumer segments and other car models? Please be specific as to why this may or may not work and what Ford models might be attractive for this type of VMC campaign.