Myrtle Air Express decided to offer direct service from Cleveland to Myrtle Beach. Management must decide between a full-price service using the company’s new fleet of jet aircraft and a discount service using smaller capacity commuter planes. It is clear that the best choice depends on the market reaction to the service Myrtle Air offers. Management developed estimates of the contribution to profit for each type of service based upon two possible levels of demand for service to Myrtle Beach: strong and weak. The following table shows the estimated quarterly profits (in thousands of dollars):
| Demand for Service | ||
| Service | Strong | Weak |
| Full price | $1440 | -$530 |
| Discount | $1050 | $480 |
| Optimistic approach | Full price service |
| Conservative approach | Discount service |
| Minimax regret approach | Discount service |
In: Operations Management
EX23-03
Budget Performance Report
Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows:
| Cost Category | Standard Cost per 100 Two-Liter Bottles |
|||||
| Direct labor | $1.16 | |||||
| Direct materials | 5.8 | |||||
| Factory overhead | 0.3 | |||||
| Total | $7.26 | |||||
At the beginning of July, GBC management planned to produce 430,000 bottles. The actual number of bottles produced for July was 464,400 bottles. The actual costs for July of the current year were as follows:
| Cost Category | Actual Cost for the Month Ended July 31 |
|||||||||
| Direct labor | $5,279 | |||||||||
| Direct materials | 26,289 | |||||||||
| Factory overhead | 1,407 | |||||||||
| Total | $32,975 | |||||||||
Enter all amounts as positive numbers.
a. Prepare the July manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for WBC, assuming planned production.
| Genie in a Bottle Company | |
| Manufacturing Cost Budget | |
| For the Month Ended March 31 | |
| Standard Cost at Planned Volume (430,000 Bottles) |
|
| Manufacturing costs: | |
| Direct labor | $ |
| Direct materials | |
| Factory overhead | |
| Total | $ |
b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your answers to two decimal places.
| Genie in a Bottle Company | |||
| Manufacturing Costs-Budget Performance Report | |||
| For the Month Ended March 31 | |||
Actual Costs |
Standard Cost at Actual Volume (464,400 Bottles) |
Cost Variance- (Favorable) Unfavorable |
|
| Manufacturing costs: | |||
| Direct labor | $ | $ | $ |
| Direct materials | |||
| Factory overhead | |||
| Total manufacturing cost | $ | $ | $ |
c. The Company's actual costs were $740.44 than budgeted. direct labor and direct material cost variances more than offset a small factory overhead cost variance.
In: Accounting
Myrtle Air Express decided to offer direct service from Cleveland to Myrtle Beach. Management must decide between a full-price service using the company’s new fleet of jet aircraft and a discount service using smaller capacity commuter planes. It is clear that the best choice depends on the market reaction to the service Myrtle Air offers. Management developed estimates of the contribution to profit for each type of service based upon two possible levels of demand for service to Myrtle Beach: strong and weak. The following table shows the estimated quarterly profits (in thousands of dollars):
| Demand for Service | ||
| Service | Strong | Weak |
| Full price | $1440 | -$530 |
| Discount | $1000 | $480 |
| Optimistic approach | |
| Conservative approach | |
| Minimax regret approach |
In: Operations Management
Myrtle Air Express decided to offer direct service from Cleveland to Myrtle Beach. Management must decide between a full-price service using the company’s new fleet of jet aircraft and a discount service using smaller capacity commuter planes. It is clear that the best choice depends on the market reaction to the service Myrtle Air offers. Management developed estimates of the contribution to profit for each type of service based upon two possible levels of demand for service to Myrtle Beach: strong and weak. The following table shows the estimated quarterly profits (in thousands of dollars):
| Demand for Service | ||
| Service | Strong | Weak |
| Full price | $1380 | -$650 |
| Discount | $1000 | $460 |
| Optimistic approach | Full price service |
| Conservative approach | Discount service |
| Minimax regret approach | Discount service |
In: Operations Management
Complete the following information about the organization and products and/or services you will focus on as you develop a complete marketing plan throughout the course. You may need to do research to get answers to the questions below. Be sure the organization and offer you select will 1) remain interesting to you for the duration of the course, and 2) have sufficient information available for you to conduct research and make informed recommendations in your marketing plan.
Company Profile
Market Segmentation and Targeting
Situation and Company Analysis
Economic Environment
Discuss factors that affect your consumers’ purchasing power and spending patterns. What is the economic environment that you are operating in? Is it growth, recovery or recession? Will it be easy to find staff? What is the current interest rate i.e. is it increasing or decreasing? What is consumer confidence like?
Technical Environment
The technological environment changes rapidly. You need to make sure that you are aware of trends in your industry and other industries could affect your business. New technologies create new markets and can influence you, consumers and competitors. Industry environment What are the trends in your industry? Are there new entrants in the market? Has a substitute product been introduced? Are there changes in industry practices or new benchmarks to use?
Competitive Environment
How many competitors do you have? Who are the key competitors? What are the key selling points or competitive advantages of each one? What is your advantage over competitors? Is the market large enough to support you and competitors?
Political Environment
Consider the political environment for the areas that your business will trade and operate in. Is there a stable political system? Are there any licenses and regulations that you should be aware of? Do you need to win support to be able to operate?
SWOT Analysis
Instruction: Complete the table below with descriptive responses and explanation as you answer the questions below.
| Strengths | Weaknesses |
|
|
| Opportunities | Threats |
|
|
Mission, Objectives, and Goals
State the mission or business purpose: what the organization wants to achieve, in market-oriented terms. (Example: Disney’s mission could be, “We create happiness by providing the finest in entertainment for people of all ages.)
List 1–3 objectives that move the organization a step closer to achieving the mission. (Example: A Disney objective could be, “To be the most popular theme park for international visitors.”)
Convert objectives into specific marketing goals that are easy to measure and evaluate. (Example: Our goal is to increase the market share of international theme park visitors by 10% in the next two years.”)
In: Operations Management
Lack of sleep puts you at higher risk for colds, first experimental study finds By Hanae ArmitageSep. 1, 2015, 11:00 AM Moms and sleep researchers alike have stressed the importance of solid shuteye for years, especially when it comes to fighting off the common cold. Their stance is a sensible one—skimping on sleep weakens the body’s natural defense system, leaving it more vulnerable to viruses. But the connection relied largely on self-reported, subjective surveys—until now. For the first time, a team of scientists reports that they have locked down the link experimentally, showing that sleep-deprived individuals are more than four times more likely to catch a cold than those who are well-rested.
“It’s very nice to see an experiment looking at sleep as an important regulator for specific antiviral immune responses,” says Michael Irwin, a psychoneuroimmunologist at University of California (UC), Los Angeles, who is not involved with the study. “In this particular case, there’s a hard clinical outcome showing [sleep deprivation] and susceptibility to the common cold.”
In a carefully controlled two-part experiment, scientists began by collecting nightly sleep data on 164 healthy individuals for 1 week. Participants were asked to record the times at which they went to bed and woke up. They also wore small watchlike devices that use a technique called wrist actigraphy to monitor movement (much like a Fitbit tracks activity) while they slept. Aric Prather, lead author of the study and a sleep researcher at UC San Francisco, says that he and his colleagues associate the wrist actigraphy data with being awake—if during a reported sleep period, the wrist band records movement, they take that as an indication of wakefulness, and subtract the time spent moving from the hours asleep.
SIGN UP FOR OUR DAILY NEWSLETTER Get more great content like this delivered right to you! Email Address * Click to view the privacy policy. Required fields are indicated by an asterisk (*)
Then came part two: the cold infections. Scientists quarantined participants in a hotel and gave them nose drops containing rhinovirus—the virus responsible for the common cold. They then closed off the hotel floor for 5 days, letting the hosts’ immune system do the rest. To ensure the most accurate results, researchers drew participants’ blood before the viral exposure to test for levels of rhinovirus antibody, a defensive agent in the immune system that recognizes and attacks rhinovirus. If they found high, preexisting levels of the protective protein, they removed the participant from the study so that prior immunity would not bias the infection rates of the group.
In order to officially register as “sick,” participants had to exhibit one “objective sign of illness” and one other immune response. Signs of illness revolved around mucus production. After viral exposure, scientists collected used tissues daily and, essentially, weighed the snot. Ten grams or more counted as a sign of illness. They also looked at congestion. The researchers dripped a harmless dye into participants’ noses and waited to see how long it took to reach the back of their throats; longer than 35 minutes tallied as a sign of illness. Valid immune response required one of two things: A mucus sample flushed from a participant’s nasal passage had to show signs of viral replication or blood work needed to show new levels of the rhinovirus-fighting antibody.
Of the 164 participants, 124 received the actual virus instead of the control, and 48 of them got sick. By checking the sleep duration of the sick participants, researchers report in the current issue of SLEEP that individuals who slept fewer than 5 hours a night were 4.5 times more likely to get sick than those who slept 7 hours or more. Those who slept 5 to 6 hours were 4.2 times more likely to get sick, but those who slept 6 to 7 hours per night were at no greater risk of catching a cold than those who slept 7 hours or more, suggesting that there’s a sleep threshold for potent immune defense.
“Sleep often takes a back seat to other health behaviors like nutrition and exercise,” Prather says. “I think this [experiment] provides some really clear evidence for those people who get less than 5 or 6 hours of sleep—there really is a clear biological cost.”
The question Is as follows:
What broad question is being addressed by the study?
• To what populations(s) does the question apply?
• Is the study experimental or observational?
• For an experimental study, what are the treatments and outcomes?
• What are the relevant variables in the study?
• What is the size of the sample in the study?
• How were the subjects in the sample selected?
• What are the parameters (means or proportions) of interest?
• What values of statistics (means or proportions) are reported?
• What are some interesting strengths or weaknesses of the study?
• What are the conclusions of the study and why?
In: Statistics and Probability
In April 1997, Bre-X Minerals, a Canadian company, was
supposedly one of the most valuable
companies in the world. Bre-X had convinced numerous mining experts
that they had rights to one of
the largest gold deposits ever discovered. It was hailed as the
mining find of the century. The
gold mine, located on a remote island in the East Kalimantan
Province of Indonesia, supposedly had
so much gold that the actual price of gold on the open market
dropped significantly due to the
anticipation of an increased gold supply. Within a few months,
thousands of Canadians—big-time
investors, pension and mutual fund, managers and many small
investors, including factory
workers—got caught up in “Bre-X fever.” The company’s stock price
shot from pennies to more than
$250 per share before a 10-for-1 stock split was announced.
Thousands of investors believed they
were on the verge of becoming millionaires.
The story took a sudden turn for the worse when Michael de Guzman,
Bre-X’s chief geologist and one
of only a handful of company insiders entrusted with the mine’s
core samples, apparently committed
suicide by jumping out the back of a helicopter. Guzman’s suicide
was reported around the time that
an independent consulting firm reported that samples from the
mine had been tampered with. The firm concluded that the core
samples were made to appear to be
rich in gold by adding a relatively small amount of gold to the
samples. In essence, the firm
concluded that Bre-X was a scam of epic proportions!
As the scam came to light, it was unclear who was behind the
tampering. While fingers were pointed
at senior Bre-X personnel, others blamed geologists in the field.
Bre-X’s President, David Walsh,
was shocked at the news of the tampering and vowed to conduct an
investigation. As is the case with
many frauds of this type, numerous class-action lawsuits were filed
against Walsh and other Bre-X
executives, alleging that they misled shareholders. Walsh and other
company officials received
profits of over $50 million from selling some of their Bre-X stock
the year before the tampering
came to light. In the end, many people lost money as the gold find
of the century turned out to be
a massive hoax.
You’re a fraud examiner working for the law firm Knight, Enshine, Ing & Armour representing investors in a class-action lawsuit against Bre-X and others including the CPA firm Knotluk, Eisschut & Ahsleap that performed the annual financial audits for BreX. The law partner handling the lawsuit wants your opinion, as an anti-fraud professional, about this case. She’s concerned that the defense will want to “blame the victim” saying that investments are always a risk and there are no guaranteed returns. She wants to make the case that investors were duped by BreX either by intentional design or utter irresponsibility.
Your task is to prepare a memo outlining:
1) the key actions that could have been taken, by any party (including the Canadian government), to prevent or detect the alleged Bre-X fraud,
2) why should have those actions been taken (how could that have prevented or detected fraud)
3) who should have been responsible for taking these actions.
You should be fair and honest in your assessment. In addition to the information you have from the law firm (pg. 376 in the textbook),
a recent Canadian government report provides the following information: • A number of senior Bre-X officials had been investigated previously by U.S. law enforcement and Interpol for a variety of questionable business dealings. • The geologists hired by Bre-X worked for firms with close ties to a former Indonesian government official with ties to organized crime. • The Canadian Stock Exchange listed Bre-X after waiving certain requirements and standards. Canadian securities regulators had not reviewed this because of a case backlog. • Bre-X had refused to share any laboratory, geological, metallurgical or other reports with anyone except for the ones performed on the samples held by Guzman. • Bre-X had not entered into any long-term contracts with mining firms. • This was one in a series of mining scandals in Canada during the past 30 years. • Knotluk, Eisschut & Ahsleap only sent two staffers to Indonesia during the financial audit. Due to the location of the mine, they did make a site visit. Instead, they performed the audit at their hotel. Bre-X provided documentation to them at the hotel and arranged for staff interviews via SKYPE. Neither auditor had any experience in the mining industry, with international projects, did not understand of speak Indonesian (some documents were in Indonesian and English was not the first language for some employees) and had no training in fraud examination. Note: Keep in mind the Fraud Exposure Rectangle on pg.361 and the Fraud Triangle. (I know, fraud examiners love describing things in shapes!)
In: Accounting
In: Operations Management
Building the Supply and Demand Model Homework
A change in quantity demanded refers to a movement along the demand curve, which is caused only by a chance in price. A change in demand means that the entire demand curve shifts either left or right.
A change in quantity supplied will imply a movement along the supply curve, while a change in supply refers to a shift in the supply curve. A change in quantity supplied is usually caused by a change in the unit price while a change in supply is caused by new methods of production.
3.
|
Broccoli Soup (per month) |
||||
|
Price |
Kwame |
Maria |
Elsa |
Market Demand |
|
$2 |
4 |
18 |
22 |
|
|
4 |
3 |
14 |
21 |
|
|
6 |
0 |
11 |
20 |
|
|
8 |
0 |
5 |
15 |
|
|
10 |
0 |
2 |
7 |
|
|
12 |
0 |
1 |
4 |
|
|
14 |
0 |
0 |
2 |
|
|
16 |
0 |
0 |
1 |
|
A. Using the individual demand data in the table above, determine the market demand for broccoli soup – fill in the market demand column of the table.
B. Graph the market demand curve.
C. The broccoli growers industry group launches a successful national marketing campaign highlighting the positive health effects of broccoli consumption. What will likely happen to the market demand for broccoli? Demonstrate your answer in the graph you drew for B.
4. Give 3 real world scenarios that would likely increase the demand for chickpeas.
5. Give 3 real work scenarios that would likely decrease the supply of Atlantic salmon.
6. Draw hypothetical supply and demand curves for coffee. Show how the equilibrium price and quantity will be affected by the following events. Use a separate graph to demonstrate each event. Show the equilibrium price and quantity before, and after, the event.
A. The New England Journal of Medicine publishes an article highlighting a direct correlation between coffee consumption and liver cancer.
B. The coffee growing regions of South and Central America experience optimal coffee growing weather.
C. A regional war breaks out in the coffee growing countries of East Africa.
D. Widespread media reports highlight major labor abuses in coffee growing regions around the world, including child labor, slave labor, and the widespread sexual assault of coffee plantation workers.
7. President Trump signs a law that imposes a 30% tax on oil exports from the United States.
A. Demonstrate the likely effect on the domestic oil market using supply and demand curves.
B. What we will be the likely effect on oil prices in the US?
8. Assume the individual demand and supply below represent the entire market. Answer the questions based on the following tables.
|
Tasting Menus Michelin Star Restaurants, Chicago (Demand Schedule - per month) |
||||
|
Price |
Omar |
Shelia |
Aliyah |
Market Demand |
|
100 |
9 |
14 |
23 |
|
|
150 |
5 |
10 |
18 |
|
|
200 |
4 |
8 |
16 |
|
|
250 |
0 |
3 |
10 |
|
|
Tasting Menus Michelin Star Restaurants, Chicago (Supply Schedule - per month) |
||||
|
Price |
Grace |
Alinea |
Acadia |
Market Supply |
|
100 |
0 |
2 |
9 |
|
|
150 |
4 |
4 |
10 |
|
|
200 |
7 |
10 |
11 |
|
|
250 |
13 |
15 |
24 |
|
A. Draw the market demand and market supply curves.
B. Label the market equilibrium price and quantity.
C. What is the excess quantity supplied at a price of $250?
D. What is the excess quantity demanded at a price of $150?
9. Explain the likely affect of the following events on the market equilibrium price and quantity:
A. Global soybean market: An infestation of the Helicoverpa armigera worm in Brazil’s soybean growing regions. Brazil is the world’s largest producer of soybeans.
B. Global toy market: A 105% increase in the minimum wage in China. China is the world’s largest manufacturer of toys.
C. Global pineapple market: Both PepsiCo and the Coca Cola company develop blockbuster pineapple flavored sodas.
D. US energy drink market: Congress imposes a 25% excise tax on energy drinks due to the adverse health effects of excessive caffeine consumption. The excise tax will be paid by the manufacturers of the drinks.
E. Local Sinha Stout (popular Sri Lankan beer) market in Poughkeepsie: Four thousand Sri Lankan immigrants settle in the city of Poughkeepsie.
F. Horn rimmed glasses local market Hyde Park: Hyde Park becomes a popular location for weekend homes for Brooklyn hipsters.
G. Fuji apple market: The price of red delicious apples increases by 67%.
H. Chef’s knife market: The demand for culinary education increases dramatically.
J. Kiwi market: Kiwi sellers raise the price of kiwis by 29%. There are no other changes in the market.
K. Wheat market: A new technology significantly increases planting productivity.
In: Economics
Complete the following information about the organization and products and/or services you will focus on as you develop a complete marketing plan throughout the course. You may need to do research to get answers to the questions below. Be sure the organization and offer you select will 1) remain interesting to you for the duration of the course, and 2) have sufficient information available for you to conduct research and make informed recommendations in your marketing plan.
Company Profile
Market Segmentation and Targeting
Situation and Company Analysis
Economic Environment
Discuss factors that affect your consumers’ purchasing power and spending patterns. What is the economic environment that you are operating in? Is it growth, recovery or recession? Will it be easy to find staff? What is the current interest rate i.e. is it increasing or decreasing? What is consumer confidence like?
Technical Environment
The technological environment changes rapidly. You need to make sure that you are aware of trends in your industry and other industries could affect your business. New technologies create new markets and can influence you, consumers and competitors. Industry environment What are the trends in your industry? Are there new entrants in the market? Has a substitute product been introduced? Are there changes in industry practices or new benchmarks to use?
Competitive Environment
How many competitors do you have? Who are the key competitors? What are the key selling points or competitive advantages of each one? What is your advantage over competitors? Is the market large enough to support you and competitors?
Political Environment
Consider the political environment for the areas that your business will trade and operate in. Is there a stable political system? Are there any licenses and regulations that you should be aware of? Do you need to win support to be able to operate?
SWOT Analysis
Instruction: Complete the table below with descriptive responses and explanation as you answer the questions below.
| Strengths | Weaknesses |
|
|
| Opportunities | Threats |
|
|
Mission, Objectives, and Goals
State the mission or business purpose: what the organization wants to achieve, in market-oriented terms. (Example: Disney’s mission could be, “We create happiness by providing the finest in entertainment for people of all ages.)
List 1–3 objectives that move the organization a step closer to achieving the mission. (Example: A Disney objective could be, “To be the most popular theme park for international visitors.”)
Convert objectives into specific marketing goals that are easy to measure and evaluate. (Example: Our goal is to increase the market share of international theme park visitors by 10% in the next two years.”)
In: Operations Management