Chapter 12: Problem 5
What is reengineering?
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Key Concepts
These are the key concepts you need to understand to accurately answer the question.
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Chapter 12: Problem 5
What is reengineering?
These are the key concepts you need to understand to accurately answer the question.
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What are four key perspectives in the balanced scorecard?
Following is a random-order listing of perspectives, strategic objectives, and performance measures for the balanced scorecard. $$\begin{array}{ll} \text { Perspectives } & \text { Performance Measures } \\ \hline \text { Internal business process } & \text { Percentage of defective- product units } \\ \text { Customer } & \text { Return on assets } \\ \text { Learning and growth } & \text { Number of patents } \\ \text { Financial } & \text { Employee turnover rate } \\ \text { Strategic 0bjectives } & \text { Net income } \\ \hline \text { Acquire new customers } & \text { Customer profitability } \\ \text { Increase shareholder value } & \text { Percentage of processes with real-time feedback } \\ \text { Retain customers } & \text { Return on sales } \\ \text { Improve manufacturing quality } & \text { Average job-related training-hours per employee } \\ \text { Develop profitable customers } & \text { Return on equity } \\ \text { Increase proprietary products } & \text { Percentage of on-time deliveries by suppliers } \\ \text { Increase information-system capabilities } & \text { Product cost per unit } \\ \text { Enhance employee skills } & \text { Profit per salesperson } \\ \text { 0n-time delivery by suppliers } & \text { Percentage of error-free invoices } \\ \text { Increase profit generated by each salesperson } & \text { Customer cost per unit } \\ \text { Introduce new products } & \text { Earnings per share } \\ \text { Minimize invoice-error rate } & \text { Number of new customers } \\ & \text { Percentage of customers retained } \end{array}$$ For each perspective, select those strategic objectives from the list that best relate to it. For each strategic objective, select the most appropriate performance measure(s) from the list
Stanmore Corporation makes a special-purpose machine, D4H, used in the textile industry. Stanmore has designed the D4H machine for 2017 to be distinct from its competitors. It has been generally regarded as a superior machine. Stanmore presents the following data for 2016 and 2017 $$\begin{array}{lrr} & 2016 & 2017 \\ \hline \text { 1. Units of D4H produced and sold } & 200 & 210 \\ \text { 2. Selling price } & \$ 40,000 & \$ 42,000 \\ \text { 3. Direct materials (kilograms) } & 300,000 & 310,000 \\ \text { 4. Direct material cost per kilogram } & \$ 8 & \$ 8.50 \\ \text { 5. Manufacturing capacity in units of D4H } & 250 & 250 \\ \text { 6. Total conversion costs } & \$ 2,000,000 & \$ 2,025,000 \\ \text { 7. Conversion cost per unit of capacity (row 6 \div row 5) } & \$ 8,000 & \$ 8,100 \\ \text { 8. Selling and customer-service capacity } & 100 \text { customers } & 95 \text { customers } \\ \text { 9. Total selling and customer-service costs } & \$ 1,000,000 & \$ 940,500 \\ \text { 10. Selling and customer-service capacity cost per customer } & \$ 10,000 & \$ 9,900 \\ \text { (row 9 \div row 8) } & & \end{array}$$ Stanmore produces no defective machines, but it wants to reduce direct materials usage per D4H machine in \(2017 .\) Conversion costs in each year depend on production capacity defined in terms of D4H units that can be produced, not the actual units produced. Selling and customer-service costs depend on the number of customers that Stanmore can support, not the actual number of customers it serves. Stanmore has 75 customers in 2016 and 80 customers in 2017 1\. Is Stanmore's strategy one of product differentiation or cost leadership? Explain briefly. 2\. Describe briefly key measures that you would include in Stanmore's balanced scorecard and the reasons for doing so.
What is a customer preference map, and why is it useful?
Canarsie Corporation uses a balanced scorecard to evaluate its digital camera manufacturing operation. Which of the following statements with respect to balanced scorecards is/are correct? I. \(A\) balanced scorecard reports management information regarding organizational performance in achieving goals classified by critical success factors to demonstrate that no single dimension of organizational performance can be relied upon to evaluate success. II. Performance measures used in a balanced scorecard tend to be divided into financial, customer, internal business process, and learning and growth. III. In a balanced scorecard, internal business processes are what the company does in its attempts to satisfy customers. 1\. I and II only are correct. 2\. Il and III only are correct. 3\. III only is correct. 4\. \(I, I I,\) and III are correct
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