Professional Documents
Culture Documents
Chapter 14
pp 281-299
Case Studies: “Tex Rob” pp299-303
“When NICE isn’t good enough” pp15-18
Primary Reports
Production and inventory planning and control are
part of primary reports. These reports normally
include the following:
Planned orders, a schedule indicating the
amount and timing of future orders
Order releases, authorising the execution of
planned orders
Changes to planned orders, including revisions
of due dates or order quantities and
cancellation of orders.
Secondary Reports
Performance control, planning, and exceptions
belong to secondary reports.
Performance-control reports evaluate system
operation eg. deviations, missed deliveries,
stock outs.
Planning reports forecast eg inventory
requirements.
Exception reports show discrepancies eg late
and overdue orders, scrap rates, errors.
Profitability
Operational Performance
Sales 20,000
Direct costs (8,000)
Gross Contribution 12,000
Current Assets
Debtors 35
Stock 15 Management
--------------------------+ 50
Current Liabilities
This is the Total Creditors
Assets(Fixed+ -------------------------- (40)
Current) minus
the Current TA - CL ----------- 110
Liabilities
Debt 40
Equity 70
Ownership
Funding --------------- 110
Financial Position & Financial Performance
BS
BS BS BS
FA
+CA
- CL
EBIT Measuring
Return on Net Assets =
Management
Net Assets Performance
EBIT Sales
X
Sales Net Assets
Note: This is a teaching example for operations management and should be treated with caution
Fixed Asset Utilisation :
Sales / Fixed Assets 13.47 14.38 17.16 15.00
Increase In F Assets / Sale 4% 2% 3%
Current Asset Utilisation :
Sales / Current Assets 3.63 3.58 3.47 3.49
Debtors / Sales % 10.1% 11.0% 11.8% 10.96%
Creditors/Sales % 7.3% 9.5% 9.5%
Rough Trading Efficiency
Debtors days to Pay 37 40 43 39.99
Creditors Days to Pay 38 50 50 46.06
Liquidity Ratios :
Current Assets / Current Liabilities 1.8 1.6 1.5 1.61
Liquid Assets / Current Liabilities 0.9 0.7 0.7 0.76
Working Capital / Sales % 12% 11% 9% 10.73%
Inc in Inventory / Inc in Sales % 27% 14% 20.4%
Debt/Gearing Ratios :
Total Debt / Book Value of Equity 24% 19% 14% 18.94%
Income Gearing ( Interest / EBIT ) 26.0% 32.8% 38.4% 32.39%
Corporate Ratios
Total Assets /Total Liabilities 1.83 1.70 1.59 1.71
Note: This is a teaching example for operations management and should be treated with caution
Resource Utilisation