Assignment

Pietro Yon, a local businessman, owns and manages a number of retail stores that sell a range of homewares.
Pietro is a member of the local business Chamber of Commerce and has been asked to chair a committee to research and study the success of Samsung PLC. The Chamber believes that there may be some useful learning from this study which members of the Chamber could use. You have been asked to provide specialist support to the committee and you are required to produce a range of materials for members of the committee to use.

Task 1 Financial Data and Strategic Decision Making

You must produce a presentation for Pietro Yon to use at the next meeting of the Chamber of Commerce. The presentation should be based on your research of Samsung PLC and other relevant information. It must be accompanied by supporting notes.
Your presentation must include the following:

• An evaluation of the sources of financial data which can be used to inform business strategy. (1.1)
• An assessment of the need for financial data and information in relation to the formulation of business strategy. (1.2)
• An analysis of the risks related to financial business decisions. (1.3)
• A review of methods that can be used for appraising strategic capital expenditure projects and strategic direction. (3.1)

Task 2 Discussion Paper

A meeting has been arranged with Pietro Yon and other members of the committee and you have been asked to produce a paper for discussion which provides:

• An interpretation of the financial statements of Samsung PLC to assess the current viability of the organisation. (2.1)
• A comparative analysis of financial data using ratio analysis for Samsung PLC. You are advised to download consecutive year’s accounts from the Samsung PLC website. (2.2)

Task 3 Information Leaflet

Produce an information leaflet for the Chamber of Commerce to distribute to the members. The leaflet should assess the following:

• The impact of ‘creative accounting’ techniques when making strategic decisions. (1M1)
• The limitations of ratio analysis as a tool for strategic decision making. (2M2)
• The importance of cash flow management when evaluating proposals for capital expenditure. (3M1)

Task 4 Capital Expenditure Appraisal

Pietro Yon has been supplied with information from a component manufacturer who has asked for advice on the best project to accept for the purchase/replacement of a piece of machinery.
The company are considering selling their old machine that has a capital cost of £260 000 and replacing it with an up to date model costing £220 000. For immediate purchase, the company will receive £120 000-part exchange allowance.
Both the current and new machines are able to meet the expected company demand, estimated at:
Year              Units
1 90              000
2 50              000
3 30              000
After three years, it is predicted that demand will be zero due to the technological developments in the industry.
The following data has been provided for the existing and new machine:

Additional information

1. The selling price for each component is £5.00 and this will remain constant for the next three years.
2. The company expect the cost of direct materials and direct labour to increase by 5% each year.
3. The company predicts that repair and maintenance costs for the current machine will be £7000 per annum.
4. The current machine is expected to have a zero residual value at the end of year 3.
5. The company predicts that repair and maintenance costs for the new machine will be £1000 per annum.
6. The new machine is expected to have a £75 000 residual value at the end of year 3.

The company’s cost of capital is 15%
Extract from the present value table for £1 at 15%
Year            Units
1                 0.870
2                 0.756
3                 0.658
4                 0.572
Pietro would like you to produce a business report that can be given to the company offering advice on the best course of action for the purchase/replacement machine.

REQUIRED

Prepare a report that evaluates the capital expenditure proposals using appropriate financial techniques.

You have just graduated, and you are just about to launch the business of your dreams for manufacturing a product of your own choice.
Your goal in this assignment is to describe in detail the steps that need to be carried out for setting up the production of this product, applying Operations Management (OM) principles. In particular, you will have to cover the following steps (the corresponding sections in your report are also listed):
Introduction: Market scope and detailing of the demand profile for the first year of operation
Manufacturing Setup: Description of the processes that will have to be set up for manufacturing your product (for instance, turning, milling, drilling, painting, assembly, packaging or grading and site preparation, foundation construction, framing, installation of windows and doors, roofing, … for buildings, etc.)

Supply Chain Network Configuration: Identification of raw materials and parts, their quantities and order quantities, the delivery schedule as well as a selection of the corresponding suppliers
Production Optimisation: Optimisation of production processes and supply chain, utilizing, for instance, principles related to Assembly Line Balancing, Little’s Law, OEE, Queuing Theory or to any other OM approaches
Model and Validation: Development, test, and validation of your production model utilizing the AnyLogic Discrete Event Simulation Platform; your model should include cost and time parameters
Conclusions: Summary of your idea and conclusions
The report should not exceed 10 pages overall. You are free to choose any product and processes you wish. The product, however, should be, if possible, new and innovative. It should, in other words, have a place in the market. Although the associated information would, for the most part, be imaginary, the overall model should be as realistic as possible. You may also select a product that is closer to your engineering background. It may be a new mechanical device, a novel software product, an innovative electronic device, a set of new buildings, etc.