Required: Prepare a strategy map to show the relationships between each of the performance measures in learning-and-growth, internal process, customer and financial. Use arrows to show that ‘if this...

Required:

1. 
   Prepare a strategy map to show the relationships between each of the performance measures in learning-and-growth, internal process, customer and financial.  Use arrows to show that ‘if this
   measures
   is achieved then we can expect this to improve.’  For example, an arrow between hours of employee training and employee productivity indicates that increases in employee training will lead to improved employee productivity.
   


2. 
   Evaluate each of the two managers using the following scale:
   

Reassign: Sufficient improvement unlikely		Very poor: considerably below expectation		Poor: somewhat below expectations		Good: somewhat above expectations		Very good: considerably above expectations		Excellent: Far beyond expectations, manager excels
0	1	2	3	4	5	6	7	8	9	10

1. 
   You have a bonus pool of $100,000.  Determine the amount of bonus that you would give to each of the two managers.
   


2. 
   Prepare a report to the remuneration committee to justify your bonus allocations.
   


3. 
   Consider how the additional measures in the environmental perspective could be integrated into the strategy map.
   

BACC216 Management Accounting 2 Semester 2, 2017 Supplementary Assignment 2 – Case Study Plastico – Group/Individual Submission Due: 11.55 pm, Sunday, 17 December 2017 Maximum of two students per group Plastico Pty Ltd produces an innovative type of plastic that is replacing steel in the production of cars. The industry is very competitive, but Plastico has a very successful strategy focused on capturing market share by providing a high-quality product while carefully managing costs. The production process involves thousands of variables that must be monitored and adjusted to determine the energy requirements and yield (output compared with input). Highly trained and experienced engineers are the key to ensuring that the process is efficient and that improvements are continually identified. In summary, Plastico’s strategy is to invest in training and workplace conditions to improve the engineers’ innovation and process management skills. Improvements from employee suggestions increase product quality and process efficiency, so market share then increases while production costs decrease. Increasing market share and decreasing production costs lead to higher profit margins and return on equity. The CEO has also made a commitment to managing Plastico’s environmental impact. As the management accountant you will evaluate the performance of a pair of managers based on measures presented in the balanced scorecard format. In order to compare the performance of the two managers you will first construct a strategy map that shows the causal links between performance measures. You can then evaluate the manager’s performance and determine their share of the bonus pool. The performance measures used at Plastico are: Measures for Plastico Definition for Plastico Financial perspective 1. Return on investment Net profit after tax divided by total assets 2. Net profit margin Net income/Net sales 3. Reduction in production costs Percentage reduction in production costs Customer perspective 1. Customer retention The product’s score on an aggregate measure of quality 2. Customer satisfaction rating Based on a survey of existing custoemrs 3. Market share Sales revenue as a percentage of total industry sales in the country Internal process perspective 1. Quality measure The product’s score on an aggregate measure of quality 2. Number of improvements implemented Number of employee suggestions chosen to be implemented 3. Employee productivity (output per employee hour) Total output of completed product divided by total operating employee hours Learning-and-growth perspective 1. Employee satisfaction survey Score (out of 100) on an employee satisfaction survey 2. Employee suggestions Number of employee suggestions submitted through the formal employee suggestion scheme 3. Hours of employee training Environmental perspective 1. Toxic emission (air) Parts per million of toxic substances in the air emissions; subject to strict environmental legislation, and political sensitive 2. Toxic emissions (water) Parts per million of toxic substances in the waste water; cause significant damage to plants and animals and dangerous to humans 3. Donations to World Wildlife Fund (WWF) Donations to the World Wildlife Fund The following table shows the performance of the managers at Sydney and Melbourne: Sydney Plant Melbourne Plant Measure Target for the six months Actual % better (or worse) than target Actual % better (or worse) than target Financial perspective Return on Equity 12% 12.9% 7.5% 11.4% (5.0)% Net profit margin 8% 8.8% 10.0% 7.7% (3.8)% Reduction on production costs 10% 11.1% 11.0% 9.1% (9.0)% 28.5% (17.8)% Customer perspective Customer retention 85% 87.4% 2.8% 81.2% (4.5)% Customer satisfaction rating 90 93.2 3.6% 87.3 (3.0)% Market share 35% 36.1% 3.1% 33.8% (3.4)% 9.5% (10.9)% Internal process perspective Quality measure 75% 74.6% (0.5)% 79.0% 5.3% Number of improvements implemented 100 98.0 (2.0)% 101.0 1.0% Employee productivity (output/employee hr) 50 kg per hr 56.3 kg per hr 12.6% 51.7 kg per hr 3.4% 10.1% 9.7% Learning-and-growth perspective Employee satisfaction survey 80 65.2 (18.5)% 89.2 11.5% Employee suggestions 125 125 0.0% 135.0 8.0% Hours of employee training 70 hrs 59.1 hrs (15.6%) 79.3 13.3% (34.1)% 32.8% Required: 1. Prepare a strategy map to show the relationships between each of the performance measures in learning-and-growth, internal process, customer and financial. Use arrows to show that ‘if this measures is achieved then we can expect this to improve.’ For example, an arrow between hours of employee training and employee productivity indicates that increases in employee training will lead to improved employee productivity. 2. Evaluate each of the two managers using the following scale: Reassign: Sufficient improvement unlikely Very poor: considerably below expectation Poor: somewhat below expectations Good: somewhat above expectations Very good: considerably above expectations Excellent: Far beyond expectations, manager excels 0 1 2 3 4 5 6 7 8 9 10 3. You have a bonus pool of $100,000. Determine the amount of bonus that you would give to each of the two managers. 4. Prepare a report to the remuneration committee to justify your bonus allocations. 5. Consider how the additional measures in the environmental perspective could be integrated into the strategy map. BACC216 Management Accounting 2 Semester 2, 2017 Supplementary Assignment 2 – Case Study Plastico – Group /Individual Submission Due: 11.55 pm, Sunday, 17 December 2017 Maximum of two students per group Plastico Pty Ltd produces an innovative type of plastic that is replacing steel in the production of cars. The industry is very competitive, but Plastico has a very successful strategy focused on capturing market share by providing a high - quality product while carefully managing costs. The production process involves thousands of variables that must be monitored and adjusted to determine the energy requirements and yield (output compared with input). Highly trained and experienced engineers are the key to ensuring that the process is efficient and that impro vements are continually identified. In summary, Plastico’s strategy is to invest in training and workplace conditions to improve the engineers’ innovation and process management skills. Improvements from employee suggestions increase product quality and process efficiency, so market share then increases while production costs decrease. Increasing market share and decreasing production costs lead to higher profit margins and return on equity. The CEO has also made a commitment to managing Plastico’s envi ronmental impact. As the management accountant you will evaluate the performance of a pair of managers based on measures presented in the balanced scorecard format. In order to compare the performance of the two managers you will first construct a strate gy map that shows the causal links between performance measures. You can then evaluate the manager’s performance and determine their share of the bonus pool. The performance measures used at Plastico are: Measures for Plastico Definition for Plastico Financial perspective 1. Return on investment Net profit after tax divided by total assets 2. Net profit margin Net income/Net sales 3. Reduction in production costs Percentage reduction in production costs Customer perspective 1. Customer retention The product’s score on an aggregate measure of quality 2. Customer satisfaction rating Based on a survey of existing custoemrs 3. Market share Sales revenue as a percentage of total industry sales in the country BACC216 Management Accounting 2 Semester 2, 2017 Supplementary Assignment 2 – Case Study Plastico – Group/Individual Submission Due: 11.55 pm, Sunday, 17 December 2017 Maximum of two students per group Plastico Pty Ltd produces an innovative type of plastic that is replacing steel in the production of cars. The industry is very competitive, but Plastico has a very successful strategy focused on capturing market share by providing a high-quality product while carefully managing costs. The production process involves thousands of variables that must be monitored and adjusted to determine the energy requirements and yield (output compared with input). Highly trained and experienced engineers are the key to ensuring that the process is efficient and that improvements are continually identified. In summary, Plastico’s strategy is to invest in training and workplace conditions to improve the engineers’ innovation and process management skills. Improvements from employee suggestions increase product quality and process efficiency, so market share then increases while production costs decrease. Increasing market share and decreasing production costs lead to higher profit margins and return on equity. The CEO has also made a commitment to managing Plastico’s environmental impact. As the management accountant you will evaluate the performance of a pair of managers based on measures presented in the balanced scorecard format. In order to compare the performance of the two managers you will first construct a strategy map that shows the causal links between performance measures. You can then evaluate the manager’s performance and determine their share of the bonus pool. The performance measures used at Plastico are: Measures for Plastico Definition for Plastico Financial perspective 1. Return on investment Net profit after tax divided by total assets 2. Net profit margin Net income/Net sales 3. Reduction in production costs Percentage reduction in production costs Customer perspective 1. Customer retention The product’s score on an aggregate measure of quality 2. Customer satisfaction rating Based on a survey of existing custoemrs 3. Market share Sales revenue as a percentage of total industry sales in the country