the day before yesterday, i uploaded three video chips on Youtube, but yesterday and today morning, i received 2 emails from Youtube, it stated that two of the video should not be uploaded, I do not know the exact reason. anyway, let it go. and my youtube account will be normal on 7th August.
the weather is fine today, but I do not have beautiful mode, because of the emails. anyway, I should spend more time on my study. that is the most important thing for me.
another old assignment from Advanced management accouting. there were 8 case studies, I guess. this one is about dell computer corporation
Background
Nowadays, Dell Computer Corporation has become the number one retailer of personal computers in all over the world. However, two decades ago, it was just a very small business which was established by Michael Dell with about $1000 in 1984. Why the Dell can achieve so huge success in these 2 decades? I think one key point is that its special direct selling strategy. Then, I will analysis by SWOT and around other points.
1. SWOT analysis:
Strength
1. The strategy: direct sale mode ----establish the world’s largest direct-selling computer company.
2. Dell owns the world’s most preferred computer systems.
3. Because of the strategy, it can reduce the cost and time, and reduce the price of products,
4. Good customer services and a premier provide the services to meet the customer’s needs.
5. Introduced the latest relevant technology faster than other competitors.
6. Because of Dell’s special value chain, ROE is very high.
Weaknesses:
1. Because it’s different from the traditional value chain, it will be some negative effects, such as hard to access location and less opportunity to sell.
2. Because outsourced all components, it is very difficult to manage the quality.
3. It will be very difficult to expend the selling channels because there are no other retailers in markets.
4. No market reflects from retailers and difficult to assess the market records.
Opportunity:
1. New information technologies introduce.
2. Expand the number of new consumers and achieve more profits.
3. Develop the new channels of selling to improve the sales.
4. Some competitors will retreat from markets.
Threats:
1. Threats from competitors.
2. Rapidly changing in business environment.
3. Some local burdens, such as legal, tax and local protect.
4. The fight of prices.
5. The special value chain whether is suitable for future markets.
2. Dell’s strategy:
For corporate: the core strategy of Dell is direct selling mode. It means the product is sold from manufacturer to consumer directly, no other retailers and reduce the time and cost due to this.
For business: another strategy is that dell is different from the traditional value chain, it outsourced the components but performed assembly to design an integrated supply chain,
3. The basis of Dell’s competitive advantages:
The direct selling mode is basis on the “best understand consumer needs and efficiently provide the most effective solutions to meet to needs”. Because of this rule, the corporate can communicate with consumer face to face, and identify the major problems to solute. Because of this, it can help to ensure the market position and design the market trend for the development.
4. There are 2 different value chains:
One is the traditional value chain, which is that design the manufacturers first by the analysis of market forecast, and “build to stock”. Next products store in warehouses and distribute to retailers, then sell to customers. By the contrast, there are some advantages: it can control the amount of produces. In addition, it owns many retailers and can accessed the location very easily. Moreover, the customer can test before purchasing due to this, and the salesperson are very knowledgeable. Sometimes, the retailers also can reflect the market solution to company. However, the traditional value chain is not flexible and need high cost and spend much time on turnover,
On the other hand, Dell’s value chain---the direct model is much flexible than traditional value chain. Because of no retailer, it reduces cost & time and need the customer’s meets very quickly. In addition, due to outsource all components, it reduces the cost of plant, equipment and R&D, and the price of products will be low. Thus, ROE of Dell is much higher than other competitors. But it also effect to expand on the markets, thus the sales of dell is less than IBM and HP.
5. The purpose of value chains:
The purpose of value chains analyzing is that seeks to determine where in the company’s operations from design to distribution----customer value can be enhanced or cost lowered. An organization’s value chain is a collection of the key activities performed to design, produce, and market, deliver and support its products or services. This provides the opportunity to understand the behavior of costs and the sources of differentiation.
6. Lean manufacturing:
Lean Manufacturing: "Lean" means the conduct of manufacturing operations with minimum waste - i.e. with a minimum of the seven wastes of over production; waiting time; transportation; processing time itself; movement; the production of non-conforming product; and the maintenance of stock. In truth, the elimination of waste and the pursuit of lean manufacturing operation are identical to the aims and practice of Just-in-Time. Lean Manufacturing is an approach to designing and managing production processes that emphasizes minimal inventory and just-in-time delivery, among other things, to improve the efficiency of a manufacturing process.
7. Key “lean manufacturing” principles:
Dell Computers is lean. The company took orders from customers and fulfilled them by buying and assembling the needed components. Customers got exactly the configuration they desired, and Dell reduced its need for plants, equipment, and R&D.
8. ROIC: is defined as a measure of how effectively a company uses the money to invest in its operation. Dell’s scorecard included both financial measures and non-financial measures. The scorecard was generated on a real-time basis, and relevant performance measures were broken down by customer segment, product category, and country.
9. Dell Computer's strategy was built around a number of core elements: build-to-order manufacturing, mass customization, partnerships with suppliers, just-in-time components inventories, direct sales, market segmentation, customer service, and extensive data and information sharing with both supply partners and customers. Through this strategy, the company hoped to achieve what Michael Dell called "virtual integration" stitching together of Dell's business with its supply partners and customers in real time such that all three appeared to be part of the same organizational team
another one which is also about the same case:
SWOT Analysis of DELLCOMPUTER
STRENGTHS
• Sells computer systems directly to customers (direct business model)
• Uses latest technology
• Became the no. 1 retailer of personal computers (outselling IBM and Hewlett-Packard
• Dell’s brand is one of the best known in the world
• It uses IT and has excellent customer relationship management to capture data on its loyal consumers. This allows it to produce the pc based on the customer’s own specification.
• Dell is not the manufacturer. Components are made by suppliers. Dell performs assembly
WEAKNESSES
• Much of Dell’s strategies have to rely on the capacity and capability of these manufacturing components. Continuous updates and process improvement is required so that they can keep with Dell’s pace of development
OPPORTUNITIES
• Having established an integrative and virtual network, Dell has been able to achieve the high level of corporate outcome that challenged most of the industry leaders.
THREATS
• Price competition at the suppliers level (third party Hardware and Software Suppliers) and product categorizations which could eventually affect Dell’s position in the market.
2. What is Dell’s strategy?
Answer:
Dell’s strategies are build-to-order manufacturing, mass customization, partnerships with suppliers, just-in-time components inventories, direct sales, market segmentation, customer service, and extensive data and information sharing with both supply partners and customers
Built-to-order - Dell has no in-house stock of finished goods inventories and that, unlike competitors using the traditional value chain model, it did not have to wait for resellers to clear out their own inventories before it could push new models into the marketplace. Equally important was the fact that customers who bought from Dell got the satisfaction of having their computers customized to their particular liking and pocketbook.
Partnerships with suppliers - Michael Dell believed it made much better sense for Dell Computer to partner with reputable suppliers of PC parts and components rather than to integrate backward and get into parts and components manufacturing on its own.
Just-in-time components inventories - Dell's just-in-time inventory emphasis yielded major cost advantages and shortened the time it took for Dell to get new generations of its computer models into the marketplace. New advances were coming so fast in certain computer parts and components (particularly microprocessors, disk drives, and modems) that any given item in inventory was obsolete in a matter of months, sometimes quicker
Direct Selling - Selling direct to customers gave Dell firsthand intelligence about customer preferences and needs, as well as immediate feedback on design problems and quality glitches.
Market segmentation - from large customers, both corporate and governmental buyers, to small customers, both small businesses and individuals.
Customer service - Dell contracted with local service providers to handle customer requests for repairs; on-site service was provided on a next-day basis. Dell also provided its customers with technical support via a toll-free number, fax, and e-mail.
On-line communications technology made it easy for Dell to communicate inventory levels and replenishment needs to vendors daily or even hourly.
Virtual Integration and Information-Sharing - 16 On-line communications technology made it easy for Dell to communicate inventory levels and replenishment needs to vendors daily or even hourly.
3. What is the basis on which Dell builds its competitive advantage?
Answer:
The basis on which Dell builds its competitive advantage is Low Cost. Cost leadership can be achieved through such approaches as economies of scale in production, experience curve effects, tight cost control, and sale cost minimization (in such areas as research and development, service sales force, or advertising). Dell followed this strategy selling its products directly to its customers. The company took orders from customers and fulfilled them by buying and assembling the needed components. Customers got exactly the configuration they desired, and Dell reduced its need for plants, equipment and R&D.
5. In general, what is the purpose of value chains? Why are they an effective tool in company management strategies?
Answer:
Value Chain Analysis identifies opportunities to gain cost advantages and increase differentiation.
• Cost advantage - Firms gain cost advantage by controlling key cost drivers, finding ways to reconfigure the value chain and optimising the linkages between activities. Understanding the linkages between value chains for different industries, market segments and geographic regions allows companies to optimise their business scope through acquisitions, divestitures and alliances
• Differentiation - Firms increase differentiation by understanding and selectively integrating their linkages with their customers value chains, thereby creating competitive advantage for their customers
Value Chain Analysis is used to identify potential sources of a company’s economic advantage in its industry. The analysis separates a firm into its major activities in order to understand the behaviour of costs, the associated value added, and the existing and potential sources of differentiation. It depends on an understanding of how the firms own value chain relates to, and interacts with, the value chains of suppliers, customers and competitors. Companies gain competitive advantage by performing some or all of these activities at lower cost or with greater differentiation than competitors.
6. Have you heard of the term ‘lean manufacturing’? Find out and discuss how it complements value chain analysis ?
Answer:
Lean manufacturing is an operational strategy oriented toward achieving the shortest possible cycle time by eliminating waste and reducing incidental work. The technique often decreases the time between a customer order and shipment, and it is designed to radically improve profitability, customer satisfaction, throughput time and employee morale. The benefits generally are lower costs, higher quality, and shorter lead times. The term represents half the human effort in the company, half the manufacturing space, half the investment in tools, and half the engineering hours to develop a new product in half the time.
7. Is Dell Computers ‘lean’? Discuss.?
Answer:
Dell Computers is a lean enterprise. A lean producer is typically the low-cost producer in its industry. This allows Dell to set the market price. Lean manufacturing often requires half the space and less direct labour. Lean manufacturing turns out high quality products (no return of the products) Lean producers make what a customer wants and when he wants it, so users get what they want, and they get it fast. Lean manufacturing leads to speed of delivery of product that’s configured as customers want it, speed with new product introductions, speed in management decision-making because the organization is flat and bureaucracy almost nonexistent. It can take full advantage of changes in the marketplace as they occur.
8. The primary financial objective that guided managerial evaluation at Dell was return on invested capital (ROIC). Thomas J. Meredith, former Dell CFO, even put ROIC on his number plate.’ Pg 317. Explain and discuss ROIC and why it was so important to Dell?
Answer:
Return on Invested Capital (ROIC) is a useful tool of comparing companies in terms of efficiency of management and viability of product lines. It is expressed as a percentage and calculated by dividing a company's total capital into its earnings before interest, taxes and dividends.
9. Check out Dell’s website. Any other information that is relevant to strategy?
Answer: google it :)
I just find it, this unit called: BAO3312 Advanced Management Accounting
good luck when people study this unit
7/25/2010
7/24/2010
Allied Office Products
yesterday, I went to Monash Clayton for a seminar, Cover Letter Seminar, just for 1 hour, but I think it was useful. after this semester, i need to go for a work...there will be some similar seminars held on Monash Clayton in the next few weeks. i will go to there.
after the seminar, i went home, but I totally lost in the Monash Clayton, becasue it is so huge...I study in Monash Caulfield, just few buildings in there. But Monash Clayton...I think 70 buildings in there...it took me 20 minutes to find the bus loop...
next, I put on some old assignment, Advanced Managment Accouting. there were a lot of case study when I learned that unit, but now, the teacher was changed, so the assignment was changed...
anyway, the requirements:
1. Conduct a SWOT analysis
2. Using the information in the text and in Exhibit 5, calculate ‘ABC’ based service costs for the TFC business.
3. Using your new costing system, calculate distribution services costs for ‘Customer A’ and ‘Customer B’.
4. What inferences do you draw about the profitability of these two customers?
(hint: you can compare the ‘old’ method to the ‘abc’ method using customer profitability analysis in a table format; you can show this by:
Sales
less Product Costs
less Service Fees
= Gross Profit
You can also show Gross Profit as a %
5. Should TFC implement the SBP pricing system? Give reasons.
6. What managerial advice do you have for Allied about the Total For Control (TFC) business? How does Exhibit 1 relate to this question?
7. Can ‘lean manufacturing’ practices be implemented in a company such as Allied? Explain.
8. Google ‘Allied Office Products’. Are they still in business? What other information have you discovered on Allied?
SOME ANSWERS SAMPLES:
Allied Office Products Case 8.1
1) Conduct a SWOT analysis
Under the Strengths: it was found that
They used Value added services to differentiate itself from other companies. Especially they have 2 different divisions, warehousing and distribution. In the warehousing they use sophisticated computer systems network to monitor a client’s activity history, so that means they can eliminate the time laps, running shortage of inventory. Under the distribution the staffs makes sure that they deliver the right products to right people by checking full cartons. This will increase the customer satisfaction.
They had a diverse product line providing 13 manufacturing locations +10 distribution centres better access and closer delivery points by using these monitory systems.
Weaknesses found in the case study were that
Because of Too much old data being used and most of the data was from 1990-1992. It is not accurate making decisions based on this information. And Due to the Different year’s data given, it is quite difficult to make comparisons.
ROI has been decreasing for several years that could be happen for 2 reasons. One is reduced net profit after tax, other one is increase shareholder equity. This shows that the business is not being running managed well.
And the Pick-pack and desk top delivery are both time consuming so a better form should be conducted.
Moving on to the Opportunities:
With new computer system the company can view particular clients past buying patterns so they can make pre arrangement for the next order.
And Instead of charging more for some items, allied could offer a discount for those who buy cartons. For the regular clients who buy bulk in items the company can offer discounts for that bulk rather than charging individually.
At last looking at the Threats:
There is a strong industry competition because the competitive market each and every industry try to deliver the best service to grab more customers by using different sales strategies.
• Due to the business’ Inaccurate cost systems this results in uncompetitive pricing so the company is losing lots of money. Because their loose customers and they will reduce their sales revenue.
5) Should TFC implement the SBP pricing system? Give reasons
TFC should definitely implement SBP pricing system to change out distribution services which will help TFC become more profitable since now they have a much better understanding of the drivers of costs involved in the distribution services. If TFC implement this system it will properly allocates costs
• And provide equality and fairness to all customers
• Further more, many customers will face reduced prices which are beneficial to the company.
• The system provides Profit opportunity as it is spread over many firms and allied is not as dependent on a small number of firms for positive profits which will give rise to
• Profits margins increasing.
The TFC has 13 distribution centres, so applying the SBP system would resolve the fair to all customers has implemented their pricing based on there distribution centre.
Another Version
Background:
Allied Office Products was a corporation with annual sales of $900 million in business forms and specialty paper products, such as writing paper, envelopes, note cards, and greeting cards. In 1988 the company had expanded into business forms inventory management services.
1．SWOT analysis.
Strengths:
1) Well network---the sophisticated computer systems network to monitor a client’s forms inventory, forms usage, and ordering activities.
2) Wide services, such as “value-added”, “pick pack” and “desk top delivery”
3) Good strategy: “the right product at the right place at the right time.”
4) A wide variety of products and a wide market (market share)
5) Distribution sales---understand the customer profitability.
Weaknesses:
1) Lack of competitive strategy.
2) Inventory turnover.
3) The channels of outsourcing and distribution.
4) Financial problems.
5) Accounts were similar only in the value of the product being sold but are different on the level of service they required from Allied.
Opportunities:
1) New market & new production.
2) New demands of customers.
3) Global information.
4) Competitor’s vulnerabilities.
Threats:
1) New competitors.
2) Policy changed in the industry.
3) Pricing fights.
4) Substitute production.
2. ABC based services cost:
The ABC based services costs for the TFC business is $5708.
Total storage expense 1550
Total requisition handing expense 1801
Total warehouse activity 1745
Data processing expense 612
Total $5708
3. Costs for Customer A & B:
Customer A:
$1500+$2250=$3750
Customer B:
$50,000+$7500=$57,500
4. The profitability of two customers:
Although customer A cost few, it doesn’t make a bigger profit. Customer B buy lots of things, he may take a discount from the supplier and make a profit.
Sales 79320
Less Product Costs 49620
Less Service Fees 15541
Total: 14159
5. TFC implements the SBP pricing system:
I believe that TFC will use the SBP pricing system. In face, TFC management will rework the information in the data base as if the accounts had been charged service fees based on actual usage, leaving net sales and product cost the same as before. They ranked the accounts according to profit contribution.
6. Allied operated its forms manufacturing and TFC activities as separate profit centers. The transfer of product to TFC was at arm’s length with the transfer price set at fair market value. Allied manufactured business forms in 13 locations. Although the company encouraged internal souring for customer orders, TFC salespeople had the option of outsourcing product if necessary.
7. The implement of ‘lean manufacturing’ practices for Allied:
Yes, Allied can lean manufacturing. In exhibit 6, TFC maintained 1100 separate accounts; a large portion of the business came from very few accounts. The top 40 accounts represented 48 percent of the company’s net sales. Therefore, Allied should reduce the number of the account to reduce the cost and to improve the profit.
8. Other information discovered on Allied:
Allied Office Products are still in business. To build a dynamic site from which corporate customers can log in, and within a secure and customized experience, view product catalog, place orders, and check order status and history.
and I just find that, I do the presenation on that week, so I should prepare a report of that case, the report is shown as follow:
Abstract
This report identifies different issues in the Allied Office products case study. Such as SWOT analysis, Activity Based Costing (calculations from the figures given and the explanations), Serviced Based pricing system, Managerial advice about the TFC business, implementation of Lean manufacturing and at last the other information’s about Allied Office products Case study.
Introduction
Allied Office Products is a large corporation that builds its reputation on its annual sales of $900 million in business forms and specialty in paper products. Its paper products vary from envelopes to greeting cards and writing papers.
Allied has incorporated a new program called Total Forms Controls (TFC) for its clients enabling Allied to separate this business form division to handle client accounts. TFC provides services of warehousing and distribution, inventory control and forms usage reporting. Further more Allied offers several other services such as “pick-pack and desk top delivery” (Govindarajan &Anthony 2007, p.348) to enhance their business operations.
Allied clients vary from small to large and all use their distribution center. Allied has a total of 13 distribution centers thus giving them an increase in the services.
SWOT Analysis
1) Conduct a SWOT analysis
Strengths:
• Value added services to distinguish itself
• various merchandise line
• 13 manufacturing locations and 10 distribution centres better access and closer delivery points.
• New computer system upcoming on line to follow individual freight charges.
Weakness:
• Too much old data; most of the data from 1990-1992.
• Different year’s statistics given, quite complicated to evaluate.
• Presently customers are charged a service fee is based on the cost of sales for that month regardless of level of service provided.
• ROI has been falling for a number of years.
• Pick-pack and desk top delivery are both time consuming.
Opportunities:
• pick-pack and desktop delivery
• be able to generate flexible lease programs
• Latest computer system where based on historical figures, allied can build engagements with client to have a set of Deliveries per year based on usage.
• As an alternative of charging extra for some items, allied can offer a discount for those who purchase cartons.
Threats:
• Strong industry competition all looking to make sales growth.
• incorrect cost systems follow-on in uncompetitive pricing
• If apply new SBP, a number of accounts would be charged more, may warn to leave.
(http://www.mgmt.utoronto.ca/~mccrackn/323/Allied%20Office%20Products.PDF)
Practical calculation of ABC
2. using the information in the text and in Exhibit 5, calculate ‘ABC’ based service costs for the TFC business.
Storage $1550k
Requisition Handling $1801k
Basic warehouse stock selection $ 761 k “Pick-up” activity $ 734k
Data entry $ 612k
Desk top delivery $ 250k
Total $ 5708k
Activities Cost Drivers
The cost of storage average can be driven by number cartons in inventory. The cost of requisition Handling is determined by number of requisitions. The cost of basic Warehouse Stock Selection comes from the number of lines ordered. The number of pick pack lines is the cost driver of “pick Pack” and the cost of data Entry is result in the number of lines. In addition, desktop Delivery by the number of deliveries
Cost per activities can be found.
Storage $1550k/350,000=$4.43
Requisition Handling $1801k/310,000=$5.81
Basic warehouse stock selection $761k/775,000=$0.98
“Pick-pack” activity $ 734k/697,500=$1.05
Data entry $ 612k/775,000=$0.79
Desk top delivery $ 250k/ 8500=$29.41
Calculation of distribution services costs
3. Using your new costing system, calculate distribution services costs for ‘Customer A’ and ‘Customer B’.
Customer A Customer B
Average inventory 350 cartons@ $4.43=1550.5 700cartons@$4.43=3101
Requisitions 364@$5.81=2114.84 790@$5.81=4589.9
Number of lines 910@$0.98=891.8 2500@$0.98=2450
“Pick-pack” 910@$1.05= 955.5 2500@$1.05=2625
Annual freight cost $ 2,250 $ 7,500
Extra charging after 9 months nil $7000@1.5%*3=315
Desk top deliveries nil 26 per year@$29.41=764.66
Data entry 910@$0.79=718.9 2500@$0.79=1975
Total $8,483 $23321
Here is an example how to calculate the cost using the ABC method for customer B, there are 700 cartons’ inventories, 790 requisitions and 2,500 line all lines with ‘pick-pack’ activity. Besides, customer needs 26 times desk top deliveries which cost $764.66 more. In addition, for customer B there is $7,000’s inventory stored over 9 months, the extra charging after 9 months should be $315. It added up to $23,320.56 for customer B.
Results/findings
4. What inferences do you draw about the profitability of these two customers?
Currently customer A & B both face the service charges of 32.2% of its total product costs $ 50,000 that is $16,100.
Customer A: $16,100 – 8483 = $7617
Customer B: $23321 – 16,100 =$7221
As shown here, A was over charged $ 7,617 while B was under charged $ 7,221
From another viewpoint:
old method ABC method
customer A customer B customer A customer B
sales $79,320 $79,320 $79,320 $79,320
products cost $50,000 $50,000 $50,000 $50,000
services fees $16,100 $16,100 $8,483 $23,321
gross profit $13,220 $13,220 $20,837 $5,999
% in gross profit 17.0% 17.0% 26.0% 7.7%
Compare the two cost analysis methods we could find that, the old method is difficult to figure out which activity is the major one while the ABC cost method can provide the clear information. Furthermore, it’s fair and wise to charge clients according to the service used by them but the old method just charge them at the same price despite the difference in service provided.
Recommendation of implementation of SBP
5) Should TFC implement the SBP system? Give reasons
TFC should implement SBP pricing system to change out distribution services to help TFC become more profitable.
• Properly allocates costs
• Fair to all customers
• Many customers will face reduced prices
• Profit opportunity is spread over many firms and allied is not as dependent on a small number of firms for positive profits.
• Profits margins will increase.
(http://www.mgmt.utoronto.ca/~mccrackn/323/Allied%20Office%20Products.PDF)
Managerial advice
Question 6:
What managerial advice do you have for Allied about the Total Forms Control (TFC) business?
Allied has several beneficial aspects in their operations in conducting their business such as having a greater proportion of distribution centers and services provided. However they lack in the way they service to their clients. Therefore improvements must be made in order to operate fairly to all clients in their business. As a manager, it is his/her duty to oversee and advice on any changes that must be made to enhance the business and bring it to a positive view.
Managerial Advice:
• Adjustment of the management area to level of service. The reason for this is because although customer account A and B both make annual sales of $79,320 with cost of product being $50,000, the current system charged equal service fee. Although these accounts were same only in the products being sold, they were different in the level of service required by Allied.
• A review on the true and fair to the clients. That is all similar size clients need fair treatment.
• Service and treatment must be equal to all clients; whether small or large
• Fees must be charged for usage of distribution centre at level of services provided to clients.
How does Exhibit 1 relate to this question?
In exhibit 1, it portrays a value chain concept of TFC, Allied operates its forms manufacturing and TFC activities as a separate profit centre. The transfer price of product to TFC was at arm’s length with the transfer price set at fair market value. Allied manufactures business forms in 13 locations. Although the TFC sales people had the option to outsource products if necessary, internal sourcing was more encouraged for customer orders. Clients who participated in the forms management program kept an inventory of forms at one of Allied’s 10 distribution centers. The forms were distributed to the client as required. Usage of distribution center by clients incur extra charges to cover the cost of warehousing and distribution based on a percentage of the cost of sales of the products for that month, regardless of the specific level of service provided to that clients.
Lean manufacturing
Q7. Can ‘lean manufacturing’ practices be implemented in a company such as Allied? Explain.
Lean manufacturing practices can be implemented into Allied business, because it would benefit Allied with a lot of cost and time saving. Allied spends vast amount of money on proceeds, mostly labour. It also enables identifying and eliminating non value added activities.
Lean manufacturing is an organisation’s value chain, it is collection of key activities perform to design, produce, market, deliver and support its products and services. It provides the opportunity to better understand the behaviour of differentiation.
The external or industry value chain incorporates the value-creating activities which span the industry from the initial raw material to the end consumer.
Q8. Google ‘Allied Office Products’. Are they still in business? What other information have you discovered on Allied?
Allied Office Products is still in business. Allied provides information on:
• Office supplies
• Stationary
• Cleaning supplies
• Office furniture
• Computer equipment
• Printing & Office design
Recommendation
From the case, we find out there are two main issues in the company- the costing system and the pricing system. To improve the efficiency and to act effectively the company, as shown above, should introduce the activity-based cost system; it provides the company more clear information for each customer and its more fair to charge clients according the services actually provided. It will help the company to avoid overcharge or undercharge for the customers.
Additionally, the pricing system, TFC should implement SBP pricing system to change out distribution services which will help TFC become more profitable since they have a much better understanding of the drivers of costs involved in the distribution services. By implementing these two systems the ROI of Allied may be improved as the revenue is going up. The company only needs to change a little, but can run effectively and efficiently.
Bibliography
Allied Office Products Case, Viewed 4th April 2008,
http://www.mgmt.utoronto.ca/~mccrackn/323/Allied%20Office%20Products.PDF
Anthony & Newton R, 2007, Management Control Systems, 12th edition, McGraw-Hill, Boston
after the seminar, i went home, but I totally lost in the Monash Clayton, becasue it is so huge...I study in Monash Caulfield, just few buildings in there. But Monash Clayton...I think 70 buildings in there...it took me 20 minutes to find the bus loop...
next, I put on some old assignment, Advanced Managment Accouting. there were a lot of case study when I learned that unit, but now, the teacher was changed, so the assignment was changed...
anyway, the requirements:
1. Conduct a SWOT analysis
2. Using the information in the text and in Exhibit 5, calculate ‘ABC’ based service costs for the TFC business.
3. Using your new costing system, calculate distribution services costs for ‘Customer A’ and ‘Customer B’.
4. What inferences do you draw about the profitability of these two customers?
(hint: you can compare the ‘old’ method to the ‘abc’ method using customer profitability analysis in a table format; you can show this by:
Sales
less Product Costs
less Service Fees
= Gross Profit
You can also show Gross Profit as a %
5. Should TFC implement the SBP pricing system? Give reasons.
6. What managerial advice do you have for Allied about the Total For Control (TFC) business? How does Exhibit 1 relate to this question?
7. Can ‘lean manufacturing’ practices be implemented in a company such as Allied? Explain.
8. Google ‘Allied Office Products’. Are they still in business? What other information have you discovered on Allied?
SOME ANSWERS SAMPLES:
Allied Office Products Case 8.1
1) Conduct a SWOT analysis
Under the Strengths: it was found that
They used Value added services to differentiate itself from other companies. Especially they have 2 different divisions, warehousing and distribution. In the warehousing they use sophisticated computer systems network to monitor a client’s activity history, so that means they can eliminate the time laps, running shortage of inventory. Under the distribution the staffs makes sure that they deliver the right products to right people by checking full cartons. This will increase the customer satisfaction.
They had a diverse product line providing 13 manufacturing locations +10 distribution centres better access and closer delivery points by using these monitory systems.
Weaknesses found in the case study were that
Because of Too much old data being used and most of the data was from 1990-1992. It is not accurate making decisions based on this information. And Due to the Different year’s data given, it is quite difficult to make comparisons.
ROI has been decreasing for several years that could be happen for 2 reasons. One is reduced net profit after tax, other one is increase shareholder equity. This shows that the business is not being running managed well.
And the Pick-pack and desk top delivery are both time consuming so a better form should be conducted.
Moving on to the Opportunities:
With new computer system the company can view particular clients past buying patterns so they can make pre arrangement for the next order.
And Instead of charging more for some items, allied could offer a discount for those who buy cartons. For the regular clients who buy bulk in items the company can offer discounts for that bulk rather than charging individually.
At last looking at the Threats:
There is a strong industry competition because the competitive market each and every industry try to deliver the best service to grab more customers by using different sales strategies.
• Due to the business’ Inaccurate cost systems this results in uncompetitive pricing so the company is losing lots of money. Because their loose customers and they will reduce their sales revenue.
5) Should TFC implement the SBP pricing system? Give reasons
TFC should definitely implement SBP pricing system to change out distribution services which will help TFC become more profitable since now they have a much better understanding of the drivers of costs involved in the distribution services. If TFC implement this system it will properly allocates costs
• And provide equality and fairness to all customers
• Further more, many customers will face reduced prices which are beneficial to the company.
• The system provides Profit opportunity as it is spread over many firms and allied is not as dependent on a small number of firms for positive profits which will give rise to
• Profits margins increasing.
The TFC has 13 distribution centres, so applying the SBP system would resolve the fair to all customers has implemented their pricing based on there distribution centre.
Another Version
Background:
Allied Office Products was a corporation with annual sales of $900 million in business forms and specialty paper products, such as writing paper, envelopes, note cards, and greeting cards. In 1988 the company had expanded into business forms inventory management services.
1．SWOT analysis.
Strengths:
1) Well network---the sophisticated computer systems network to monitor a client’s forms inventory, forms usage, and ordering activities.
2) Wide services, such as “value-added”, “pick pack” and “desk top delivery”
3) Good strategy: “the right product at the right place at the right time.”
4) A wide variety of products and a wide market (market share)
5) Distribution sales---understand the customer profitability.
Weaknesses:
1) Lack of competitive strategy.
2) Inventory turnover.
3) The channels of outsourcing and distribution.
4) Financial problems.
5) Accounts were similar only in the value of the product being sold but are different on the level of service they required from Allied.
Opportunities:
1) New market & new production.
2) New demands of customers.
3) Global information.
4) Competitor’s vulnerabilities.
Threats:
1) New competitors.
2) Policy changed in the industry.
3) Pricing fights.
4) Substitute production.
2. ABC based services cost:
The ABC based services costs for the TFC business is $5708.
Total storage expense 1550
Total requisition handing expense 1801
Total warehouse activity 1745
Data processing expense 612
Total $5708
3. Costs for Customer A & B:
Customer A:
$1500+$2250=$3750
Customer B:
$50,000+$7500=$57,500
4. The profitability of two customers:
Although customer A cost few, it doesn’t make a bigger profit. Customer B buy lots of things, he may take a discount from the supplier and make a profit.
Sales 79320
Less Product Costs 49620
Less Service Fees 15541
Total: 14159
5. TFC implements the SBP pricing system:
I believe that TFC will use the SBP pricing system. In face, TFC management will rework the information in the data base as if the accounts had been charged service fees based on actual usage, leaving net sales and product cost the same as before. They ranked the accounts according to profit contribution.
6. Allied operated its forms manufacturing and TFC activities as separate profit centers. The transfer of product to TFC was at arm’s length with the transfer price set at fair market value. Allied manufactured business forms in 13 locations. Although the company encouraged internal souring for customer orders, TFC salespeople had the option of outsourcing product if necessary.
7. The implement of ‘lean manufacturing’ practices for Allied:
Yes, Allied can lean manufacturing. In exhibit 6, TFC maintained 1100 separate accounts; a large portion of the business came from very few accounts. The top 40 accounts represented 48 percent of the company’s net sales. Therefore, Allied should reduce the number of the account to reduce the cost and to improve the profit.
8. Other information discovered on Allied:
Allied Office Products are still in business. To build a dynamic site from which corporate customers can log in, and within a secure and customized experience, view product catalog, place orders, and check order status and history.
and I just find that, I do the presenation on that week, so I should prepare a report of that case, the report is shown as follow:
Abstract
This report identifies different issues in the Allied Office products case study. Such as SWOT analysis, Activity Based Costing (calculations from the figures given and the explanations), Serviced Based pricing system, Managerial advice about the TFC business, implementation of Lean manufacturing and at last the other information’s about Allied Office products Case study.
Introduction
Allied Office Products is a large corporation that builds its reputation on its annual sales of $900 million in business forms and specialty in paper products. Its paper products vary from envelopes to greeting cards and writing papers.
Allied has incorporated a new program called Total Forms Controls (TFC) for its clients enabling Allied to separate this business form division to handle client accounts. TFC provides services of warehousing and distribution, inventory control and forms usage reporting. Further more Allied offers several other services such as “pick-pack and desk top delivery” (Govindarajan &Anthony 2007, p.348) to enhance their business operations.
Allied clients vary from small to large and all use their distribution center. Allied has a total of 13 distribution centers thus giving them an increase in the services.
SWOT Analysis
1) Conduct a SWOT analysis
Strengths:
• Value added services to distinguish itself
• various merchandise line
• 13 manufacturing locations and 10 distribution centres better access and closer delivery points.
• New computer system upcoming on line to follow individual freight charges.
Weakness:
• Too much old data; most of the data from 1990-1992.
• Different year’s statistics given, quite complicated to evaluate.
• Presently customers are charged a service fee is based on the cost of sales for that month regardless of level of service provided.
• ROI has been falling for a number of years.
• Pick-pack and desk top delivery are both time consuming.
Opportunities:
• pick-pack and desktop delivery
• be able to generate flexible lease programs
• Latest computer system where based on historical figures, allied can build engagements with client to have a set of Deliveries per year based on usage.
• As an alternative of charging extra for some items, allied can offer a discount for those who purchase cartons.
Threats:
• Strong industry competition all looking to make sales growth.
• incorrect cost systems follow-on in uncompetitive pricing
• If apply new SBP, a number of accounts would be charged more, may warn to leave.
(http://www.mgmt.utoronto.ca/~mccrackn/323/Allied%20Office%20Products.PDF)
Practical calculation of ABC
2. using the information in the text and in Exhibit 5, calculate ‘ABC’ based service costs for the TFC business.
Storage $1550k
Requisition Handling $1801k
Basic warehouse stock selection $ 761 k “Pick-up” activity $ 734k
Data entry $ 612k
Desk top delivery $ 250k
Total $ 5708k
Activities Cost Drivers
The cost of storage average can be driven by number cartons in inventory. The cost of requisition Handling is determined by number of requisitions. The cost of basic Warehouse Stock Selection comes from the number of lines ordered. The number of pick pack lines is the cost driver of “pick Pack” and the cost of data Entry is result in the number of lines. In addition, desktop Delivery by the number of deliveries
Cost per activities can be found.
Storage $1550k/350,000=$4.43
Requisition Handling $1801k/310,000=$5.81
Basic warehouse stock selection $761k/775,000=$0.98
“Pick-pack” activity $ 734k/697,500=$1.05
Data entry $ 612k/775,000=$0.79
Desk top delivery $ 250k/ 8500=$29.41
Calculation of distribution services costs
3. Using your new costing system, calculate distribution services costs for ‘Customer A’ and ‘Customer B’.
Customer A Customer B
Average inventory 350 cartons@ $4.43=1550.5 700cartons@$4.43=3101
Requisitions 364@$5.81=2114.84 790@$5.81=4589.9
Number of lines 910@$0.98=891.8 2500@$0.98=2450
“Pick-pack” 910@$1.05= 955.5 2500@$1.05=2625
Annual freight cost $ 2,250 $ 7,500
Extra charging after 9 months nil $7000@1.5%*3=315
Desk top deliveries nil 26 per year@$29.41=764.66
Data entry 910@$0.79=718.9 2500@$0.79=1975
Total $8,483 $23321
Here is an example how to calculate the cost using the ABC method for customer B, there are 700 cartons’ inventories, 790 requisitions and 2,500 line all lines with ‘pick-pack’ activity. Besides, customer needs 26 times desk top deliveries which cost $764.66 more. In addition, for customer B there is $7,000’s inventory stored over 9 months, the extra charging after 9 months should be $315. It added up to $23,320.56 for customer B.
Results/findings
4. What inferences do you draw about the profitability of these two customers?
Currently customer A & B both face the service charges of 32.2% of its total product costs $ 50,000 that is $16,100.
Customer A: $16,100 – 8483 = $7617
Customer B: $23321 – 16,100 =$7221
As shown here, A was over charged $ 7,617 while B was under charged $ 7,221
From another viewpoint:
old method ABC method
customer A customer B customer A customer B
sales $79,320 $79,320 $79,320 $79,320
products cost $50,000 $50,000 $50,000 $50,000
services fees $16,100 $16,100 $8,483 $23,321
gross profit $13,220 $13,220 $20,837 $5,999
% in gross profit 17.0% 17.0% 26.0% 7.7%
Compare the two cost analysis methods we could find that, the old method is difficult to figure out which activity is the major one while the ABC cost method can provide the clear information. Furthermore, it’s fair and wise to charge clients according to the service used by them but the old method just charge them at the same price despite the difference in service provided.
Recommendation of implementation of SBP
5) Should TFC implement the SBP system? Give reasons
TFC should implement SBP pricing system to change out distribution services to help TFC become more profitable.
• Properly allocates costs
• Fair to all customers
• Many customers will face reduced prices
• Profit opportunity is spread over many firms and allied is not as dependent on a small number of firms for positive profits.
• Profits margins will increase.
(http://www.mgmt.utoronto.ca/~mccrackn/323/Allied%20Office%20Products.PDF)
Managerial advice
Question 6:
What managerial advice do you have for Allied about the Total Forms Control (TFC) business?
Allied has several beneficial aspects in their operations in conducting their business such as having a greater proportion of distribution centers and services provided. However they lack in the way they service to their clients. Therefore improvements must be made in order to operate fairly to all clients in their business. As a manager, it is his/her duty to oversee and advice on any changes that must be made to enhance the business and bring it to a positive view.
Managerial Advice:
• Adjustment of the management area to level of service. The reason for this is because although customer account A and B both make annual sales of $79,320 with cost of product being $50,000, the current system charged equal service fee. Although these accounts were same only in the products being sold, they were different in the level of service required by Allied.
• A review on the true and fair to the clients. That is all similar size clients need fair treatment.
• Service and treatment must be equal to all clients; whether small or large
• Fees must be charged for usage of distribution centre at level of services provided to clients.
How does Exhibit 1 relate to this question?
In exhibit 1, it portrays a value chain concept of TFC, Allied operates its forms manufacturing and TFC activities as a separate profit centre. The transfer price of product to TFC was at arm’s length with the transfer price set at fair market value. Allied manufactures business forms in 13 locations. Although the TFC sales people had the option to outsource products if necessary, internal sourcing was more encouraged for customer orders. Clients who participated in the forms management program kept an inventory of forms at one of Allied’s 10 distribution centers. The forms were distributed to the client as required. Usage of distribution center by clients incur extra charges to cover the cost of warehousing and distribution based on a percentage of the cost of sales of the products for that month, regardless of the specific level of service provided to that clients.
Lean manufacturing
Q7. Can ‘lean manufacturing’ practices be implemented in a company such as Allied? Explain.
Lean manufacturing practices can be implemented into Allied business, because it would benefit Allied with a lot of cost and time saving. Allied spends vast amount of money on proceeds, mostly labour. It also enables identifying and eliminating non value added activities.
Lean manufacturing is an organisation’s value chain, it is collection of key activities perform to design, produce, market, deliver and support its products and services. It provides the opportunity to better understand the behaviour of differentiation.
The external or industry value chain incorporates the value-creating activities which span the industry from the initial raw material to the end consumer.
Q8. Google ‘Allied Office Products’. Are they still in business? What other information have you discovered on Allied?
Allied Office Products is still in business. Allied provides information on:
• Office supplies
• Stationary
• Cleaning supplies
• Office furniture
• Computer equipment
• Printing & Office design
Recommendation
From the case, we find out there are two main issues in the company- the costing system and the pricing system. To improve the efficiency and to act effectively the company, as shown above, should introduce the activity-based cost system; it provides the company more clear information for each customer and its more fair to charge clients according the services actually provided. It will help the company to avoid overcharge or undercharge for the customers.
Additionally, the pricing system, TFC should implement SBP pricing system to change out distribution services which will help TFC become more profitable since they have a much better understanding of the drivers of costs involved in the distribution services. By implementing these two systems the ROI of Allied may be improved as the revenue is going up. The company only needs to change a little, but can run effectively and efficiently.
Bibliography
Allied Office Products Case, Viewed 4th April 2008,
http://www.mgmt.utoronto.ca/~mccrackn/323/Allied%20Office%20Products.PDF
Anthony & Newton R, 2007, Management Control Systems, 12th edition, McGraw-Hill, Boston
7/19/2010
news,news~~~~
the new semester, but i do not have class on Monday, only two classes on Tuesday and Wensday. I want to learn MGX5440 in this semester, and I handed an application on last Friday, but so far, no change on my WES. I do not know why, maybe because the faculty is busy.
and I finished the TV show-CHUCK, and i am not sure what i am going to watch next. there is another beauty shown on the show, Hanna, i think. quiet beauty, but at the end, she broke up with Chuck, i can't recall the reason. and at the end of season 3, Chuck and Sara are together again. I do not when the reason 4 come out.
today, there is a new rule about migration, it is called Priority Processing Arrangements for Skilled Migration Visas, it is quite, and now i am not sure what's that mean. I am waiting for the explaination.
the following is from the DIAC website.
Updated Priority Processing Arrangements for Skilled Migration Visas - Effective from 14 July 2010
The Minister for Immigration and Citizenship, Senator Chris Evans, has set new priority processing arrangements for certain skilled migration visas. These arrangements take account of the changes to the Skilled Occupation List (SOL) that came into effect on 1 July 2010, as well as the revocation of the Migration Occupation in Demand List (MODL) and the Critical Skills List (CSL). These priority processing arrangements apply to applications already lodged with the Department of Immigration and Citizenship, as well as to future applications.
The new priority processing arrangements apply to the following visas:
• Employer Nomination Scheme (ENS)
• Regional Sponsored Migration Scheme (RSMS)
• General Skilled Migration (GSM) visas listed on page two of this fact sheet.
From 14 July 2010, processing priorities (with highest priority listed first) are:
1. Applications from people who are employer sponsored under the ENS and the RSMS.
2. Applications from people who are nominated by a state or territory government agency with a nominated occupation that is specified on that state or territory’s state migration plan.
3. Applications from people who have nominated an occupation on the new Skilled Occupation List (SOL) – Schedule 3 in effect from 1 July 2010.
See: http://www.immi.gov.au/skilled/general-skilled-migration/pdf/new-list-of-occupations.pdf
4. All other applications are to be processed in the order in which they are received.
Priority processing refers to the order in which the department considers skilled migration applications. Section 51 of the Migration Act 1958 gives the Minister for Immigration and Citizenship powers to consider and finalise visa applications in an order of priority that the Minister considers appropriate. The changes to priority processing do not change the criteria for the grant of a visa.
The new Direction simplifies priority processing arrangements. The new arrangements have been designed to complement other recent changes to skilled migration to ensure that the economy gets the skills it needs now. They help to better address the needs of industry by targeting skills in demand across a number of sectors, and help ensure that the skilled migration program is responsive to the current economic climate and the needs of the Australian economy. Priority processing arrangements are subject to further change in response to the economic climate and the demand for particular skills in the Australian economy.
Priority processing arrangements apply to current applications, including those in the final stages of processing. Departmental case officers must follow the Direction made by the Minister about
priority processing. Case officers are not able to respond to requests to process individual applications outside of the order set out in these processing priority arrangements. Refunds of costs incurred during processing are not available for delays in processing.
GSM visas affected
The following GSM visas are affected by priority processing:
•
Skilled – Independent subclass 175
•
Skilled – Independent subclass 176
•
Skilled – Regional Sponsored subclass 475
•
Skilled – Regional Sponsored subclass 487
•
Skilled – Independent Regional subclass 495
•
Skilled – Designated Area-sponsored (Provisional) subclass 496
•
Graduate – Skilled subclass 497
•
Skilled – Onshore Independent New Zealand Citizen subclass 861
•
Skilled – Onshore Australian-sponsored New Zealand Citizen subclass 862
•
Skilled – Onshore Designated Area-sponsored New Zealand Citizen subclass 863
•
Skilled – Independent Overseas Student subclass 880
•
Skilled – Australian-sponsored subclass 881
•
Skilled – Designated Area-sponsored Overseas Student subclass 882
•
Skilled – Independent subclass 885
•
Skilled – Sponsored subclass 886.
GSM visas exempt
The following visa subclasses are exempt from priority processing and will be processed in the order in which they are received:
•
Skilled – Recognised Graduate subclass 476
•
Skilled – Graduate subclass 485
•
Skilled – Designated Area – Sponsored (Residence) subclass 883
•
Skilled – Regional subclass 887.
Applications that are remitted to the Department by the Migration Review Tribunal (MRT), applications where it is readily apparent that the criteria for grant of a visa would not be satisfied and applications from subsequent entrants are all exempt from priority processing. They are processed in the order in which they are received or returned from the MRT.
ENS, RSMS and State Migration Plans – Priority groups 1 and 2
Applications from people who are employer sponsored under the ENS or RSMS receive the highest level of priority processing. More information about ENS or RSMS is available on the departmental website. See: www.immi.gov.au/skilled/skilled-workers/visa-permanent.htm
Applications from people who are nominated by a state or territory government agency with a nominated occupation that is specified on the state or territory’s state migration plan receive the second highest level of priority processing. State migration plans will be developed by state/territory governments in consultation with the department. They will include occupations that are in demand in each individual state and territory. State migration plans are currently being developed and are expected to come into effect during the second half of 2010.
Applicants that have been nominated by a state or territory government agency in an occupation that is subsequently specified in their nominating state or territory’s state migration plan will receive processing under priority group 2.
Occupations on the SOL - Schedule 3 in effect at 1 July 2010 – priority group 3
All applicants with a nominated occupation on the SOL - Schedule 3 are included in priority group 3. This includes both independent applicants and applicants sponsored by an Australian family member or nominated by a state or territory government (but not on a state migration plan).
Priority group 3 includes all applicants with a nominated occupation of accountant, except those already included in priority groups 1 or 2.
All other applications – priority group 4
Applicants with a nominated occupation that is not on the SOL - Schedule 3 in effect at 1 July 2010 and who are not employer sponsored or nominated by a state or territory government under a state migration plan, will be processed under priority group 4.
Applicants with a nominated occupation that is not on the SOL – Schedule 3 in effect at 1 July 2010 can only move into a higher priority group by lodging a new application with an employer sponsorship or a state or territory government nomination in an occupation specified under a state migration plan. Alternatively, applicants can only nominate a different occupation that is on the SOL – Schedule 3 by lodging a new application. It is not possible to change a nominated occupation or to change to an employer sponsored or state nominated visa category, unless a new application is lodged. A new application would require the payment of a new Visa Application Charge.
Applicants should not contact the department to request that their application be exempt from the priority processing Direction. Case officers do not have discretion to exempt applications.
Applicants with a nominated occupation of Computing Professional (nec), Hospital Pharmacist and Retail Pharmacist, who have already been allocated a case officer, will be contacted directly by their case officer to advise processing arrangements.
Options available to applicants in priority group 4
Applicants with nominated occupations in priority group 4 will have a long wait for visa processing. The options available for applicants who were outside Australia when they made their application are:
•
continue to await a decision on their visa application
•
consider eligibility for an employer sponsored visa, which would require a new visa application;
•
consider eligibility for nomination by a state or territory government under a state migration plan, which would require a new visa application
•
withdraw their application.
The options available for applicants who were in Australia when they made their application are:
•
continue to live and work in Australia (if their visa permits) while awaiting a decision on their visa application
•
consider eligibility for an employer sponsored visa, which would require a new visa application
•
consider eligibility for nomination by a state and territory government under a state migration plan, which would require a new visa application
•
apply for another substantive visa
•
withdraw their application and depart Australia.
Applicants who need to travel overseas while waiting for their application to be processed should approach their local office of the Department of Immigration and Citizenship to discuss an application for a Bridging visa B. A Bridging visa B is generally not issued for greater than three months. Applicants should not contact the visa processing centre where they lodged their application to request a Bridging visa B.
Bridging visa C holders who want to apply for work rights should contact the visa processing centre where they lodged their application.
Please note: Applicants are not entitled to a refund of their Visa Application Charge or compensation for other costs incurred in making an application.
Processing Times
Estimates of processing times that may apply to different types of applicants are provided as a guide only. As processing times are dependent on a range of factors, individual processing times may vary considerably from the published estimates. Estimates are subject to change in response to changes in application rates and skilled migration policy.
Information on estimated processing times is available from the departmental website.
Useful documents
More information on the changes to the GSM program is available from the departmental website. See: http://www.immi.gov.au/skilled/general-skilled-migration/pdf/new-list-of-occupations.pdf (101KB PDF file) http://www.immi.gov.au/skilled/general-skilled-migration/pdf/faq-new-sol.pdf ( 87KB PDF file) http://www.immi.gov.au/skilled/general-skilled-migration/pdf/options-not-eligible.pdf (113KB PDF file)
and I finished the TV show-CHUCK, and i am not sure what i am going to watch next. there is another beauty shown on the show, Hanna, i think. quiet beauty, but at the end, she broke up with Chuck, i can't recall the reason. and at the end of season 3, Chuck and Sara are together again. I do not when the reason 4 come out.
today, there is a new rule about migration, it is called Priority Processing Arrangements for Skilled Migration Visas, it is quite, and now i am not sure what's that mean. I am waiting for the explaination.
the following is from the DIAC website.
Updated Priority Processing Arrangements for Skilled Migration Visas - Effective from 14 July 2010
The Minister for Immigration and Citizenship, Senator Chris Evans, has set new priority processing arrangements for certain skilled migration visas. These arrangements take account of the changes to the Skilled Occupation List (SOL) that came into effect on 1 July 2010, as well as the revocation of the Migration Occupation in Demand List (MODL) and the Critical Skills List (CSL). These priority processing arrangements apply to applications already lodged with the Department of Immigration and Citizenship, as well as to future applications.
The new priority processing arrangements apply to the following visas:
• Employer Nomination Scheme (ENS)
• Regional Sponsored Migration Scheme (RSMS)
• General Skilled Migration (GSM) visas listed on page two of this fact sheet.
From 14 July 2010, processing priorities (with highest priority listed first) are:
1. Applications from people who are employer sponsored under the ENS and the RSMS.
2. Applications from people who are nominated by a state or territory government agency with a nominated occupation that is specified on that state or territory’s state migration plan.
3. Applications from people who have nominated an occupation on the new Skilled Occupation List (SOL) – Schedule 3 in effect from 1 July 2010.
See: http://www.immi.gov.au/skilled/general-skilled-migration/pdf/new-list-of-occupations.pdf
4. All other applications are to be processed in the order in which they are received.
Priority processing refers to the order in which the department considers skilled migration applications. Section 51 of the Migration Act 1958 gives the Minister for Immigration and Citizenship powers to consider and finalise visa applications in an order of priority that the Minister considers appropriate. The changes to priority processing do not change the criteria for the grant of a visa.
The new Direction simplifies priority processing arrangements. The new arrangements have been designed to complement other recent changes to skilled migration to ensure that the economy gets the skills it needs now. They help to better address the needs of industry by targeting skills in demand across a number of sectors, and help ensure that the skilled migration program is responsive to the current economic climate and the needs of the Australian economy. Priority processing arrangements are subject to further change in response to the economic climate and the demand for particular skills in the Australian economy.
Priority processing arrangements apply to current applications, including those in the final stages of processing. Departmental case officers must follow the Direction made by the Minister about
priority processing. Case officers are not able to respond to requests to process individual applications outside of the order set out in these processing priority arrangements. Refunds of costs incurred during processing are not available for delays in processing.
GSM visas affected
The following GSM visas are affected by priority processing:
•
Skilled – Independent subclass 175
•
Skilled – Independent subclass 176
•
Skilled – Regional Sponsored subclass 475
•
Skilled – Regional Sponsored subclass 487
•
Skilled – Independent Regional subclass 495
•
Skilled – Designated Area-sponsored (Provisional) subclass 496
•
Graduate – Skilled subclass 497
•
Skilled – Onshore Independent New Zealand Citizen subclass 861
•
Skilled – Onshore Australian-sponsored New Zealand Citizen subclass 862
•
Skilled – Onshore Designated Area-sponsored New Zealand Citizen subclass 863
•
Skilled – Independent Overseas Student subclass 880
•
Skilled – Australian-sponsored subclass 881
•
Skilled – Designated Area-sponsored Overseas Student subclass 882
•
Skilled – Independent subclass 885
•
Skilled – Sponsored subclass 886.
GSM visas exempt
The following visa subclasses are exempt from priority processing and will be processed in the order in which they are received:
•
Skilled – Recognised Graduate subclass 476
•
Skilled – Graduate subclass 485
•
Skilled – Designated Area – Sponsored (Residence) subclass 883
•
Skilled – Regional subclass 887.
Applications that are remitted to the Department by the Migration Review Tribunal (MRT), applications where it is readily apparent that the criteria for grant of a visa would not be satisfied and applications from subsequent entrants are all exempt from priority processing. They are processed in the order in which they are received or returned from the MRT.
ENS, RSMS and State Migration Plans – Priority groups 1 and 2
Applications from people who are employer sponsored under the ENS or RSMS receive the highest level of priority processing. More information about ENS or RSMS is available on the departmental website. See: www.immi.gov.au/skilled/skilled-workers/visa-permanent.htm
Applications from people who are nominated by a state or territory government agency with a nominated occupation that is specified on the state or territory’s state migration plan receive the second highest level of priority processing. State migration plans will be developed by state/territory governments in consultation with the department. They will include occupations that are in demand in each individual state and territory. State migration plans are currently being developed and are expected to come into effect during the second half of 2010.
Applicants that have been nominated by a state or territory government agency in an occupation that is subsequently specified in their nominating state or territory’s state migration plan will receive processing under priority group 2.
Occupations on the SOL - Schedule 3 in effect at 1 July 2010 – priority group 3
All applicants with a nominated occupation on the SOL - Schedule 3 are included in priority group 3. This includes both independent applicants and applicants sponsored by an Australian family member or nominated by a state or territory government (but not on a state migration plan).
Priority group 3 includes all applicants with a nominated occupation of accountant, except those already included in priority groups 1 or 2.
All other applications – priority group 4
Applicants with a nominated occupation that is not on the SOL - Schedule 3 in effect at 1 July 2010 and who are not employer sponsored or nominated by a state or territory government under a state migration plan, will be processed under priority group 4.
Applicants with a nominated occupation that is not on the SOL – Schedule 3 in effect at 1 July 2010 can only move into a higher priority group by lodging a new application with an employer sponsorship or a state or territory government nomination in an occupation specified under a state migration plan. Alternatively, applicants can only nominate a different occupation that is on the SOL – Schedule 3 by lodging a new application. It is not possible to change a nominated occupation or to change to an employer sponsored or state nominated visa category, unless a new application is lodged. A new application would require the payment of a new Visa Application Charge.
Applicants should not contact the department to request that their application be exempt from the priority processing Direction. Case officers do not have discretion to exempt applications.
Applicants with a nominated occupation of Computing Professional (nec), Hospital Pharmacist and Retail Pharmacist, who have already been allocated a case officer, will be contacted directly by their case officer to advise processing arrangements.
Options available to applicants in priority group 4
Applicants with nominated occupations in priority group 4 will have a long wait for visa processing. The options available for applicants who were outside Australia when they made their application are:
•
continue to await a decision on their visa application
•
consider eligibility for an employer sponsored visa, which would require a new visa application;
•
consider eligibility for nomination by a state or territory government under a state migration plan, which would require a new visa application
•
withdraw their application.
The options available for applicants who were in Australia when they made their application are:
•
continue to live and work in Australia (if their visa permits) while awaiting a decision on their visa application
•
consider eligibility for an employer sponsored visa, which would require a new visa application
•
consider eligibility for nomination by a state and territory government under a state migration plan, which would require a new visa application
•
apply for another substantive visa
•
withdraw their application and depart Australia.
Applicants who need to travel overseas while waiting for their application to be processed should approach their local office of the Department of Immigration and Citizenship to discuss an application for a Bridging visa B. A Bridging visa B is generally not issued for greater than three months. Applicants should not contact the visa processing centre where they lodged their application to request a Bridging visa B.
Bridging visa C holders who want to apply for work rights should contact the visa processing centre where they lodged their application.
Please note: Applicants are not entitled to a refund of their Visa Application Charge or compensation for other costs incurred in making an application.
Processing Times
Estimates of processing times that may apply to different types of applicants are provided as a guide only. As processing times are dependent on a range of factors, individual processing times may vary considerably from the published estimates. Estimates are subject to change in response to changes in application rates and skilled migration policy.
Information on estimated processing times is available from the departmental website.
Useful documents
More information on the changes to the GSM program is available from the departmental website. See: http://www.immi.gov.au/skilled/general-skilled-migration/pdf/new-list-of-occupations.pdf (101KB PDF file) http://www.immi.gov.au/skilled/general-skilled-migration/pdf/faq-new-sol.pdf ( 87KB PDF file) http://www.immi.gov.au/skilled/general-skilled-migration/pdf/options-not-eligible.pdf (113KB PDF file)
7/17/2010
haha~~~
finally, all the units are pass, i am so happy~
AFF5130 is not so good, just 66, but I got a high marks on the ongoing assessment, so 66 is not high.
AFF5100 is near 70, I think i got a good marks, because i didn't got i high marks on the assessments, there are two group assignments, and our group was not do well.
MGX9230 and MKX9550 I get D, and I really did well in MKX9550's final exam, I guess maybe over 30 out of 40.
the winter school was finished too, and a take home exam left. about the group presentation, my group got a D, but I don't think it is a high marks. anyway, the most important thing is the take home exam, and it worth 80 marks. and I don't think it is an easy exam.
the world cup is over, and Spain win the final prize, congratuations. and I lost 20 bucks during the world cup, I bet on the TAB online. this is the first time i did it. there are relly a lot of sports can be bet. well, maybe OZ loves gambling. and for one match, there are more than ten things to bet, such as who makes the first goal, what is the final score, who makes the first card...so many. and this maybe the last time I conduct a online gaming.
it rains a lot recently too. and I feel so cold.
next Monday, the 2010 semester begins, and that maybe my last semester. Come on~~
AFF5130 is not so good, just 66, but I got a high marks on the ongoing assessment, so 66 is not high.
AFF5100 is near 70, I think i got a good marks, because i didn't got i high marks on the assessments, there are two group assignments, and our group was not do well.
MGX9230 and MKX9550 I get D, and I really did well in MKX9550's final exam, I guess maybe over 30 out of 40.
the winter school was finished too, and a take home exam left. about the group presentation, my group got a D, but I don't think it is a high marks. anyway, the most important thing is the take home exam, and it worth 80 marks. and I don't think it is an easy exam.
the world cup is over, and Spain win the final prize, congratuations. and I lost 20 bucks during the world cup, I bet on the TAB online. this is the first time i did it. there are relly a lot of sports can be bet. well, maybe OZ loves gambling. and for one match, there are more than ten things to bet, such as who makes the first goal, what is the final score, who makes the first card...so many. and this maybe the last time I conduct a online gaming.
it rains a lot recently too. and I feel so cold.
next Monday, the 2010 semester begins, and that maybe my last semester. Come on~~
7/07/2010
Winter school~~
Yesterday, the agent came here to do the routine inspection, I really do not like it, but it can not be avoided. I am preparing the presentation for the BTX 5090, it is a group presentation, I do not think it is hard.
Here, I post another assignment, the corporate law, I learned it in 2008 Semester, I don't think it is a great example, but not too bad. Please do not use it for any commercial purpose.
CASE-Bell Re-Insurers Ltd (example of essay of Corporation law)
There are some economic problems in Bell-Insurers Ltd. Some directors try to solve these problems, and give financial assistance to acquire its own share. This essay is to judge the legality of the share capital transaction and whether these directors breach any common law and statute law. To answer these questions, the theory of the financial assistance and the duties of directors need to be applied, and the related stature law are Corporations Act 2001 S180- S183, S260A-S260E, also the case ASIC v Adler [2002] NSWSC 171 is exceeding similar with this one.
As S256A and Trevor v Whiteworth (1887) 12 App Cas 409 state, to protect the rights of creditors, a company is generally prohibited from reducing its issued share capital and the limited liability companies have to maintain issued share capital. The Corporations Act deals with the following transactions: share capital reductions, share buy-backs, self-acquisition and control of shares: and financial assistance. In the Bell Re-Insurers Ltd case, it uses financial assistance to reduce issued share capital.
Before 1998, a company indirectly reduce its capital if it financially assists a person to acquire shares in the company is illegal, because that is considered as offending the spirit of the rule in Trevor v Whiteworth. But according to 1998 amendments, as S260 expresses that a company must satisfy three conditions, and then it may financially assisting a person to acquire shares (or units of shares) in the company or its holding company. Firstly, giving the assistance does not materially prejudice the interests of the company, its share-holders or company's ability to pay its creditors. (S260 (1) (a))Secondly, the assistance is approved by shareholders. Thirdly, the assistance is exempted under S260C.
In this instance, Bell Re-Insurers Ltd is a company which specialising in the re-insurance industry. But recently, because of wild storms on the North Sea in Europe, a number of oil rigs were damaged and the potential for large claims being made on the reserves of Bell Re-Insurers Ltd meant the share price would probably fall. Under this situation, Charles who is the managing director of Bell Re-Insurers Ltd arranged for a $20M unsecured loan to be given to Blue Jen Pty Ltd, which then channelled $20M to Blue Enterprise Ltd. Both companies used a portion of the funds to buy shares in Bell Re-Insurers Ltd. After that the share price of Bell Re-Insurers Ltd was stabilised. This transaction can consider as a financial assistance. But this transaction hasn't satisfied any condition which can allow financial assistant happened.
Firstly, when financial assistance happened legally, the transaction must not materially prejudice to the interests of the company, its shareholders or the company's ability to pay its creditors. To make the judgement, we should measure whether the company or shareholders are suffered materially prejudice.
To answer this question, it is useful to analyse the case of ASIC v Adlder [2002] NSWSC 171. In this case, Alder is a director of Adler Corporation Ltd. HIH Casualty & General Insurance (HIHC) is a subsidiary of HIH Insurance Ltd (HIH). And Adler Corporation Ltd is a substantial shareholder of HIH. HIH provided an unsecured $10M loan to Pacific Eagle Equity Pty Ltd (PEE), which controlled by Alder. After loan PEE became trustee of AEUT. Also AEUT is controlled by Adler Corporation Ltd. HIHC's $10M loan to PEE was then applied to HIHC's subscription for $10M worth of AEUT. PEE used $4M to buy HIH shares on stock market. Later, PEE sold HIH share at $2M loss. PEE's purchase of HIH shares was designed to give stock market impression what Alder was supporting HIH's falling share price by personally buying its shares. The NSW Supreme Court held that substance of transaction is HIHC gave PEE financial assistance to acquire shares in HIH and HIHC has been suffered materially prejudiced by the fact that initially exchange $10M cash for either unsecured loan to PEE, and from the equitable rights it obtained against PEE which were of less value than the cash handed over. According to Santow J both HIHC and HIH suffered in HIH suffered material prejudice as the result of the financial assistance and therefore S260A was contravened.
Compare the two cases, the companies (HIH & Bell- Insurers) both financially assisting other company to acquire their shares. But there is a little difference. In the ASIC v Adler case, the share price of the HIH is decrease when PEE sold HIH's shares. But in the Bell-Insurers Ltd case, the share price of Bell Re-Insurers is stabilized. In another word, HIH gets $2M loss, but Bell not. But can we say that Bell Re-insurers Ltd doesn't suffer materially prejudice? No, because when the Bell loan $20M to Blue, and Blue uses this money to buy Bell's share, nobody know what will happen after that, it means that the company may lose capital from the action. And another problem is the unsecured loan. Unsecured loan is a loan where no collateral or security is given or charged to the lender. Unsecured loan is viewed as higher risk than secured loan and interest rates are generally higher to reflect this. That means Bell need to undertake more risk. If the Blue Enterprise Ltd doesn't want to pay back the loan or the Blue Ltd winds up, Bell Re-Insurers Ltd would suffer a huge loss because of unsecured loan. To sum up, the Bell is suffered potential materially prejudiced. So the share capital transaction is illegal and doesn't satisfy the S260A.
Secondly, financial assistance should be approved by shareholders, and according to SS260B (1), shareholder approval for financial assistance by a company must be given by: (a) a special resolution passed at a general meting of the company, with no votes being cast in favour of the resolution by the person acquiring the shares (or units of shares) or by their associates: or (b) a resolution agreed to, at a general meeting, by all ordinary shareholders. And S260B (4), company must to hold a meeting to decide whether to financially assisting. Go back to the case, first of all, Rod only approached Charles, and without consulting the Board or the shareholders of Bell Re-Insurers Ltd. Even though Rod informs this transaction to the Board, and they have the meeting to talk about the plan, we believe that the Board won't agree with this transaction. Because provide the unsecured loan is not a good choice for the company. And to stabilise the price of share, the company can choose a safe way to do that, but not financial assistance. Rod steers clear of Board to do this transaction, the purpose of this is dubitable. And the duty of Rod will be discuss at the duty of directors.
Thirdly, this assistance can't meet any clause of the S260C. To sum up, this transaction is illegal, because it breaches SS260A-C, and according to the S260D, if a company provides financial assistance in contravention of section 260S: (a) the contravention does not affect the validity of the financial assistance or of any contract or transaction connected with it: and (b) the company is not guilty of an offence. And the director will take charge of the action.
Another issue of this case is about the duty of directors and officers. Fiduciary duty is a very important concept in this part, which is an obligation to act in the best interest of another party. For instance, a corporation's board member has a fiduciary duty to the shareholders, a trustee has a fiduciary duty to the trust's beneficiaries, and an attorney has a fiduciary duty to a client. And in the company, the fiduciary duty is about act in good faith in the best interests of the company, exercise their powers for proper purpose, retain their discretionary powers, and avoid undisclosed conflicts of interest. And as Corporation Act states, the SS180-183 is related to these part. There are three people in this case, Rod, Charles and Linda.
Rod is a non-executive director of Bell and a majority shareholder of Blue Enterprises. As a non-executive, he should monitor the activities of the management team headed by the CEO and bring an independent view and judgment and after an outside or broad perspective to the board's deliberations. Charles is the managing director of Bell Re-Insurers who is put in charge of managing the company's daily business and deposable for the senior executives employed to manage the company. Rod and Charles are in the different positions, but when they manage the company, their fiduciary duties are the same. They need to consider the interests of the company firstly, but not his own interest. But in this case, when Rod decide to financially assist to Blue, he didn't priority consider the benefit of Bell-Insurers Ltd, but the bull Enterprise. And this transaction will increase Rod's wealth. Although this transaction can't increase Charles' wealth, but when he let this act happen, he didn't think over what will happen after that, and whether this will lose company's profit. So, both of them breach the S181-Duty to act in good faith. Also according to the analysis above, they breach the S182 and S183. S182 states that a director, secretary, other officer or employee of a corporation must not improperly use their position to gain an advantage for themselves or someone else, or cause detriment to the corporation. The S183 says a person who obtains information because they are, or have been, a director or other officer of employee of a corporation must not improperly use the information to gain an advantage for themselves or someone else, or cause detriment to the corporation. They both know the situation of the company, but they don't use information and their position to make a good decision for the company. Especially Rod, he uses his position to make the interest for himself.
Another person in this case is Linda, another director who is Charles ex-wife. She didn't participate in the transactions, but she is aware of these transactions. Linda knows what Rod and Charles will do before the transaction happens, she has the opportunity to stop it. But she didn't, and as a director of a company, she braches the S180-Care and diligence, it means a director of a corporation must exercise their powers and discharge their duties whit the degree of care and diligence that reasonable person would exercise if they were a director of a corporation's situation.
Rod and Charles maybe claim they were doing this for the benefit of the company, which means they want to make the price of the company stables. But in the ASIC v Adler case, which is similar to this case, the court held that Alder breached the S182 when he arranged a port of $10M loan to buy HIH shares. Rod and Charles do the same thing as Alder, and their behavior may increase their own wealth. When they do this kind of thing, they don't priority consider the profit of company, but their own benefit. They improperly use their position as directors of Bell Re-Insurers Ltd and misuse the company's fund. These directors would be personally liable for civil penalty under 1317E (a).
In final conclusion, Rod and Charles give financial assistance to Blue Enterprises Ltd. This transaction breaches the S260A-D. Rod and Charles as the directors of Bell Re-Insurers Ltd, both of them breach SS181-183, because of misuse their position and company's fund. Another direct of Bell Re-Insurers Ltd Linda, she breach the S180 (1), because she doesn't discharge her duty of care. The three directors will suffer civil penalties under s 1317E. They can be punished according to 1317G (1).
REFERENCE
Asic v Adler and 4 Ors [2002] NSWSC 171, (Santow J)
LexisNexis, Australian Corporations Legislation, 2008 edition, 2008
Lipton, P & Herzberg, A, Understanding Company Law, 14th edition, 2008
Trevor v Whiteworth (1887) 12 App Cas 409
Bibliography
moneynet, Glossssary, http://www.moneynet.co.uk/glossary/glossary-r-z.shtml%20at%2027%20April%202008
wikipedia, Secured loan, http://en.wikipedia.org/wiki/Secured_loan, at 25 April 2008
Subscribe to:
Posts (Atom)
Posts
