It includes a description of some of the issues CML Group management faces as the company moves forward with its IPO. Topics and issues addressed in this case include: Considerations in selecting an underwriting team, The IPO market; IPOs as a mechanism for private investors to reap their investments; and short-term management responses to changing …
In 1996 Insteel introduced an activity-based calculation system (ABC). He considers pallet nails to be his most profitable product and decides to expand the number of cells used to make pallet nails from two to four. A repeat of the 1997 ABC study shows that pallet nails have become the least profitable product.
The ARES team officially proposes that Burlington Northern implement the ARES system. The project met resistance. Given the financial restructuring and high levels of debt, executives wonder if the company can afford ARES. Weak links during the ARES development process with corporate strategic planning, corporate capital planning, and other corporate functions are of concern. Executives …
The case describes two pilot projects for the application of activity-based costing to measure patient treatment costs. It presents process maps and financial data on the processes used during (1) a visit to a plastic surgeon for three different diagnoses and (2) the application and removal of three different models in the orthopedic cast room. …
The merger of Asea AB and BBC Brown Boveri required the restructuring of operations and the change of organizational cultures. Competitive success also required the advantages of size for political reasons and for reasons of customer orientation, while remaining “local”. The case describes this competitive pressure, which led to the decision in favor of a …
The CEO of the marketing and refining division of a large oil company is in the process of making a profit. He is converting the highly centralized and functionally organized area into 17 independent business areas and 14 internal service companies. In addition, the division is launching a new market-segmented strategy targeting high-end buyers. However, …
Discusses the use of budgeted rather than historical data in an activity-based calculation (ABC) model and argues for calculating rates based on practical capacity rather than actual occupancy. An ABC model does not need to limit itself to analyzing historical data. When cost driver rates are calculated based on forecast data, they can be proactively …
In 2019, the price manager of the US manufacturing plant of the German-based chemical manufacturer Sparrow GmbH (Sparow) asked the project manager of Roland Berger, a global management consultancy, for his opinion on the price of the Sparrow’s offer of a basic chemicals contract. with Impendium Chemicals. Basic chemistry was an industrial and highly competitive …
At the annual general meeting in May 1996, Alcoa CEO Paul O’Neill reported that Alcoa had made great strides to become a world leader, both in terms of occupational safety and profitability. This confirmed O’Neill’s decades of emphasis on safety as the company’s guiding value. Despite these successes, O’Neill struggled with Alcoa’s treatment of employees …
Airline frequent flyer programs offer members the opportunity to earn free flights by accumulating miles. Accounting and reporting on airline commitments and the cost of frequent flyer programs raise difficult measurement questions. In 1991, the US Securities and Exchange Commission began requiring airlines to disclose the number of members of the free flight program. The …