Acct2220 Zeigler: Capsim Foundation Round Two Summary
H/W#8 Solution Commentary - MoreBalanced Scorecard Questions
Reminder: Information about the Balanced Scorecard is available two separate ways:
a) For actual results of processed rounds, login and choose “Reports” on the left hand side of the screen, then choose Balanced Scorecard.
b) For pro-forma(estimated/projected) Bal Scorecard results relating to next round decisions,download the Foundation Excel file (or Web Spreadsheet), enter your decisions and then go to “Proformas”. Select Balanced Scorecard.
Required: Using ActualB/S results for Round Two, answer the following questions:
1) Which of the four Scorecard categories includes “Stock Price”? How many points are available and how do you earn the maximum points for this metric? Would you expect this metric evaluation (range of stock price) to increase as the years (rounds) progress?
Scorecard Category: “Financial” Perspective.
Eight (8) points are available for a stock price in excess of $27 per share (for Round 2).
- Yes, this metric increases as the rounds progress. Others, may not (per class discussion).
2) Which of the four Scorecard categories includes “Employee Turnover Rate”? Per your Round 2 Fasttrack results (FT pg 9), what was youractual employee turnover rate? Does this appear to coincide with the Scorecard points earned (max of 7pts available here)?
Various Employee Turnover rates indicated…
This Scorecard category (Learning & Growth) addresses employee turnover rates. Full credit for this category is earned (in Rnd 2) for a turnover rate less than 9%. This metric changes (gets lower) as we progress. For example, Round 3 full credit requires <= 7% turnover. Actualturnover rates are found in the “HR/TQM Report” (Fasttrack - pg 9) under Human Resources.
3) Which of the four areas includes“Stock-Out Costs” and “Inventory Carrying Costs”? Why do you think both of these metricsare included within this particular area? What is the trade-off here? Clearly discuss your reasoning. Next, what would be the “ideal” ending inventory amount (in units) to earn the maximum five (5) points available for each metric?
Both metrics are evaluated as part of the “Internal Business Processes” category.
Proper mgmt analysis of inventory levels is critical to the success of the firm. This metric evaluates mgmt efficiency by having enough inventory to meet customer demand, yet keeping excess inventory (and associated holding costs) to a minimum. The trade-off: Too much inventory ties up cash. Too little inventory results in lost sales. Accordingly, the “ideal” ending inventory balance would be “1” unit. This would be enough to satisfy demand with no (minimal) inventory carrying costs. Note: A 12% “carrying cost” charge applies for any ending inventory.
4) Under which of the four areas is “S,G&A Expense” addressed? What is being measured here, what should be the goal and how does your company earn the maximum 5 points?
S,G&A Expense, part of the “Customer Perspective”,should be kept within a range as related to a percentage of your sales. Full credit is earned between 7-19% of sales in Round 2. You firm should spend enough to “get the word out” (i.e. primarily marketing), but attempt to keep your S,G&A expense within this range.
Note: One-half of the 1000-point Comp-XM Examination relates to your individual “Balanced Scorecard” score. Be sure to review this score with your group every round to confirm your understanding of each metric involved prior to the start of the examination.