Lecture 5 questions for lecture.docx

Lecture 5 questions for lecture.docx - AYB321 Strategic...

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AYB321 Strategic Management Accounting Lecture Question Lecture 5: Balanced Scorecard (Part 1) 1. Question : Jarrett Company produces moulds that are used by producers of ski boots and snowboards. Many of its customers use just in time (JIT) manufacturing, and on-time delivery of the moulds is critical because customer production is halted if the moulds are not available on time. In the past, managers (including Bill Thompson, the Operations Manager) at Jarrett have been rewarded based on financial performance and this has led to actions that are inconsistent with maximising shareholder value. Near the end of each quarter, Thompson evaluates expected profit in relation to the company’s profit goal. If expected profit is below the goal, he rushes into production customer orders that have a high profit margin – even if the orders are not due for two or three weeks. Thus, deliveries of high profit margin jobs are often early and deliveries of low profit margin jobs are often late. On-time delivery has been identified as a
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