ARME 210 Case_Study - New Great Investment Bank Case Study...

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New Great Investment Bank Case Study October 2000 Page 1 NEW GREAT INVESTMENT BANK BOND TRADING CASE STUDY Prepared by: Gretchen Markel JP Morgan October, 2000
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New Great Investment Bank Case Study October 2000 Page 2 NGIB CASE STUDY TABLE OF CONTENTS Learning Objectives Page 3 Case Study Page 4 Assignment Page 5 Appendix One – Memo on Sales Issues Page 6 Appendix Two – NGIB Six Sigma Program Page 7 Appendix Three – Notes from Process Review Page 18
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New Great Investment Bank Case Study October 2000 Page 3 Learning Objectives At the end of this session, students will be able to: 1. Understand how basic statistical tools and techniques can be employed to solve a business problem. 2. Understand how process management is integrated with statistical techniques in order to collect proper data sets and apply the results of statistical analysis to create pragmatic solutions to business problems.
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New Great Investment Bank Case Study October 2000 Page 4 CASE STUDY The New Great Investment Bank (NGIB) is a two-year old company. It was created as a result of the merger between Best Investment Bank (BIB) and Greatest Universal Bank (GRUB). Through the merger process, NGIB employed an approach of evaluating what BIB and GRUB had to offer in terms of the best products, people, and processes (both manual and system) in order to develop its’ new Bond Trading Group. This evaluation lasted three months with the implementation lasting another six months to complete. Russell Rose is the Head Bond Trader and Business Executive of the group. He has been reviewing the financial results of the Bond Trading Group for the past six months and has been growing increasingly concerned. The profits from his trading activities (adjusted for market conditions) have been declining for the past several months. His most recent profitability report shows that his net profits are running nearly 25% lower year-to-date than what he had forecasted at the beginning of the year. To add to the concern, Russell recently received an email from Marilyn Cummings, Bond Sales Executive, complaining about an increase in trading errors, settlement errors and customer complaints. In fact, two of Marilyn’s largest customers, the XYZ Pension Fund and Trendy Ebusiness, have recently closed their accounts with NGIB. (Appendix One is a list of customer complaints Marilyn’s team has been collecting). To further compound Russell’s worries, the head of technology and operations for the Bond Trading Group resigned two months prior. Russell needed to fill this pivotal role quickly and assign a team to review the situation in the Bond Trading Group. Russell made his decision; he appointed Wendy Gomez, one of the division heads. He also contacted the NGIB Quality Management group and requested that a Master Black Belt be appointed to assist in a Six Sigma review of the Bond Trading Group. Sigma Ro, an experienced Master Black Belt, was assigned to this project.
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This note was uploaded on 08/25/2010 for the course ECONOMICS 408 at Cornell University (Engineering School).

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ARME 210 Case_Study - New Great Investment Bank Case Study...

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