100%(2)2 out of 2 people found this document helpful
This preview shows page 34 - 36 out of 41 pages.
plan. The table below highlights the summary of budget that you will need to analyse.SUMMARY OF BUDGET (For Resources and Operational Plan)Resource TypeProjected BudgetActual PerformanceVariance Capital/Finance$150,000 (Profit)$120,000 (Profit)$30,000Human $200,000 (Expense)$200,000 (Expense)$0Operational Management, Assessment 1 v2 Last updated on 10/09/2019 Page 34
T-1.8.1_v3Physical $250,000 (Expense)$260,000 (Expense)$10,000Based on the summary above, you will need to analyse, interpret and write a budget report (within 300 words) for management and explain the reasons of variations and for any underperformances. BUDGET REPORT FOR MANAGEMENTAfter analyzing the budget summary for the first quarter after the new operational plan, we see that there were some variations. The variations were different from what was initially expected.The analyzes made are as follows:- Financial capital - a budget of $ 150,000 (profit) was designed and the actual performance was $ 120,000, the variation was $ 30,000. It will be necessary to create some type of corrective measure tochange this scenario.- Human resources - the projected budget was $ 200,000 and the actual performance was $ 200,000, the variation was $ 0, this means that we have reached the planned goal.- Physical - the projected budget was $ 250,000 (expenses) and the actual performance was $ 260,000, which generated a variation of $ 10,000 more than initially forecast. It will be necessary to create a measure to reduce unnecessary expenses.The following report shows the performance of the new first quarter plan and shows us that improvements will be needed in two of the 3 parts.3.3:Identify areas of under-performance, recommend solutions and take prompt action to rectify the situation; Ensure mentoring and coaching are provided to supportScenario: After the first quarter of your operational plan implementation, you have previously identified some issues in budget and financial performance. Now you have also realised that there areseveral areas of concerns within operations as well. First of all, you find that performance reports database that there are several failures and some positives in meeting performance objectives by your staff members and also in overall store KPIs. These include performance failures such as: Overall checkout service speed is 75% of the assigned KPI whereas it should be over 90%Inventory, logistics and delivery operations are slower compared to the assigned KPI. Slower by 10%Errors in online delivery increased by 5%.Waste minimisation has exceeded the KPI by 10% which is good. This credit goes to everyone in the store.Human Resource recruitment was exactly within budget. Physical resource acquisition exceeded by $10,000. Your procurement department team leader has mentioned you that there were some changes in prices for some physical resources. Staff late attendance issues (increased by 10% after the plan). Stock Take sale achieved 80% of assigned KPIs and targets. Your stocktaking team needs to have meeting with you.Fifteen (15) Work Health & Safety (WHS) issues and minor incidents within the first quarter. The initial objective was to reduce to 5 incidents.