Binson’s Country Markets Essay Example

or category. It is important to analyze all products as no item is exempt from examination.

Activity and process analysis can identify opportunities for efficient improvement and cost reduction. By examining activities from a process perspective, we can determine the profitability of each department. Our departments will be categorized as follows:
- Bakery: specializing in fresh breads
- Bulk foods: offering a wide range of groceries
- Dairy: providing frozen foods
- Deli: offering a variety of meats, cheese, olives, salads, prepared foods, delivery, and e-mail sales
- Meat: specializing in poultry, fish, and other meats
- Produce: focusing on fruits, vegetables, and flowers

Under a BBC system, each department can utilize cost drivers to measure and allocate costs.

• Attending customer complaints
• Coordinating with other areas
• Deal with returns and exchanges I elementary management
• Temperature control
• Cleaning the area
• Customer serving
• Dealing with suppliers Supervision
• Training

After determining the sales and cost drivers for each department, we analyze the activities involved in providing services and products. During this detailed analysis, we question whether each activity adds value or not. If the cost is high, we identify the root cause and find a solution.

Value and process analysis will reveal these questions and direct management's focus towards finding the answers. Regarding the financial statements, the company can create consolidated financial statements for each store and establish internal records to assess profitability at a department level within each store.

Inexperienced Management Team

Our current management team lacks sufficient experience in handling staffing issues. The

existing scheduling system results in either an overstaffed or understaffed situation.

Although two dedicated and experienced employees have been with the company for a long time, they lack supervisory experience. Staff scheduling is not properly managed, and there is no current policy and procedure manual or rules for the staff to adhere to. This has resulted in mismanagement of staff scheduling, leading to inefficiency, inadequacy, excessive staffing, overtime costs, and improper customer service. To address these issues, the company should create a policy handbook that outlines the code of conduct for employees.

We can establish an effective work allocation system by assigning appropriate responsibilities to employees. To simplify staff scheduling, we can introduce policies and procedures that enable employees to receive training in multiple departments. It is essential to hire experienced general managers for each store to address significant staffing concerns, including work schedules. Additionally, assistant managers with expertise in overseeing multiple departments should be recruited, aligning with the management accounting system proposal.

Existing store employees will be evaluated for assistant management roles since they can offer valuable advice to the new general managers based on their experience.

Inefficiency of Shipping and Receiving Area

The implementation of the new loading docks is expected to result in an additional $100,000 in sales and a $50,000 reduction in labor costs annually. However, it is crucial to consider the financial implications before implementing this system. To determine its feasibility, a Net Present Value (NAP) calculation must be conducted. This calculation assesses the present value of all cash inflows and outflows, taking taxes into account and applying a discount rate.

If the sum of all amounts added is

positive, it is considered that the proposal is rejected because it would require investing more money than the actual value of the loading docks. Nevertheless, when making a decision using the NAP calculation, it is important to always take into account that future circumstances can change, which are not currently visible. These circumstances might include overestimating the increase in sales and the savings in labor costs. By installing new loading docks at the stores, the unloading process will be accelerated, allowing for faster stocking of goods on the shelves.

The company's goal is to increase efficiency and sales by installing new loading docks. To achieve this objective and improve management, it is recommended that the company adopt the Activity Based Costing system. This system will help identify opportunities for cost reduction and enhance profitability. Moreover, a chartered accountant's expertise will be necessary for the preparation of consolidated financial statements and individual store financial statements.

The internal records should be prepared by a bookkeeper to indicate the sales and costs of each department. These records will then be used by the chartered accountant to prepare the financial statements. In order to effectively manage costs and staffing, the company should employ professional managers to create a staff scheduling system. Assistant managers should also be hired to lead the staff and departments. Additionally, it is recommended that the company invest in installing new loading docks as it will have a positive impact.