Question

Frieda’s Fizz brews specialty soft drinks, including root beer and other flavors. Its vision is “To proudly produce and sell extraordinarily smooth, rich, and delicious soft drinks to satisfy kids of all ages.” The company has a reputation for high quality and unique flavor, enabling it to sell soft drinks at a premium price to gourmet grocery stores in the New York area. The company’s managers plan to expand the business to other geographic regions, but they want to ensure that they maintain high quality as the company grows. They have decided to implement a balanced scorecard, and they have chosen the following balanced scorecard measures:
Financial Perspective
1. Breakdown of manufacturing cost per case: ingredients, direct labor, packaging materials, and overhead
2. Operating profit per case
3. Return on investment Customer Perspective
4. Number of customer complaints relating to taste, freshness, package integrity, appearance, and foreign objects
5. Quality index (an internal measure of manufacturing quality, including microbiology and chemistry)
6. Percentage sales growth Internal Business Process Perspective
7. Ratio of plant production hours to total available time
8. Throughput (number of cases packaged)
9. Waste and scrap as a percent of total production cost Learning and Growth Perspective
10. Number of work-related injuries
11. Number of training hours per employee
12. Number of community volunteer hours per employee

ANALYZE INFORMATION:
The following questions will help you analyze the information for this problem. Do not turn in your answers to these questions unless your professor asks you to do so.
A. Explain why uncertainties exist about the best balanced scorecard measures for Frieda’s Fizz. (Do NOT discuss any of the measures already listed. Instead, focus on why any set of measures might not provide ideal information and on why the managers cannot know with certainty which set of measures is best.)
B. For each balanced scorecard perspective:
1. Describe the strengths and weaknesses of the measures chosen for that category.
2. Reach a conclusion about the reasonableness of the set of balanced scorecard measures for that category.
C. What are the pros and cons of implementing a balanced scorecard for Frieda's Fizz?
D. How valuable do you think the balanced scorecard will be in helping the managers of Frieda’s Fizz meet its vision? Explain.

REQUIRED
The managers of Frieda’s Fizz want your evaluation of their proposed balanced scorecard. Turn in your answer to the following.
E. Use the information you learned from the preceding analyses to write a memo to the managers presenting your evaluation of (1) whether they should adopt a balanced scorecard, and (2) the proposed balanced scorecard design. As you write the memo, consider what information the managers will need from you to help them make a final decision.



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  • CreatedJanuary 26, 2015
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