At the end of 20x1, Mejorar Company implemented a low-cost strategy to improve its competitive position. Its objective was to become the low-cost producer in its industry. A Balanced Scorecard was developed to guide the company toward this objective. To lower costs, Mejorar undertook a number of improvement activities such as JIT production, total quality management, and activity-based management. Now, after two years of operation, the president of Mejorar wants some assessment of the achievements. To help provide this assessment, the following information on one product has been gathered:

Required:

1. Compute the following measures for 20x1 and 20x3:

a. Actual velocity and cycle time

b. Percentage of total revenue from new customers (assume one unit per customer)

c. Percentage of very satisfied customers (assume each customer purchases one unit)

d. Market share

e. Percentage change in actual product cost (for 20x3 only)

f. Percentage change in days of inventory (for 20x3 only)

g. Defective units as a percentage of total units produced

h. Total hours of training

i. Suggestions per production worker

j. Total revenue

k. Number of new customers

2. For the measures listed in Requirement 1, list likely strategic objectives, classified according to the four Balance Scorecard perspectives. Assume there is one measure per objective.

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20x1 20x3 Theoretical annual capacity* Actual production** Market size (in units sold) Production hours available (40 workers) Very satisfied customers Actual cost per unit Days of inventory Number of defective units 249,600 208,000 1,300,000 104,000 83,200 $325 249,600 234,000 1,300,000 104,000 140,400 $260 15.6 7.8 13,000 5,200 312 Total worker suggestions Hours of training Selling price per unit 104 260 1,040 $195 $195 5,200 Number of new customers 26,000