Scott Company manufactures a DVD player called Orlicon. The company sells the player to discount stores throughout
Question:
Scott Company manufactures a DVD player called Orlicon. The company sells the player to discount stores throughout the country. This player is significantly less expensive than similar products sold by Scott’s competitors, but the Orlicon offers just DVD playback, compared with DVD and Blu-ray playback offered by competitor Nomad Manufacturing. Furthermore, the Orlicon has experienced production problems that have resulted in significant rework costs. Nomad’s model has an excellent reputation for quality.
The following information is provided:
a. Scott currently follows a cost leadership strategy, which is reflected in its lower price compared to its competitors.
b. The following figure shows Scott’s Strategy Map with the 4 perspectives and related objectives.
c. The following table shows the objectives and measures for Scott’s emerging BalancedScorecard.
Financial Perspective | Operating income from productivity and quality improvement Operating income from growth Revenue growth |
Customer Perspective |
Number of additional customers Customer-satisfaction ratings |
Internal-Business- Process Perspective | Percentage of defective products sold Number of major improvements in manufacturing process |
Learning-and- Growth Perspective | Employee-satisfaction ratings Percentage of employees trained in quality management Percentage of line workers empowered to manage processes Percentage of manufacturing processes with real-time |
Required:
1. Given the Strategy Map, strategic objectives for each of the four (4) perspective and the related measures, complete the Balanced Scorecard for Scott by improving on the measures and adding a complete set of Targets and Initiatives for each objective. (36 marks)
2. Ensure the alignment of the BSc metrics with the given objectives. (24 marks)
3. Give two (2) examples of environmental costs relevant to the DVD manufacturing industry and discuss briefly how each cost might affect any two Perspectives on Scott’s Balanced Scorecard. (10 marks)
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen