Problems Facing Campagnie Du Froid Economics Essay

Problems Facing Campagnie Du Froid Economics Essay The aim of this report is to analyse the problems faces by Jacques Trumen, the CEO of Campagnie du Froid S.A., by reviewing the performance of the 3 regional managers. The report is based on the financial analysis and the evaluation of the facts and figures provided in the case study. This report ends with recommendations for a fair compensation system. In this case, Jacques has to evaluate the performance of the 3 regional businesses in France, Italy and Spain and decide regarding the compensation of the managers according to that. Until recently, he was giving the bonus of 2% of the corporate profit to each one of the managers. However, in 2009 the performance of Spain region was very poor and had affected the overall profit of the company. This has forced Jacques to rethink about the fairness of the evaluation system. The report answers Jacques problem in deciding the strategic changes in the compensation system by evaluating the performance of each region. The Italian Region Taking into consideration all the facts and figures in the case study given, it can be said that Peirre Giraux, the regional manager of Italy, performed good in 2009. He could get 12.6% more profit than was estimated the profit plan. The negative variance of his cost of goods sold (COGS) is expected as he has increased the sales volume. The COGS increased at a lower rate in comparison to the sales which resulted in a positive variance in his contribution margin which increased by 1.65% higher than the budgeted figure. His performance is admirable because although the production is ice cream increased, he could reduce other costs like supervision, electricity, and maintenance by 7.000 Euros, this result in increasing the operating margin by 2.45%. The overall SA expense variance is unfavourable but some of it is contributed due to the increase in sales volume. Pierre needs to have a better control on some costs like the administrative salaries and expenses as it should not have increased by the current rate. The selling expenses increased by close to 10% whereas total sales grew by only 1.2%. he is not accountable for the unfavourable variance in the allocated central office expenses as it is the same for all regions and it is fixed by the companys central office. The overall outcome of Pierre performance was good. The Ice Cream Transfer After analysing Exhibit 5, it is clear that Jean, the manger of the French region, has considered COGS, other costs, depreciation and SA expenses with a profit margin of 5% for calculating the selling price of the ice cream. Adding COGS and other costs was fair on Jeans part as these are variable costs and are bound to increase with the increase in production. Jean added 0.04 Euros per litre under SA expenses which corresponds to allocated central office expenses. It is unjustified to add it because this cost is fixed by the companys central office and is equally incurred by all the divisions. In addition, Jean could have added the depreciation cost because it would have remained the same even if Spain had not imported ice cream from French region. By adding the depreciation cost to the cost of ice cream transferred, Jeans depreciation cost went down and his profit was increased considerably. So this way worked somewhat in favour of the French region. France benefited from it by incr easing sales volume at a lower fixed cost (depreciation and central office expense added to the selling price) and Spain enjoyed the advantage by satisfying its volume deficit at a cost lower than its own selling price in the Spanish market even after a price cut. That is why it can be said that the ice cream transfer was a win-win situation for Spain and France regions. The Spanish Region 2009 was a problematic year for the Spanish region for many reasons. The following points specify the main 3 factors that worked against Spain and how much did it cost Andres. 1- Too low temperature: according exhibit 6, for the first time Spain had encountered such low temperature in the last 7 years. Last time the temperature had gone below 28 C, Spain had experienced only 3.5% volume growth. Moreover, in 2001, when Spain had experienced 28 C, the volume growth rate had dropped down -2.1%. If we follow Jacques thumb rule, then predicted volume growth should be only 4.9% instead of the planned 10%. However, it was better than that as it comes out to be 6.8% (see table 1). So it can be said that Andres performed well against the natures odds by maintaining a higher volume growth than that predicted by Jacques thumb rule. Table 1 (The Spanish Region) Expected sales for 2009 4.094 Proposed increase 10% Sales for 2008 *3.722 Actual sales for 2009 3.975 Rise in 2009 253 % Rise in 2009 6.80% * Sales for 2008= expected sales for 2009/ (1+propesed % increase) 2- Machinery problem: Spanish division faced the machinery problem. Due to which, it had to import ice cream from France at a higher variable cost. Andres also had to swallow the surplus cost of supervision, energy, and maintenance due to the continuous repair and adjustment work in the machines. This increased his cost of production by 21.000 Euros which normally should have gone down because of lower production in his manufacturing unit. 3- Price cut by competitor: the problem for Spain did not stop here. Due to price reduction by competitor, the company had to cut its price by 1.5% and lost some of sales revenue in this process. But, Andress decision to import ice cream from France came out to be fruitful as he was able to satisfy its volume deficit. In spite of the fact that he had to buy ice cream at a higher variable cost, but still it was cheaper than his own selling price (after price cut). This contributed 178.000 Euros to his profit (see table 2). Table 2 (The Spanish Division) Per unit cost Total in 000 Euros Notes Cost charged by France 3.53 2.126 Subcontracted transportation *0.13 77 Incurred due to import from France Delivery expenses **0.19 115 These are not completely fixed costs and depend on sales volume. Higher the sales higher the expense Selling expenses ***0.20 119 These are not completely fixed costs and depend on sales volume. Higher the sales higher the expense Total cost 4.05 2.437 Selling price 4.34 2.616 Profit 0.29 178 *subcontracted transportation cost per unit = total subcontracted transportation cost / total volume transferred **delivery expense per unit = actual delivery expense / actual volume *** selling expense per unit = actual selling expense / actual volume Overall, it can be said that due to few unavoidable circumstances, Andres had to face losses which ruined the performance of his division. The French Region France seems to be the best performer but by a close look at exhibit 2, it is evident that Jeans performance was poor because of 3 major reasons. First, Jean employed a major workforce on an hourly basis to supervise the production and maintain the machines. This increased the supervision, energy, and maintenance costs by 118.000 Euros which reduced his operating margin significantly. Secondly, Jean added the depreciation and central office expenses to his selling price for ice cream transfer to Spain. This is unjustified as these expenses are fixed costs and would have remained the same even if Spain had not imported from France. However, including these expenses worked well for Jean as his fixed costs was distributed by a higher sales volume and increased his profit by 79.000 Euros (Depreciation + SA, from exhibit 5). Thirdly, it should not be forgotten that 603.000 litres of his sales volume came from transferring ice cream to Spain and 79.000 Euros of sales revenue from distribut ion business. Therefore, his actual total sales revenue from the companys core business was only 21.256.000 Euros (from exhibit 2). This is 1.36% less than the estimated sales revenue in the profit plan, and that is why Jean was not able to meet his projected target. In addition, if we remove the profit earned from export i.e. 180.000 Euros and distribution business 29.000 Euros, then his actual profit comes down to 1.033.000 Euros which is just 0.58% above budget (see table 3). However, Jeans decision to invest in distribution business was profitable to the company because he increased the revenue by 79.000 Euros. Assuming that the negative variance of 3.000 Euros as truck depreciation and 47.000 Euros as delivery expenses is due to the new business yet Jean managed to account a profit of 29.000 Euros in the first year itself. Table 3 (The French Region) Estimated profit in 2009 1.027 Total actual profit in 2009 1.242 Profit from ice cream export *180 Profit from distribution export **29 Profit from ice cream business excluding export and distribution 1.033 Profit above estimated 6 % profit above estimated 0.58% *profit from ice cream transfer = total actual profit **profit from distribution export = revenue from distribution (variance in delivery expense + variance in depreciation of trucks). Conclusion and Recommendations After investigating the case, it is evident that Andres can not be blamed totally for the depressing performance of Spain. Spain suffered from multiple bad circumstances in 2009, and Andres applied every trick to overcome it. In spite of Jeans decision of the distribution business was profitable to the company but his overall performance was below the expectations. Consequently, Pierre comes out to be the best performer out of the 3 regional managers. So, it is significant to keep certain factors in mind when deciding the compensation of a manager. In order to keep employees motivated to perform better, their compensation bonus should be directly linked to their own divisions profit. Jacques should decide a ratio of percentage of corporate and regional profits depending on his companys budget for bonus. For example, he should give 1% of corporate profits plus 3% of regional profits. In this way even if the companys overall profit went down due to poor performance of a particular regi on, a mangers bonus would be affected only by the percentage allocated to corporate profit. He can still enjoy the percentage of his divisions profit which is normally should have performed well. Another factor to determine the compensation would be the companys strategic goals and managers performance in achieving these goals. In order to motivate employees to exceed the expected revenues in profit plan, Jacques should give a higher percentage of the value by which the manager surpasses the expected profit. This would keep the manager motivated in undertaking the challenging opportunities to contribute to the companys growth.

The Most Influence People in Your Life

Ms Edwina, my co-worker, who is an accounting clerk at San Fernando Valley Community Mental Health Center, is the most influential person in my life because she has always supported me and given me hope. In fact, accepted to work as a payroll clerk with no accounting background and with my terrible English, I felt very stressful in learning a lot of new things at the same time, and I had no confidence in communicating with other people. Things did not improve, and I totally fell apart and wanted to give up after five months of working there.Fortunately, that was when Ms Edwina, my co-worker, who is an accounting clerk at San Fernando Valley Community Mental Health Center, is the most influential person in my life because she has always supported me and given me hope. In fact, accepted to work as a payroll clerk with no accounting background and with my terrible English, I felt very stressful in learning a lot of new things at the same time, and I had no confidence in communicating wi th other people. Things did not improve, and I totally fell apart and wanted to give up after five months of working there.Fortunately, that was when Ms. Edwina came back to work from her medical leave. The first time we met at work, I was immediately impressed with her brightly broad smile. Before long, when talking about the work I had been doing, she took her time to thoroughly explain to me about things I should understand like the workflows, and then she carefully taught me what I did not know how to handle. Since then, I have felt more and more confident and comfortable when working with her.Despite of her health problem, breast cancer, Ms. Edwina has always enjoyed her life fully, and devoted much of her time and effort to her job. More importantly, I soon learned that she was the most optimistic, encouraging and confident woman that I had ever known. I still remember the morning when I hopelessly sat at my desk crying bitterly after being yelled at by my boss only about a jo b I had not done very well. Frankly, I just wanted to quit the job right there and then. Again, luckily, Ms.Edwina came, gave me a big hug and calmly but friendly said to me, â€Å"Anh, life is not about never falling, but about the courage to get up strong again. As human beings, we all make mistakes but we must never lose hope. † Thanks to her, I finally could have the courage to go on with my challenging job every day. Better still, thanks to her, I do have hope for a better future, and I am now already working better, feeling better, and even living a better life. Ms. Edwina is truly the best teacher and friend in my life.

Bass River

In the short story’s, â€Å"The Bass, The River, and Shelia Mant† written by W. D Wetherall and â€Å"Catch the Moon† written by Judith Ortiz Cofer, the two main characters realize who they truly are by the end of the story. In â€Å"The Bass, The River, and Shelia Mant the narrator is in love with a girl he meets at his cottage in the summer. The narrator describes her in the story as â€Å"There was a summer in my life when the only creature that seemed lovelier to me than a largemouth bass was Sheila Mant. The story â€Å"Catch the Moon† includes the main character Luis who overcomes many obstacles, leading up to meeting a perfect girl for him, Naomi. In â€Å"The Bass, The River, and Shelia Mant† and â€Å"Catch the Moon† the female characters have a direct impact upon the lives of the male protagonists. The main characters both realize who they truly are by the end of the story. The change within each of these characters reveal theme. The theme in â€Å"Catch the Moon† states that love can help us move on, and confront our problems.The theme in â€Å"The Bass, The River, and Shelia Mant† concentrates on following your heart and not letting other people change you. In â€Å"The Bass, The River, and Shelia Mant† the narrator undergoes a tough interaction with Shelia Mant. During the story Shelia says to the narrator â€Å"Look,† she said. â€Å"I can get Dad’s car. † â€Å"It’s faster this way,† I lied. â€Å"Parking’s tense up there. Hey, it’s safe. I won’t tip it or anything. † Shelia could not of broken the narrators heart any more at this point. The narrator had spent hours of the day trying to make the canoe sparkle and clean it up.The narrator was shooken up by this, but as the story continued he realized Shelia’s attitude. Shelia told the narrator straight up that she does not like fishing. Once the narrator catches th e fish he has always dreamed of cathching gets on his fishing rod! Shelia states she doesn’t like fishing and its dumb. He had realized she was so careless about him or anyone else and just cared about herself. When they get to concert she rides home with another guy leaving the narrator on their date. Human interactions bring in best or worst have to know how to react

Real but Not Really the Reality Tv Genre - 1676 Words

Kate Woodward MCJ 162 T Th 8-9:15 Real But Not Really: The Reality TV Genre When Philo T. Farnsworth invented the electric television, he probably did not think that it would be used to show people eating bugs, finding husbands based on votes of viewers, or living on deserted islands. But that is exactly what you can see any given night on television now. This newest form of television programming fad is the reality television genre. Reality television is now on every station, every night, everywhere. The web page Fact Monster credits the beginning of reality TV as beginning around 2000 when a little reality game show called Who wants to be a Millionaire hit television screens. Millionaire saw the†¦show more content†¦This is what makes Survivor a more well rounded show as opposed to a half hour of adrenaline and disgusting foods. When looking at reality television we get a skewed sense of reality. First of all, in reality shows most people are better looking than the average civilian. If they are not terribly good looking they are at least charismatic, or interesting characters. Fear Factor very rarely has people who are overweight, old, or unattractive. They promote such specials as Fear Factor: Models or Fear Factor: Miss America. Survivor is more varied in their range of people, but even if the contestants are unattractive, older or more overweight they are always at least interesting in their lives and the way they play the game. Although they claim to be reality, all reality TV shows are edited for time and to make them more interesting, which is part of why they skew our view of reality. For instance, no one is ever just plain boring on reality television shows. At least if they are those parts get edited away to make them seem at least slightly entertaining. What this tricky editing leads us to believe when we watch is that the way these people are acting is the way everybody in society acts or should act. 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