Strategic Management Accounting Tools - OzBikes Ltd Case Study - Management Assignment Help

Assignment Task :

Description of Assessment 1: 

Your answers to the requirements for the four (4) case studies will form the basis of this individual assessment task. These case studies contain information that will relate to material covered for modules 1, 2 and 3, including week 1 to week 6. 

Purpose for Assessment 1 

The purpose for this assessment is to assess you on (1) your knowledge and understanding the course content, (2) your application of that knowledge, (3) your critical analysis of information provided in the four (4) case studies. 

The case studies will be used to assess your learning outcomes 1, 2, and 3 listed below. 

1. To demonstrate a theoretical knowledge of the role of strategic management accounting in supporting strategy development and the day-to- day operations of a sustainable organisation 

2. To apply strategic management accounting tools and techniques to improve the contribution and sustainability of value creating activities 

3. To utilise strategic management accounting tools and techniques skills to ensure the role  of performance measurement and control systems in value creation is achieved, strategies are implemented and performance monitored and adjusted to improve the success of the strategies. 

Case Study 1: – Customer Profitability Analysis and Target Costs Approaches 

The Good-sleep Company produces mattresses and sells these them to its commercial customers, which are 20 retail outlets. The 20 retail outlets comprise 19 commercial customers which are part of a group of separately owned furniture stores with central purchasing and one (1) large multi-outlet retailer. The central purchasing centre for the 19 independent furniture stores buys 60% of the mattresses produced by Good-sleep Company. Mattresses purchased by central purchasing are distributed to its 19 Small commercial customers in approximately equal quantities and their individual orders are about the same size. The remaining 40% of mattresses are purchase by one (1) large multi-outlet retailer. 

Case Study 2: Supplier Performance Index Analysis 

IcyCold Company manufactures cooling systems. IcyCold produces all of the parts necessary for its product except for one electronic component, which is purchased from two local suppliers: LocalGuys Pty Ltd and NEH Pty Ltd. Both suppliers are reliable and seldom deliver late; however, LocalGuys sells the component for $89 per unit, while NEH sells the same component for $86. IcyCold purchases 80% of its components from NEH because of its lower component price. The total annual demand is 4,000,000 components. 

1 Calculate the supplier costs of dealing with each supplier (LocalGuys and NEH) 

2 Calculate the total supplier cost per component for each supplier, taking into consideration the costs of the supplier-related activities (calculated in requirement 1) and using the electronic component current unit purchase price and sales volume. 

3 Based on the analysis in requirements 1 and 2, calculate the supplier performance index (SPI) for each supplier and provide an analysis of these SPIs (i.e., what do they indicate about the performance of each supplier?).

4  Identify potential improvement that can be suggested to either or both suppliers. Provide your workings for the basis of the prosed suggested improvement in supplier activities 

5 Why and how is activity-based supplier costing important for internal decision making; especially using the SPI is the basis for the selection of a supplier.

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