The “Movie Merchandise Company” Case Study Accounting Assignment Help

Assignment Task

Coursework Part A: How Many Souvenir Books to Produce?
The first part of the coursework concerns a decision about a production batch size for a major event next summer. “Taking place over the weekend of Saturday 14th and Sunday 15th August 2021 at INTU BRAEHEAD, Film & Comic Con Glasgow promises a fun weekend where you can meet celebrity guests, browse the many trader stalls, get hard to find items and enjoy some cosplay, a must for all fans of pop culture.”
The “Movie Merchandise Company” plans to produce a batch of souvenir books to sell during the weekend of Comic Con. The book has been designed and priced, but it has not yet been decided how many to produce. The company want to choose the batch size that will maximise their profits. In order to help them make the right decision they have asked you to perform a Monte Carlo simulation analysis of the expected profits. They have provided you with the following information:
It is known that there will be fixed production costs of £10,000.
There will also be variable production costs. For each book the company produce there will be an additional cost of £5.
The revenue from each book sold will be £12.
After doing some extensive market research it predicts that customer demand for the book will be normally distributed with a mean value of VARIABLE 1 and a standard deviation of VARIABLE 2.
Remember, the company cannot sell more books than it has produced – whatever the demand. It is also assumed that there is no cost for disposing of any surplus books that are not sold.
Due to a number of manufacturing constraints the options for the production batch size are either VARIABLE 3 or VARIABLE 4. That is the decision the company has to make and about which you have to advise them.
On the basis of your simulation analysis, you should provide the necessary information for the company to make its decision. In particular, what are the expected
profits for each production batch size? You should consider the key statistics (mean, maximum profit etc) and a graph of the frequency distribution.
Coursework Part B: Predict the Project Duration Time
The company in part A also has to plan when to start this particular project in order to have the books ready in time for Comic Con which will take place during August 2021. The books will be on sale at INTU BRAEHEAD when the event is taking place – but not available anywhere else or at any other time. Bear in mind, the company has many other projects in progress, and does not have much space to store finished goods before they are sold.
It has drawn up a project plan for the various stages of this project – including manufacturing, packaging and marketing. They have identified the 10 main activities and the dependencies between them. They have also predicted the duration time (in days) for each activity. In each case, duration times are best modelled by a Normal* probability distribution with the given means and standard deviations. This information is in the table below:
Activity Depends on Estimated Duration (Days)
Mean Standard Deviation
A – 20 5
B A 24 6
C A 28 7
D B, E 20 5
E C VARIABLE 5 VARIABLE 6
F C 24 6
G F 20 5
H D 24 6
I H, G 16 4
J I 20 5
Your task is to find the expected duration of the whole project and then help the company decide when it should start.
*A sample of manufacturing times were collected from a number of similar projects and are shown in Appendix A. You may want to analyse this data and discuss whether the choice of the Normal distribution is really suitable.
Coursework Deliverables: Presentation and Spreadsheet
Presentation. You should prepare a video recorded powerpoint presentation (between 10 and 12 minutes) about the outcomes of their risk assessment. This should be directed towards the company and help them make the decisions they have consulted you about (preferred batch size and production start date). In preparing your presentation you should pay particular attention to the issue of risk communication; consider carefully how it would be best to present your findings to the company. Think about the best use of words, numbers, tables, graphs, diagrams, labels – or something else? Will your results be correctly understood?
Spreadsheet. You should submit a spreadsheet showing your calculations for Parts A and B. (Calculations of expected profits for both batch sizes and project duration time). The spreadsheet should also include a separate sheet that describes briefly how you have reached your conclusions. It should also include a brief section where you discuss technical issues such as the choice of the correct probability distributions and the number of iterations or repetitions to run; do you think your models and results are realistic? You might also include some brief comments about any extreme or unusual results.
 

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