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Prepare a balanced scorecard for 2002 and its forecast for 2003

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Alan Enterprises spent $28,600 for employee training in 2002. From a total of 160 employees, eight employees resigned during the year and were replaced with new ones. Employees succeeded in introducing five innovative ideas for which management gave them recognition and prizes amounting to $7,500. Defective products amounted to 192 units from a total of 2,400 units produced. Productive time amounted to 22,500 from a total of 25,000 recorded as processing time. The company's sales amounted to $630,000 from a market which is around 9 times this size. 3 out of 50 major customers have gone bankrupt leaving uncollectible bad debts of around $19,700. Variable cost of production amounted to 56% of sales. The sales commissions are at 6%. Fixed costs amount to $129,500 and general and administration costs amount to $87,450. This is in addition to the employee related costs stated above. The company has total assets of $243,000. The company expects to increase the employee related costs by 25% in 2003 but hopes that defects will be reduced by 30%, production efficiency will increase by 7%, sales will increase by 18% - although the market will not change in total, and variable costs will decrease by 8%, fixed costs will increase by 3%. G & A will increase by 4%. Bad debts will be the same amount. Total assets will remain at the same level.

Required:

Prepare a balanced scorecard for 2002 and its forecast for 2003.

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The expert prepares a balanced scorecard for 2002 and its forecast for 2003.

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Strategic Plan, Part III: Balanced Scorecard

Resource: Exhibit 7-1 in Ch. 7 of Strategic Management

Develop the strategic objectives for your business in the format of a balanced scorecard. The strategic objectives are measures of attaining your vision and mission. As you develop them consider the vision, mission, and values for your business and the outcomes of your SWOTT analysis. Consider the following four quadrants of the balanced scorecard when developing your strategic objectives:

· Shareholder Value or Financial Perspective, includes strategic objectives in areas such as:

o Market share
o Revenues and costs
o Profitability
o Competitive position

· Customer Value Perspective, includes strategic objectives in areas such as:

o Customer retention or turnover
o Customer satisfaction
o Customer value

· Process or Internal Operations Perspective, includes strategic objectives in areas such as:

o Measure of process performance
o Productivity or productivity improvement
o Operations metrics

· Learning and Growth (Employee) Perspective, includes strategic objectives in areas such as:

o Employee satisfaction
o Employee turnover or retention
o Level of organizational capability
o Nature of organizational culture or climate
o Technological innovation

Develop at least three strategic objectives for each of the following four balanced scorecard areas identified above (Financial, Customer, Process, Learning and Growth). Your objectives should be selected, in part, based on an evaluation of a number of potential alternatives to the issues and/or opportunities identified in the SWOTT Analysis paper and table you completed in Week Three. Base your solutions on a ranking of alternative solutions that includes an identification of potential risks and mitigation plans, and a stakeholder analysis that includes mitigation and contingency strategies. You should also incorporate the ethical implications of your solutions into your selection.

· For each strategic objective, develop a metric and target using a balanced scorecard format. (For example, a strategic objective in the shareholder or Financial Perspective is to increase market share. A metric to actually measure this strategic objective of market share increase is, "The percentage of increase in market share." The target is the specific number to be achieved in a particular time period. The target for the metric of "Increase market share" could be "Increase market share by 2% for each of the next 3 years" of an increase of 2% per year for 3 years.)

Summarize your critical thinking on how you derived your objectives from your vision, mission, values, and SWOTT analysis.

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