BUS687 Week 2 – Assignment

this is my week 2 assignment and I need it by Sunday November 21 2020 all resource is available below in the Documents and Videos. BUS687 Week 2 – Assignment Document is the assignment that have the instruction

Suggestions for Q1 and Preparing your Annual Plan (Budget Commitment)

· Your Decisions in “Quarterly Decisions” need to be linked to (support) your Strategy and involve all 4 quarters to complete your plan. The data currently in the 
“Quarterly Decisions” 
when you first open the tab (start the simulation) is the prior management’s plan, and rolls up to a net income commitment of $235,683. Anything can be changed in these decisions across all 4 quarters to create your plan for the year.

· Review the data found in 
“Quarterly Dashboard,” “Financial Statements,” “Supply Chain Mgt,” 
and 
“R&D.” 
The time series show both actual (A) and proforma (P) based on your current decisions (the current quarter). For example, you can find all price details at the bottom of Distributor Financials (found in Financial Statements). All competitors had identical pricing through end of prior year (the retail price – which includes distributor margin – was $611; the price to the distributor was $550). It will also benefit you to review the  
“Internal Emails and Industry News” 
in 
“Inbox”.

· Role play is available immediately in Q1, and should be used before you finalize your plan. Read the details very carefully. Keep in mind there can be economic benefit to qualitative and quantitative information. Consider the impact of role play on achieving your strategy, net income, and the impact on cash flow. Role play is limited each quarter so have a plan prior to reaching out to any of the characters.

· Your Net Income commitment for the year needs to be in the range of $300,000 to $400,000, as directed by your owner. In creating your plan, consider all the basic essentials of budgeting from your Accounting and Finance courses, as well as the TRI Corp Critical Equations found in 
“Help.”

· Your budget (plan) starts with assumptions you make from the 
“Market Forecast” Graphic
 in 
“Quarterly Decisions.” 
Your estimate of 
“Units Sold” 
in decisions is driven by your share assumption. The “
Units Sold” 
estimate drives many of the subsequent decisions, most importantly, making sure your supply chain is in balance. Remember there are numerous lag relationships in the decisions. You can model your plan (the “Model Your SRO” button) at the bottom of the 
“Quarterly Decisions” 
as often as you like, and you will see any production constraints after modeling your plan (e.g., not enough raw material), as well as the revised plan for the year.  The  financial statements will also be updated when you model your SRO.

· It can always be of value to review the original memos and emails. We also highly suggest you subscribe to (i.e., check off) the 
“Market Report” 
and 
“Business Intelligence Report” 
for all 4 quarters at the bottom of the decisions. Failure to do so will create a lack of comparable competitor data. The cost-benefit tradeoff is for accepting.

· Only when you have your finalized Net Income plan (between $300,000 and $400,000 ) will you check 
“Check here then click the below button to submit your SRO.” 
found at the bottom of Quarterly Decisions. This will submit your Annual Plan and Q1 decisions for competitive interaction.

Week 2 – Assignment

Decisions for Quarter One and Quarterly Business Review

[WLO: 3] [CLOs: 1, 3, 4]

Part I: Decisions for Quarter One. Prior to working on your Decisions for Quarter One, review the following through the Growing Your Business simulation, the “Suggestions for Quarter 1” pop-up screen, any Quarter One Internal Emails and/or Memos, and watch the Preparing Your Financial Commitments video. The pop-up will be available at the lower left (Blue Guidelines) of the Executive Summary Decisions Tab and the video, emails, and memos can be re-accessed through the Help section.  Additionally, read Turning bean counters into difference makers: How corporate finance is changing with the times, Why financial dashboards matter, and Five pointers to get you started, and What are your financial statements telling you.

The Decisions for Quarter One Assignment

· Must be completed through the 

Growing Your Business simulation

.

· Consider the following questions as you prepare your annual budget/plan (if the answer is “No” to any of the questions you may be at a Competitive Disadvantage and lack critical information to draw inference from):

· Did you

· Request/purchase the Marketing Report and Business Intelligence Dashboard (BID)?

· Utilize the 3 available role plays for Qtr.1?

· Consider in the R&D Projects (other than Project 2, for which you may want to complete funding in Qtr.1)?

· Must use the Role Play.

· It is critical you read the details of the role play very carefully and any questions should immediately be referred to the Help Desk.

· You can gain differentiated competitive advantage through effective use of the role play.

· Some role players only provide qualitative information, while others provide the ability to negotiate with quantitatively.

· The role play is a scarce resource because of the limited number of calls per quarter.

· Must submit your Quarter One Budget Plan.

· Periodically, as you modify inputs to use the “Model My Plan” at the lower right to see the impact of your decisions on the Financial Metrics.

· Input your financial decision and then click on the blue Submit My SRO button on the bottom right of the Quarterly Decisions screen.

· You must submit your Quarter One Decisions prior to moving on this week’s Quarterly Business Review assignment.

Part II: First Quarter Quarterly Business Review (QBR). You must submit your Quarter One Decisions prior to moving on this week’s Quarterly Business Review assignment. Prior to beginning work on the First Quarter Quarterly Business Review, review the following through the Growing Your Business simulation, the Variance Analysis video and the content from the Suggestions for Quarter Two Decisions pop-up. The video will provide you with a variety of financial tools, routinely used in Financial Planning & Analysis, for planning, meeting commitments and growth purposes. These are tools any business leader, regardless of function, needs to have a working knowledge.   Real world examples will be presented throughout the simulation. You can always re-watch the Variance Analysis video in the Supplementary Review Materials in the Help section. In addition, there is a TRI Corp Critical Equation in PDF format that can also be found in the same section. Additionally, read Turning bean counters into difference makers: How corporate finance is changing with the times, Why financial dashboards matter, and Five pointers to get you started, and What are your financial statements telling you.

With the completion of Q1 you are responsible for completing your first Quarterly Business Review (QBR).  This is a qualitative and quantitative summary of your competitive performance for Q1. Business reviews (or Operational Reviews) are a routine part of annual corporate activities and are very cross-functional in nature.  A major component of a QBR is around meeting commitments that are embedded in your budgetary planning process. Meeting commitments are seen explicitly in your Variances. These learnings are designed to enhance your performance in future Quarters.

The Quarterly Business Review Assignment

· Must be completed through the 
Growing Your Business simulation
.

· After logging in, go to the Quarterly Decisions tab on the top right of the simulation site and then click on the Executive Summary tab to access the Quarterly Business Review section.

· Must be completed and submitted using all of the data provided including

· Quarterly Pre-Tax Net Income relative to Plan for the Quarter

· Review the 

Pre-Tax Net Income Chart Explanation

 document

· Cash Flow walk

· Pre-tax Net Income in Plan

· Must show that Hisco is on track to Meet/Exceed its Annual Net Income Commitment through an evaluation of both quantitative and qualitative techniques for business analysis and decision making.

· Must create specific business tactics to achieve organizational survival and growth.

· After completing, check the box and submit in the lower right.

· After completing the simulation, students must save the provided pdf from the pdf found within the Executive Summary tab of the Quarterly Decisions page and submit it through Waypoint. Verify your submission was successful.

· To access the PDF for submission, click on the QTRLY Decisions tab from the simulation home page and then go to the Executive Summary tab. Within the Executive Summary page, you will find a Download link associated with each quarterly decision you completed.   

· Remember, you will be receiving feedback on your QBR each quarter. You should review the feedback prior to submitting next quarter’s decisions, as there may be some critical learning that can help your performance in the next quarter.

· Must use scholarly sources in addition to the course text.

· The 

Scholarly, Peer-Reviewed, and Other Credible Sources (Links to an external site.)

 table offers additional guidance on appropriate source types. If you have questions about whether a specific source is appropriate for this assignment, please contact your instructor. Your instructor has the final say about the appropriateness of a specific source for a particular assignment.

· Must document any information used from sources in APA style as outlined in the Ashford Writing Center’s 

Citing Within Your Paper (Links to an external site.)

· Must include a separate references page that is formatted according to APA style as outlined in the Ashford Writing Center. See the 

Formatting Your References List (Links to an external site.)

 resource in the Ashford Writing Center for specifications.

Carefully review the 

Grading Rubric (Links to an external site.)

 for the criteria that will be used to evaluate your assignment.

Sheet

1

A

’21

0 0 0 0 0

$550.00

$575.00

40

44.0

5 0

0

0 0 0 0 0

0 3 3 3 0

8

1.2

1

$0.00 $0.00 $0.00 $0.00

$0.00 $0.00 $0.00 $0.00 $0.00

$45,000.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00 $0.00 $0.00

$0.00 $0.00 $0.00 $0.00 $0.00

$40,000.00

$25,000.00 $25,000.00

$25,000.00

Quarterly Decisions
Plan	Q4’2														0	Q1’21	Q2’21	Q			3	Q4’21
Sales
Total Market Demand [Units]	2,48	5	3,047	3,891	5,044	6,637
Lost Sales [Units]
Units Sold [Units]	829	1,005	1,322	1,665	2,190
Price [$]		$550.00		$575.00	$580.00
Terms [Days]	60	45		40	30
Average Collection Period [Days]	64.4	47.0		44.0	34.0
Production
Raw Material On Order [Units]	1,000	900	1,825	3,550	3,000
Units Produced [Units]	1,166	600	1,400	1,900	3,400
Labor Force Hires [People]	10	17
Labor Force Layoffs [People]
Lines On Order [Units]
Planned Time		1.2	1.1	0.9
Effectiveness	85.40%	96.80%	72.70%	90.00%	92.00%
Discretionary Costs
Quality Engineering Expense	$42,000.00		$40,000.00		$45,000.00	$90,000.00	$80,000.00
Research Funding Expense																							$0.00
Project 01 Funding
Project 02 Funding	$35,000.00
Project 03 Funding
Inventory Rework Cost
Marketing Expense	$41,000.00	$46,000.00	$72,000.00	$135,000.00	$142,000.00
Advertising Expense	$31,000.00	$28,000.00	$30,000.00				$25,000.00
Lean Six Sigma Expense	$32,000.00	$38,000.00
Building Lease and Utilities	$79,953.00	$70,951.00	$75,015.00	$84,293.00	$87,350.00
Reports
Marketing Report
Business Intelligence Dashboard
Quarterly Decisions
Expected OM Levers for Q1’21 *
* All Ceteris Paribus
* Variable/Base Cost Improvements Imply Cost Reduction
** % Volume Increase Required To Maintain CM $ Facing a 1% Price Reduction
*** % Improvement (Decrease) Required To Maintain CM $ Facing a 1% Price Reduction

How to Analyze the ‘Pre-Tax Income: Year Plan vs. Actual (or Actual + SRO)’ Chart

This chart tells you what your expected Net Income will be (if you have not completed all four quarters)
or is (if you have completed all four quarters), and what the differences are between the plan and the actual.
Key words to use when analyzing this chart are whether an item is favorable or unfavorable to plan.

In this example, the Planned Net Income – your expected Net Income when you set your original plan
– on a pre-tax basis – was $765k. With a 50% tax rate, your planned after-tax Net Income was about $382k,

which is within the owner’s range of $300k to $400k. Remember that this chart will always show you the pre-tax amount,
so you need to multiply by 50% to get

the post-tax amount.

Because the title of the chart says ‘Actual’ instead of ‘Actual + SRO’, we know that all four quarters have passed, and
these are the final results of the year. Here, our actual Pre-Tax Net Income is $778k. With the 50% tax rate, our actual

after-tax net income is about $389k. We can see this actual number on the Income Statement.

The net difference between the pre-tax net income plan and actual is $12.5k. After tax, that’s $6.25k, which
means the estimate was very close to plan. However, when we break down the categories of variances, we see

some big differences. Green means there was a ‘favorable’ variance to plan (which added to net income),
and red means there was an ‘unfavorable’ variance (which took away from net income).

The first category is ‘Growth’ and the second category is ‘Market Share’. They are related. ‘Growth’ asks, if
you hit your planned market share, what did the total market demand do? In this case, the total market demand grew
more than the plan anticipated, so there was ‘upside’ of over $1mm in pre-tax net income added over the planned NI.

In your explanation in the QBR, you must identify *why* there is a favorable variance based on your analysis.
For example, you might say ‘Growth shows a favorable variance due to the launching of Project 3, which was not

accounted for in the Plan. Total Market Demand grew X% over plan in Q3 due to the launch of the Project.’

‘Market Share’ asks, if Total Market Demand (‘Growth’) was what you expected, how well did you estimate your
Market Share? In this case, we overestimated our market share, so there was $928k less net income than expected

because of that. In your explanation in the QBR, you must identify *why* there is an unfavorable variance
based on your analysis. For example, ‘Market Share is showing an unfavorable variance due to a decrease in Marketing Expense

of $X (Y%), which was necessary due to cash constraints.’

When you net ‘Growth’ and ‘Market Share’, you see that the under-estimation of
Total Market Demand and the over-estimation of the market share result in an addition to pre-tax net income of about

$172k. The net will not always be positive. You must identify *why* there is an unfavorable variance in your explanation
based on your analysis. For example, ‘The net of the volume increase was favorable to Plan by $172k (Z% over Plan),

primarily driven by A, B, and C reasons.’

+ $172k

‘Price’ simply means that there was an increase in unit price over Plan some time during the year.
A price increase adds to Net Income over plan; in this case, there was an additional $616.6k

of pre-tax net income added to the plan estimate due to a price increase. Remember, increasing price
may have a negative effect on the number of units a company sells, so market share may be

negatively impacted due to a price increase. Your explanation should be similar to, ‘Price was increased over Plan by $X
(Y%), resulting in a favorable variance to Plan of $616.6k.’

‘VC(I)’ stands for ‘Variable Costs (Inflation)’. It refers to your estimate of the price you are paying for your raw materials and
labor. Usually, we want the variable costs to be less than, or on target with, the plan. In this example, the price of

the raw materials and labor was exactly as planned. If there had been a negotiation with the raw material supplier,
we would see a green bar in this category, meaning that we had a favorable variance to plan by reducing our variable costs.

Assuming there was a favorable variance, your explanation should be similar to, ‘VC(I) generated a favorable variance to plan
due to negotiations with Mr. A, resulting in a decrease in cost of ABC of X%.’

‘VC(P)’ stands for ‘Variable Costs (Productivity)’. It refers to your estimate of how productive your employees were.
For Hisco, productivity is seen as ‘Processing Time’. Above, there is a red bar, which means that productivity was
unfavorable to Plan, which means we over-estimated the processing time in our Plan. It took longer to make our

readers than planned, which cost us $71k in pre-tax net income. In your explanation, you must identify *why* there is an
unfavorable variance based on your analysis. For example, ‘VC(P) was unfavorable to Plan by $Y (X%) due to the impact of XYZ.’

‘Base Cost’ is the sum of discretionary expenses. Because there are many costs that can contribute to this category,
we would need to do some investigation to find out what specifically caused this large unfavorable variance. In some cases,

there is good reason for this difference, such as funding a project that was not originally planned for. Underestimating
Building Lease and Utilities is a common reason for a large negative variance here. Overall, it means we spent more

in Base Costs than the Year Plan called for. Your explanation should include specific details about which costs impacted the
results, and why. For example, ‘Base Cost shows an unfavorable variance to plan, primarily driven by investment in Project 1

of $X, which was not in the Plan, and additional spending of $Y in Engineering Quality, to improve reader quality.’

‘Interest’ is simply how much interest on our debt we planned on vs how much interest we actually paid.
Here, we have a favorable $2.8k, which means we spent less on interest than planned, which means we took on less
debt than the original planned estimated. This favorable variance added $2.8k – pre-tax – to our net income plan.

Your explanation should include details about the variance. For example, ‘Interest was favorable to plan by $2.8k (X%),
due to less debt being used than Plan.’

In the QBR, you are asked ‘Using the ‘Pre-tax NI Walk: Plan vs. Actual’ chart, explain the key drivers of the
variances that account for the difference in Plan to Actual.’ It is critical that you include data, numbers, and other
measures to give your reader an idea of scope, and to support your explanations. Use of the correct terminology
(favorable or unfavorable to plan) demonstrates comprehension of the impact of the drivers shown in the chart.

The difference between the ‘Actual’ and ‘Actual + SRO’ chart is that while the ‘Actual’ chart shows what has already
happened, the ‘Actual + SRO’ chart (above) shows you what has happened so far, plus what will happen if you

hit all future quarters EXACTLY as planned. Keep in mind that it is virtually impossible to come in exactly on target for all
future quarters. This chart will help you determine what to consider as you make your decisions for future quarters.

For example, if we are looking at the chart after Q2 decisions have been submitted, the ‘Actual + SRO’ includes Q1 Actuals,
Q2 Actuals, Q3 SRO, and Q4 SRO. You will be able to add the Net Income from the Income Statement for all four

quarters of the year and see that it ties to your after-tax Net Income. Here, on the Income Statement, we would see $310.5k.