Question 1.
The CEO of a company says we are going to grow sales by 10% next year for example, by entering a new market, providing a new service or product, and/or taking on a competitor’s market share.
1. What kinds questions should be asked by senior management (and let us say by you as department manager) about resources, before the budget worksheets are started?
2. Could a budget for next year require us to hire more employees, or rent facilities in another location, or buy a machine, some computers, or vehicles in order to achieve a 10% increase in sales?
3. Do you think that senior management waits and has to have all of the budget details figured out before committing the organization to grow 10%, or instead puts the goal there and tells the team to make it happen? Which is more likely to you and why?
Question 2
We are presented with some material on ethics and corporate responsibility in Chapter 1 of our text, and I’d like to spend some time discussing that, because when it comes to presenting the financial health of a company, ethics is a crucial topic.
In section 13 beginning on page 19, let’s look at the history of the Sarbanes-Oxley Act. As my biography in the syllabus mentions, I work for a financial services company. I also have many friends who work for various financial services companies, and I can’t tell you how many SOX initiatives we’ve seen over the years. If there is one thing regulatory requirements do, they spur the job market.
The authors of the textbook mention how a bank in the UK, as part of their SOX compliance implementation, placed the responsibility of financial governance onto the managers of the various cost centers. Now, just looking at this with a naked eye, I see a few dangers in that not all managers are financially savvy.
What are your thoughts?
Question 3
Quantitative and qualitative forecasting methods are approached differently, but have the same goal.
1. How do you see that these methods are different?
2. Do you think qualitative or quantitative forecasting methods are more accurate than the other in all situations? Please explain.
Question 4
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How about we take a look at the simplest forecasting technique, Naive Forecast? Now with this one, you’re basically taking the actual data of the last period assessed, and using that number to predict the future period. So if last month’s sales figures were 2 million, your forecast for the current month or the next would be 2 million as well. There can be a catch 22 with this one, because it doesn’t really consider any significant history, which can cause you to overshoot or undershoot your estimates by a good deal. Any thoughts? |
