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A Clean, Well Lighted Place By Ernest Hemingway - 1950 Words

Humanity is the most egocentric species on the planet. Despite being relatively young and inexperienced, humans believe themselves to be far superior to everything they come into contact with. This egocentrism can easily be seen in a study performed by the World Wildlife Federation (WWF) in 2015. The study revealed that, â€Å"Some 46-58 thousand square miles of forest are lost each year—equivalent to 48 football fields every minute† (Cesareo). Billions of creatures are losing their homes to feed the human belief of their larger purpose in life. However, what humanity does not realize is that it has no great purpose. In fact, everything humanity values in life is utterly meaningless. The author Ernest Hemingway is one of the few people who understands this concept of a pointless life. In his short story, â€Å"A Clean, Well-Lighted Place,† Hemingway reveals the principle of existentialism, that life is inherently meaningless and people must attempt to give their own lives purpose, through an analysis of the inner workings of life as a human. Hemingway first reveals life’s meaningless nature through a description of the core aspects that define humanity. Although there are many complex ways to classify one human being from another, most people can be distributed by three simple traits: who they are, what they think, and what they do. Supposedly, these are the traits that make people unique, and allow them to create their own meaningful story. However, Hemingway contrasts this viewShow MoreRelatedA Clean Well-Lighted Place, by Ernest Hemingway990 Words   |  4 Pages Ernest Hemingway’s short story, A Clean Well Lighted Place, created literary controversy when it was initially published in 1933. During this time, there were several literary critics concerned with the dialogue inconsistencies. In the original story, the reader would not be able to distinguish between the two waiters. Hemingway failure to identify the c haracters by name leaves the story flawed according to the literary critics. Hemingway does not go into the mind of any characters butRead MoreA Clean, Well Lighted Place By Ernest Hemingway1640 Words   |  7 Pages â€Å"A Clean, Well-Lighted Place† is possibly one of Hemingway’s most excellent short stories. It depicts the techniques of his signature writing style. The narrative is a perfect example of an initiation story, a short story that focuses on the key character that comes across a concept, encounter, practice or knowledge he never knew. The characters in his story are the old man, young waiter, and the old waiter. Hemingway employs a number of literary tools in the story to convey his themes of lifeRead MoreA Clean, Well Lighted Place By Ernest Hemingway1034 Words   |  5 PagesErnest Hemingway developed his own style of writing and follows it in â€Å"A Clean, Well-Lighted Place†. Hemingway’s elegance in writing is such that he indirectl y gives all of the information to the reader without making any judgment; thus allowing one to create an opinion about every minute detail of the story. Hemingway illustrates his foundations of writing in â€Å"A Clean, Well-Lighted Place† by providing small clues that provide an indirect view of the larger meaning. Hemingway illustrates one ofRead MoreA Clean, Well Lighted Place By Ernest Hemingway1628 Words   |  7 PagesIn Ernest Hemingway’s â€Å"A Clean, Well-Lighted Place† the use of plot, symbolism, characters, and theme creates an intricate and complex story line. The elements of plot keep the readers engaged by guiding the reader though the story. Hemingway emphasizes on despair, loneliness, and isolation as major themes in his short story to help the reader understand the main idea. The themes represent the challenge of finding meaning in life. He also challenges the reader’s understanding of compassion thoughRead MoreA Clean, Well Lighted Place By Ernest Hemingway1024 Words   |  5 PagesWhen profound emotions and heartfelt experiences lay beneath a narrative subtext, a simple short story can become an elaborate puzzle where one continues to discover new pieces. Ernest Hemingway’s, â€Å"A Clean, Well-Lighted Place† is a fascinating short story that has a powerful theme of ‘nothingness’ and ‘loneliness’ enveloped beneath its dialogue. This short story’s re-readability pulls us, the reader, back into its’ text just to discover that a specific character’s dialogue could elude to yet anotherRead MoreA Clean, Well Lighted Place By Ernest Hemingway1854 Words   |  8 PagesErnest Hemingway is a noble prize winner that is noticed as one of the great American twentieth century writers, and is known for works like â€Å"The Sun Also Rises† and â€Å"For Whom the Bell Tolls†. When first reading Ernest Hemingway’s short story â€Å"A Clean, Well-Lighted Place† it seemed to be a plain, emotionless, and almost not finished short story. Although, as the reader looks deeper into the short story, they realize it’s not just about a clean, quiet, well lighted cafà © that has two employees thatRead MoreA Clean, Well Lighted Place By Ernest Hemingway972 Words   |  4 Pagesin a Clean, Well-Lighted Place Despair is an emotion that can rob one’s joy, inner peace, and eventually, life. The desire for serenity is usually sought after by a person whose life is futile and is at his or her wit’s end. That individual is usually left with no other alternative but to come to the realization that if he or she fails at his or her attempts (such as suicide) to alleviate despair, then the opportunity of finding peace and comfort is an alternative worth pursuing. In Ernest Hemingway’sRead MoreA Clean, Well Lighted Place By Ernest Hemingway849 Words   |  4 Pagesin life, and try to make rational existing in an irrational universe. The fact that humans are conscious of their mortality, and must make decisions about their life is basically what existentialism is all about. In the story â€Å"A clean, Well-lighted place† by Ernest Hemingway was about two waiters waiting to close up the restaurant/cafà © for the night. They only had one customer left, an old man who wa s deaf and drunk. But he wasn’t causing any trouble, just keeping to himself. The two waiters apparentlyRead More Nothingness in A Clean Well-Lighted Place by Ernest Hemingway1369 Words   |  6 PagesNothingness in A Clean Well-Lighted Place by Ernest Hemingway Man is often plagued by the question of his own existence. Existentialism is a subjective philosophy that is centered upon the examination of man’s existence, emphasizing the liberation, responsibility, and usually the solitude of the individual. It focuses on individuals finding a reason for living within themselves. The philosophy forces man to make choices for himself, on the premise that nothing is preordained, there is no fateRead MoreA Clean, Well-Lighted Place, by Ernest Hemingway Essay examples1296 Words   |  6 Pagesmeans by which we arrive at that goal. For Ernest Hemingway, the characters that he places in his stories are forever searching for peace. Much like in life itself, the achievement of temporary peace throughout the path of a lifetime can be both minute and momentous. The writer uses the literary devices of indirect characterization, setting and symbolism in order to enhance his final classification of peace. In Hemingways A Clean Well-Lighted Place, the author uses literary devices to define

Ford Motor Company Case Study Free Essays

————————————————- ————————————————- Ford Motor Company Case Report ————————————————- Executive Summary Ford Motor Company has a long history, starting in Michigan in 1903. They have focused on designing and manufacturing and have been very successful, however with increasing competition, global markets and over-capacity the company needs to look at ways to improve profitability. The company has implemented various programs and processes to create a lean, responsive system with better consumer forecasting. We will write a custom essay sample on Ford Motor Company Case Study or any similar topic only for you Order Now Their challenge is to continue to research ways to stay viable in current market and industry conditions. Dell Computers has been very successful with a direct model and virtual integration that may or not work well for Ford. CONTENTS * ISSUE3 * ANALYSIS4 * ALTERNATIVES6 * RECOMMENDATIONS 7 * IMPLEMENTATION 8 * CONCLUSION8 * REFERENCES9 * ISSUE: The Ford Motor Company is facing a number of challenges including the direction of CEO Jac Nasser to focus on customer responsiveness and shareholder value to deal with increasing competitiveness, an industry with potential over-capacity and the expansion into globalized markets. Ford had begun to implement systems to reduce cycle-time, improve quality and to lower costs. Programs included consolidating product development into five Vehicle Centres (VCs), reeingineered processes such as Order to Delivery (OTD), Fort Production System (FPS) and Business to Business (B2B) capacity. Additionally, information flow was examined to overcome geographical constraints, thus becoming a critical component of Ford’s global approach. During the past decade the company has implemented many programs and processes becoming the most improved automaker with steady upward trending sales and record profit sharing. The supply chain initially had a base of many competitive suppliers until the 1990’s when they began to move toward fewer, long term supplier relationships. Ford fostered relationships with tier one suppliers who would interface with tier two and other suppliers. With Ford’s support, the suppliers tried a variety of strategies including Just-In-Time (JIT) inventory, Total Quality Management (TQM) and Statistical Process Control (SPC). A limitation emerged in the variance of IT expertise and capability among the supply chain members. To reach the goal of reduced cycle time, creating a lean and flexible process, Ford is researching Dell Computer’s successful direct model to see if this virtual integration system would work for them. The direct model reduces the time and costs of third party distribution through direct interfacing with as few partners as possible as a way to improve production and customer responsiveness. The challenge is to determine if this system will work for Ford Motor Company. * ANALYSIS: The CEO’s directive is complicated by various factors. While Dell’s direct model works for Dell, it may or may not be effective with Ford. The company has been through a decade of change and adjustments to various processes and directions and while the option is available, a decision is not urgent as Ford is in a fairly good position. Dell’s direct model involves a customer focus, small numbers of supplier partnerships, customization, a just-in-time inventory and manufacturing. In order to do this, Dell ties in technology to communicate and coordinate these goals and strategies. They use what they call vertical integration. This means that they work very closely with customers and suppliers including actually having staff on site working directly with customers and partners, sharing information and knowledge to enable flexibility and effectiveness reducing cycle times. Dell establishes partnerships or collaborations with their customers and suppliers which is much like controlled outsourcing. Michael Dell of Dell computers argues that outsourcing is traditionally a way to â€Å"get rid of a problem†. His direct model, in contrast, is partnering with companies who are treated as though they are internal staff. This model improves the level of information sharing and motivation to succeed as a team. Technology means that the information sharing can be easily and effectively done in a win-win type of arrangement. The challenge is to maintain these relationships and focus on the task at hand. Providing suppliers with real-time information and up to date demand enables the supplier to act accordingly to meet Dell’s requirements. Removing multiple layers and working closely with customers and suppliers removes the possibility of misinformation, reaction time and ability to not only react, but to make more accurate forecasts. Dell has been able to streamline their customer response times by helping the customer ‘decide’ what they need. They make it easier for the customer to make the decisions and are ultimately preparing for it while the conversation is happening. Dell acts as a consultant and trainer getting direct feedback and key information for planning, research and development. They include key people from a wide range of responsibilities in regular meetings to ensure communication, ideas and overall commitment from the entire supply chain. Virtual integration goes even further to merge the traditional roles and boundaries of the supply chain. Dell argues that the direct model and virtual integration is beneficial to the customer from distribution to manufacturing and design. This model works for Dell, but whether it would work for Ford is the question. Ford has already reduced it’s supply chain base by dealing with Tier one suppliers to use Just-In-Time inventory processes and other strategies to improve commitment and capability. They implemented the Ford Production System (FPS), focusing on key parts of the manufacturing process to improve efficiency. The Synchronous Material Flow (SMF) was developed to ensure a continuous flow of materials. This was done by using lean manufacturing concepts, careful scheduling and sequenced assembly. Their Order to Delivery (OTD) process was also developed to streamline the cycle time, reducing the order to delivery from 65 days to as little as 15 days. In order to do this they used forecasting, keeping 15 days of vehicles in the assembly plant’s order bank, using regional mixing centers for deliveries and a responsive order amendment process. Last but not least they worked on something called the Ford Retail Network (FRN) to test best practices and to create an alternate distribution channel. The idea was to consolidate Ford’s efforts to compete against the competition of other auto makers rather than compete against each other. Because Dell and Ford are such different companies it is difficult to know if vertical integration would work. Dell is a smaller company whose current success is due to customer focus, pull demand, speed of response and virtual integration. In contrast, Ford is a much larger company with a complex and long-standing system of supply chain leadership where purchasing was historically heavily involved in the various activities of the company. A move to virtual integration requires that roles shift and responsibilities change to allow greater collaboration and information sharing. ALTERNATIVES: Differences between the companies include dealer networks, product and process complexity, age and size of the company, technical expertise and control over systems. Ford has a great amount of control, difficulty forecasting customer needs, higher product complexity, a strong dealer network and unionized labour. Dell is relatively new, there is high technical expertise, the product is not as complex, forecasting can be fairly accurate and their supplier relationships are good. Ford enjoys a significant amount of control over their supply chain, manufacturing, assembly and distribution, while Dell may not be able to exercise control depending on the relationships built and arrangements made. At this time, Ford does not really need to make a decision to change their business model, but there is a push for greater globalization, efficiency and flexibility. They can move toward virtual integration, stay the same, or adopt some kind of balance of the direct model with their current model. Because of their size and established supply chain, a move toward vertical integration and a direct model would mean fairly drastic changes and giving up controls that have been carefully developed over the past decade. That said, staying the same would not be advisable, as the market is increasingly competitive on the local and global stage. Ford will be required to look at further adaptations to their operations in order to stay competitive. RECOMMENDATION: It would be advisable for Ford to examine vertical integration in at least some areas of their operations. Because this requires high levels of technology, they can work with Tier one suppliers to develop collaborations and more extensive information sharing. Doing nothing is not usually a feasible option in successful business and full integration would be very difficult to accomplish and my not have the results that Dell has due to the various differences in the companies and their products. IMPLEMENTATION: Ford can use focus groups and regular meetings to move toward a direct model in at least some areas of the business. The dealer network may be used as an advantage to forecasting if they work more closely with the development teams, manufacturing and assembly plants. The customer focus groups can begin to develop relationships that help to develop what customers want and might have as potions can be insightful and will improve forecasting. Purchasing, engineering, marketing and other groups can get involved in these focus groups, which may also encourage dialogue and collaboration toward cohesive end results. * CONCLUSION: Ford has implemented many strategies successfully and has been forward thinking in their consideration of various models and options. Becoming faster may or may not work to their advantage as buying a car is a decision that is weighed carefully and is a bigger investment than choosing a computer or laptop. The speed at which the company supplies a vehicle once ordered is important, but I suggest, not as important as the customer getting the options, financing and service that they expect with this type of purchase. That said, customers expect greater customization and choice than ever before. Whether Ford takes on this model or chooses to research another model is a step in the right direction. Supply chain management is a large part of how well the company can respond to customer needs and ultimately create profit and ongoing competitive advantage. * REFERENCES: Austin, Robert D. , Ford Motor Company: Supply Chain Strategy, 9-699-198, Harvard Business School Publishing, 1999. Magretta, Joan (2001) â€Å"The Power of Virtual Integration: An Interview with Michael Dell,† Harvard Business Review How to cite Ford Motor Company Case Study, Free Case study samples

Business Plan of Frozen Pizza Plc

Question: Discuss about the Business Plan of Frozen Pizza Plc. Answer: Introduction The fast food business is flourishing at a rapid pace all around the world and the demand in this business has been observed to be increasing constantly. In the United States, the expenditure of the consumers on the fast food has increased dramatically in the recent years (Jekanowski, Binkley, Eales, 2001). In the year 2013, the revenues generated by the fast food industry were $196.10 Billion, which went up to $273 billion in the year 2015. This depicts that the size of the fast food industry is increasing fast and it is expected to become a Large Cap Industry in the United States very soon. Looking at the increased size of the industry and the rapidly increasing demand, it has been considered appropriate to set up a fast food restaurant in the New York City of the United States. In this context, this report has been prepared to present the budgeted figures about the new start up and evaluate its financial viability. Overview of the Business: Mission, Vision, and Strategies In the present report, a company namely Frozen Pizza Plc has been taken for analysis, which is a newly incorporated company engaged in the fast food industry. The company is considering opening a restaurant in the New York City of the United States with two products such as pizza and burger initially. The demand of fast food is growing up at a speedy rate, which makes sense for the company to enter into this business (Statista, 2016). The company is inclined to achieve high growth in a short span of time, for which the vision statement has been drawn out as, To become the best fast food brand in the world by providing the highest quality services (Papulova, 2014). Further, in order to achieve the vision, the management has formulated the mission statement as, To culminate an environment of enthusiasm and support among the employees and motivate them to deliver value to the business continually. Moreover, the strategies of the company are aligned with the mission and vision statement properly so as to achieve the set goals within the prefixed time period. In order to align the organizational strategies with the mission and vision, the balance score card approach has been considered to be appropriate (Darbi, 2012). The balanced score card provides four perspectives to view the entity as a whole. Those four perspectives are financial perspective, customer perspective, business process perspective, and learning growth perspective. The four perspectives of the balanced score card cover the entity from end to end (Poureisa, Ahmadgourabi, Efteghar, 2013). The pictorial representations of the balanced score card is given below: Figure 1: Balanced Score Card The Financial perspective provides that the management should collect the necessary data and information to measure the financial performance of the business. Similarly, the customer perspective emphasizes on the need to maintain and collect the data to measure the customer satisfaction. The business perspective talks about evaluating and analyzing the internal processes and controls so to enhance the efficacy of the staff. The learning and growth perspective is the most crucial because it focuses on the vision of the organization. As per this perspective, the management should be keen to learn and find out the new ways to growth continually and achieve the objectives of the business (Poureisa, Ahmadgourabi, Efteghar, 2013). Further, the management of the Triple Bottom Line initiatives has become obligatory for all the organizations to achieve the business objectives and goals. The Triple Bottom Line accounting framework is divided into three parts such as social, environmental, and financial (Jackson, Boswell, Davis, 2011). The management of the company is required to take initiatives to maintain a proper balance between the social, environmental, and financial goals. This implies that an organization having financial performance outstandingly well, but negligent in meeting the social and environmental needs adequately may not be able to achieve its vision. Therefore, in order to be able to reach to the vision, a proper balance between the social, environmental, and financial needs is to be maintained (Fauzi, Svensson, Rahman, 2010). Budgetary Analysis The budgeting is a process of estimating the amount of income and expenditure that the business is going to earn and incur over a specified period of time (Carreras, Mujtaba, Cavico, 2011). The estimation and projection of the income and expenditure is important to put controls and evaluate the performance. The budgeted figures of income and expenditures are compared against the actual income and expenditure figures to find out the variances and evaluate the performance (Mohamed, Evans, Tirimba, 2015). With this aim, various budgets and projections regarding income and expenditures have been prepared in respect of Frozen Pizza Plc. The Major budgets that have been prepared here involve sales budget, direct material budget, direct labor budget, overhead budget, selling expense budget, and administration expense budget. Sales Budget for Two Products The sale budget of Frozen Pizza Plc for the year 2016 has been prepared for two primary products such as pizza and burger, the same is presented below: Sales Budget 2016 2017 2018 Total 1.) Pizza A. Demand Units 51,100 52,122 54,728 157,950 B. Price $10.00 $10.80 $12.03 C. Total (A*B) $511,000.00 $562,917.60 $658,379 1,732,297 2.) Burger A. Demand Units 3285 3,449 6,899 13,633 B. Price $5.00 $5.00 $5.50 C. Total (A*B) $16,425 $17,246 $37,942 71,613 Grand Total (1+2) $527,425 $580,164 $696,321 1,803,910 The demand is high but, since, the size of restaurant is small, therefore, it is assumed that 20 customers will be served each day and that the restaurant will operate for 365 days. Further, it is assumed that 70% of the total customers served will be consuming pizza because people like pizza more and the rest 30% will consume burger. It is also assumed that the customer consuming pizza consumes on an average one pizza, while, the customer consuming burger takes 1.5 burgers on an average because of its small size. Based on these assumptions, the demand for the year 2016 in respect of pizza and burger, works out to be 51100 and 3285 units respectively. Further, in respect of pizza, the demand for the year 2017 and 2018 has been assumed to be increasing by 2% and 5% respectively. In respect of burger, the demand has been assumed to be increasing more rapidly at rate of 5% and 100% due to low prices. Direct Materials Budget After estimating the demand, it becomes necessary to prepare projections regarding inventory levels and production required. Based on the production requirements, the raw material requirement budget is prepared, which is crucial for planning and controlling the expenditure on material consumption (Weerawardena Mort, 2006). The material budget for Frozen Pizza Plc covering major items is presented below: Direct Materials Budget: For Pizza 2016 2017 2018 Per Pizza Qty Cost per Kg/Gram ($) Cost per Pizza ($) Cost per Kg/Gram ($) Cost per Pizza ($) Cost per Kg/Gram ($) Cost per Pizza ($) Baker's yeast (KG) 0.80 1.00 0.80 1.05 0.84 1.10 0.88 Sifted flour (KG) 0.60 1.00 0.60 1.05 0.63 1.10 0.66 Cheese (Grams) 15.00 0.05 0.75 0.05 0.79 0.06 0.83 Sauce (Grams) 15.00 0.05 0.75 0.05 0.79 0.06 0.83 Tomato, onion, others (KG) 0.50 1.00 0.50 1.05 0.53 1.10 0.55 Total 3.40 3.57 3.75 Total Sale Units 51,100.00 52,122.00 54,728.10 Total Cost of Raw Material ($) 173,740.00 ` 205,148.28 Note: It is assumed that the consumption per unit of raw material will remain the same. Direct Materials Budget: For Burger 2016 2017 2018 Per Pizza Qty Cost per Kg/Gram ($) Cost per Pizza ($) Cost per Kg/Gram ($) Cost per Pizza ($) Cost per Kg/Gram ($) Cost per Pizza ($) Baker's yeast (KG) 0.48 1.00 0.48 1.05 0.50 1.10 0.53 Sifted flour (KG) 0.30 1.00 0.30 1.05 0.32 1.10 0.33 Cheese (Grams) 7.50 0.05 0.38 0.05 0.39 0.06 0.41 Sauce (Grams) 7.50 0.05 0.38 0.05 0.39 0.06 0.41 Tomato, onion, others (KG) 0.25 $1.00 $0.25 $1.05 $0.26 $1.10 0.275625 Total $1.78 $1.87 $1.96 Total Sale Units 3,285.00 3,449.25 6,898.50 Total Cost of Raw Material ($) $5,847.30 ` $13,537.96 The quantities of the raw material have been taken based on the specifications of the production department and the rates have taken based on the prices prevailing in the market (Traditional Oven, 2016). Further, it has been specified by the production technical department that the consumption of raw material for a burger will be half of what is consumed for a pizza. Based on these assumptions, the cost per unit of pizza and burger has been worked out as $3.40 and $1.78. Direct Labor Budget Direct Labor Budget: For Pizza 2016 2017 2018 Per Pizza Hours Cost per Hour ($) Cost per Pizza ($) Per Pizza Hours Cost per Hour ($) Cost per Pizza ($) Per Pizza Hours Cost per Hour ($) Cost per Pizza ($) Skilled Labor 0.25 10.00 2.50 0.23 10.50 2.36 0.20 11.03 2.23 Unskilled Labor 0.10 8.00 0.80 0.08 8.40 0.67 0.06 8.82 0.56 Total 3.30 3.03 2.80 Total Sale Units 51,100.00 52,122.00 54,728.10 Total Cost of labor ($) 168,630.00 158,164.21 153,076.82 Note: 1. The cost per hour assumed to be escalating @5% per year from 2017 onwards 2.) Further, it is assumed that due to learning, the labor hours will be reduced by 10% and 20% per year in case of skilled and unskilled labor respectively. Direct Labor Budget: For Burger 2016 2017 2018 Skilled Labor Per Burger Hours Cost per Hour ($) Cost per Pizza ($) Per Burger Hours Cost per Hour ($) Cost per Pizza ($) Per Burger Hours Cost per Hour ($) Cost per Pizza ($) Unskilled Labor 0.08 10.00 0.75 0.07 10.50 0.71 0.06 11.03 0.67 Total 0.06 8.00 0.48 0.05 8.40 0.40 0.04 8.82 0.34 1.23 1.11 1.01 Total Sale Units 3,285.00 3,449.25 6,898.50 Total Cost of labor ($) 4,040.55 3,835.39 6,956.84 1. The cost per hour assumed to be escalating @5% per year from 2017 onwards 2.) Further, it is assumed that due to learning, the labor hours will be reduced by 10% and 20% per year in case of skilled and unskilled labor respectively. In the production of pizza and burger, two types of labor such as skilled and unskilled will be deployed. The skilled labor comprises of professional chef and unskilled labor comprises of other staff engaged directly in production activities. Since, professional chef are hired at higher wage rate, therefore, the wage rate for them is kept higher than the unskilled staff. Total labor budget for the year 2016 is kept at $172,670.55 comprising $168,630 for skilled and $4,040.55 for unskilled staff. Overhead Budget The overhead budget is bifurcated into two parts such as variable and fixed. Further, the overheads have also been segregated based on the nature such as manufacturing, Selling, and administrating. The budget is shown as under: Overhead Budget 2016 2017 2018 Pizza Burger Total Pizza Burger Total Pizza Burger Total Variable Manufacturing @5% of price $0.50 $0.25 $0.54 $0.25 $0.60 $0.28 Selling @5% of price $0.50 $0.25 $0.54 $0.25 $0.60 $0.28 Total Per unit $1.00 $0.50 $1.08 $0.50 $1.20 $0.55 Sale Units 51,100.00 3,285.00 52,122.00 3,449.25 54,728.10 6,898.50 Total (Sale units* per unit) $51,100.0 $1,642.5 $52,742.5 $56,291.8 $1,724.6 $58,016.4 $65,837.9 $3,794.2 $69,632.1 Fixed Manufacturing (Dep) 25,055.93 1,610.74 26,666.67 25,011.49 1,655.17 26,666.67 23,681.59 2,985.07 26,666.67 Selling (Adv) 2,114.09 135.91 2,250.00 2,532.41 167.59 2,700.00 2,532.41 167.59 2,700.00 Administration (Int+salary) 42,281.88 2,718.12 45,000.00 45,020.69 2,979.31 48,000.00 46,179.10 5,820.90 52,000.00 Total 69,451.90 4,464.77 73,916.67 72,564.60 4,802.07 77,366.67 72,393.11 8,973.56 81,366.67 The manufacturing and selling variable overheads have been assumed to be 5% of the selling price of pizza and burger. As per the industry practices, the variable cost in fast food service industry ranges between 70%-75% of sales. Further, the direct wages and direct material together amount to 65%-70% of the sales, therefore, the variable overheads have been assumed to be 5% of the sales. On the other hand, the fixed overheads have been computed taking the major items such as depreciation, advertisement, interest, salary, and other administrative expenses. The depreciation has been computed by applying straight line method on the cost of fixed costs (Noreen Soderstrom, 1994). Selling Expenses Budget The selling expense budget comprising the expenses to be incurred in marketing and distribution of the products for Frozen Pizza Plc is presented below: Selling expenses budget 2016 2017 2018 Pizza Burger Total Pizza Burger Total Pizza Burger Total Advertisement 2,114 136 2,250 2,532 168 2,700 2,532 168 2,700 In respect is sale of fast food, the major expense incurred in selling the products is on the promotional and advertisement activities. Since, there is no home delivery system in place in the initial year at the restaurant, therefore, the distribution expense have not been taken into account. Administration Expenses Budget The budget in respect of administration expenses has been presented below: Administration expenses budget 2016 2017 2018 Pizza Burger Total Pizza Burger Total Pizza Burger Total Accounting and Legal 4,698 302 5,000 938 62 1,000 - - - Utilities 4,698 302 5,000 14,069 931 15,000 15,985 2,015 18,000 Interest 5,638 362 6,000 6,566 434 7,000 7,993 1,007 9,000 Salary 9,396 604 10,000 25,011 1,655 26,667 23,682 2,985 26,667 Rent 11,275 725 12,000 11,255 745 12,000 10,657 1,343 12,000 Insurance 940 60 1,000 938 62 1,000 888 112 1,000 Maintenance Repairs 940 60 1,000 2,532 168 2,700 2,398 302 2,700 Other 4,698 302 5,000 938 62 1,000 888 112 1,000 Total 42,282 2,718 45,000 62,247 4,119 66,367 62,490 7,877 70,367 The total administrative expenses have been estimated to be $45,000 for the year 2016. The expenses have been allocated on pizza and burger in proportion to the number of units sold, which seems to be fair and justified allocation base in the prevailing circumstances (Noreen Soderstrom, 1994). CVP Analysis and Breakeven Point CVP analysis designates the analysis of the cost, volume, and profit with the goal to find out the impact of changes in one variable on the other, for example, analysis of the changes in the cost and volume on the profits. The CVP analysis is a crucial tool applied by the managers in decision making in various areas such pricing and deciding production mix (Hinterhuber, A, 2003). In order to apply the CVP analysis, the knowledge of contribution margin, breakeven point, and safety margin is important. In respect of the startup business of Frozen Pizza Plc, the relevant computations for CVP analysis have been performed as under: Weighted Average Contribution Margin and Ratios The following table shows the computation of the contribution margin for pizza and burger both the products. Further, the weighted average contribution margin has also been computing taking both the products together: Weighted Average Contribution Margin Products Pizza Burger Total A. Sales $511,000.00 $16,425 $527,425.00 B. Variable cost 393,470.00 $11,530.35 405,000.35 C. Contribution margin (A-B) 117,530.00 4,894.65 $122,424.65 D. Units sold 51,100.00 3,285.00 54,385.00 E. Contribution margin Ratio (C/A) 23.00% 29.80% F. Contribution margin per unit (C/D) 2.30 1.49 G. Weighted average contribution margin (C/A) 23.21% H. Weighted average contribution margin per unit (C/D) 2.25 The contribution margin in respect of pizza and burger has been computed as 23% and 29.80%. The contribution margins are low because of higher variable cost during the initial years of operations. The weighted average contribution margin is worked as 23.21%, which represents the overall company. This implies that on a sale of $100, the company earns $23.21 before deducting the fixed expenses (Hinterhuber, A, 2003). Breakeven Point Analysis The breakeven analysis is crucial for the new business to estimate the required sales volume at which the company will recover entire cost and start making profits. In respect of Frozen Pizza Plc, the breakeven analysis has been presented in the table given below: Breakeven Point Products Pizza Burger Total A. Fixed Cost 69,451.90 4,464.77 73,916.67 B. Contribution margin Ratio 23.00% 29.80% 23.21% C. Contribution margin per unit 2.30 1.49 2.25 D. Sales volume in units (A/C) 30,196.48 2,996.49 32,836.18 E. Sales volume in $ (A/B) $301,964.79 $14,982.43 $318,444.84 The breakeven point in terms of number of units has been worked out as 30196.48 and 2996.49 for pizza and burger respectively. This implies that Frozen Pizza Plc will have to sale out at 30197 units of pizza and 2997 units of burgers to recover the entire cost incurred in the production. Once the sale is reached to this sales level, the company will start making profits from every unit sold beyond this level. The breakeven point has also been computed in money terms to know the amount of sale to be achieved to recover all the costs. The breakeven sale in respect of pizza and burger is worked as $301,964.79 and $14,982.43, while the total budgeted sale is $511,000 and $16,425. This depicts that the company will reach to the breakeven point in a time period lesser than one year (Alnasser, Shaban, Al-Zubi, 2014). Operating Leverage Operating leverage is measured with a view to gain an insight into the companys ability to convert the revenues into profits. The degree of operating leverage signifies the ability of the company to convert the revenues into profits (Alaghi, 2011). In respect of Frozen Pizza Plc, the operating leverage has been computed as below: Operating Leverage A. Contribution $122,424.65 B. EBIT 107,250.48 C. Operating leverage (A/B) 1.14 The degree of operating leverage as depicted in the table above is 1.14, which is very low. This implies that if the revenues of the company increases by 10%, then the EBIT will increase by 11.40%. However, low degree of operating leverage indicates that the fixed costs are not too heavy and thus, the business will reach to the breakeven point quickly. Therefore, it could be articulated that though the profits will increase at slower pace but the risk of loss will be negligible with a low degree of operating leverage (Alaghi, 2011). Safety Margin Margin of safety indicates the sales over and above the breakeven level. Since, the margin of safety sales is generated after the breakeven point is achieved, which means that all the costs have been recorded, thus, it contributes directly to the profit of the company. Higher the margin of safety, higher will be the profit making capacity of the business and the risk of loss will automatically be lower (Taghizadeh Zeinalzadeh, 2011). In respect of Frozen Pizza Plc, the margin of safety computation is shown below: Safety Margin Products Pizza Burger Total A. Budgeted Sales $511,000.00 $16,425 $527,425.00 B. Breakeven Sales $301,964.79 14,982.43 318,444.84 C. Safety Margin ($) (A-B) $209,035.21 1,442.57 208,980.16 D. Safety Margin (%) (C/A) 41% 9% 40% From the data presented in the table given above, it can be observed that the margin of safety of Pizza is higher than that of burger. Therefore, it could be inferred that, initially, producing pizza is less risky than burger for Frozen Pizza Plc (Taghizadeh Zeinalzadeh, 2011). Income Statement The income statement is prepared to forecast the profit that the business is expected to generate over the period time (Whited, 2010). In respect of Frozen Pizza Plc, the income statement presenting the revenues, cost of goods sold, gross profit, operating expenditure, and net profit for three years has been shown below: Frozen Pizza Plc Profit Loss Statement Amount ($) 2016 2017 2018 Sales $527,425 $580,164 $696,321 Other income $52,743 $58,016 $69,632 Cost of Sales $405,000 $425,250 $467,775 Gross Profit $175,167 $212,930 $298,177 Operating Expenses Accounting and Legal $5,000 $1,000 $0 Salary $10,000 $15,000 $18,000 Utilities $5,000 $7,000 $9,000 Depreciation $26,667 $26,667 $26,667 Rent $12,000 $12,000 $12,000 Insurance $1,000 $1,000 $1,000 Marketing $2,250 $2,700 $2,700 Maintenance Repairs $1,000 $1,000 $1,000 Interest $6,000 $6,000 $6,000 Other $5,000 $5,000 $5,000 Total Operating Expenses $73,917 $77,367 $81,367 Net Profit BT $101,250 $135,563 $216,811 Less: Tax @ 30% $30,375 $40,669 $65,043 Net Profit AT $70,875 $94,894 $151,768 The revenues shown above in the income statement have been assumed to be grown at the rate of 10% and 20% for the financial year 2017 and 2018. In respect of revenues, it is anticipated that the demand will increase from the second year and pick more pace from the third year of operations. Further, it has been anticipated that with the enhancement in the scale of operations, the company will take economies of scale and consequently, the cost goods sold will reduce. In relation to operating expenses such as salary, utilities, and marketing, it has been assumed that there will be proportional increase with the increase in the level of operations. However, the depreciation expense will remain the same due to high capacity of plant and equipment being purchased in the initially year. Further, it has also been assumed that the rent will be same due to the rent agreement being entered for three years in the year 2016 itself providing for rent at the same rate for all three years. Considering these all assumptions, the projections show that the net profit will increase at the study growth rate over the three year time period. Balance Sheet In order to project the position as regards assets, liabilities and equity, the balance sheet for three years comprising the period from 2016 to 2018 has been presented below (Whited, 2010): Frozen Pizza Plc Balance Sheet Amount ($) Assets 2016 2017 2018 Current $50,000 $60,000 $54,000 Fixed $400,000 $400,000 $400,000 Total Assets $450,000 $460,000 $454,000 Liabilities Current $50,000 $40,000 $20,000 Non-Current $100,000 $100,000 $100,000 Total Liabilities $150,000 $140,000 $120,000 Equity $300,000 $320,000 $334,000 Total Liabilities Equity $450,000 $460,000 $454,000 From the balance sheet presented above, it can be observed that the liabilities are reducing with the increase in the profits. Further, the impact of increase in the net profit could also be seen on the net worth of the company. It has been observed that the net worth of the company is increasing with a study growth rate as depicted in the graph below: Figure 2: Net Worth of Frozen Pizza Plc Critical Evaluation of the Business and Finding the Ways to Improve Future Performance Measurement of the performance is crucial for every business to attain a sustainable growth continuously and achieve the objectives by making required improvements. The financial performance of business is measured against the benchmarks such as net profit margins, return on equity, and growth in revenues (Ajelabi Tang, 2010). However, the other factors such as customer satisfaction and brand image of the company in the market can also be used for measurement of the performance. In order to survive in this stiffly competitive world, the organizations ought to endeavor for continuous improvements (Office of Performance Management USA, 1997). Although, the estimated figures shows that the profitably of the company is good but there is a scope to improve it further. For this purpose, the management of Frozen Pizza is first required to assess own strengths and weaknesses (Adepoju Famade, 2010). After this an analysis of the competitors operating in the neighborhood needs to be conducted to indentify the threats in the environment. In the fast food industry, the role of customer satisfaction is very crucial, therefore, the organizational goals and strategies of Frozen Pizza should be aligned with it. The service quality needs to be improved to gain more customers and increase the demand in the upcoming years (Adepoju Famade, 2010). The pricing policy that is yet to be suitably drawn is also one of the areas to be considered to improve the performance of the business (Faith Edwin, 2014). The management of Frozen Pizza will have work on revising the pricing policies of the company. As this is initial phase, due to which the company has set very low prices so that as many customers as possible could be attracted. However, as the business progresses and the company get the brand image recognized in the market, the prices need to be pushed up side. Therefore, it is expected that the increase in the prices of the products would increase the profits significantly in the upcoming years (Faith Edwin, 2014). However, it is to be kept in mind that the increase in the prices will be sustainable only when the quality of the services is very high (Faith Edwin, 2014). Therefore, the quality of services automatically becomes an improvement area for the management of Frozen Pizza. In order to improve the quality of the services, the management is first required to formulate adequate quality policy and then train the unskilled staff accordingly. The role of lower level employees is very critical in the restaurant services in delivering the quality services, thus, the lower level staff should be strictly trained about customer service. For this purpose, it is essential to keep the employees motivated and make them think like the owner of the business (Paryani, 2011). Further, it has been identified that the production mix plays a vital role in increasing the efficiency of the business; therefore, the management should constantly review the performance of the products and change the mix from time to time (Drury, 2005). In the current case, Frozen Pizza Plc is producing two products such as pizza and burger. The production of burger is kept very low due to lower prices and risk of low demand. However, the results of the cost volume profit analysis depicts that the profit volume ratio of burger (29.80%) is higher than that of pizza (23%). This implies that the burger is more profitable than pizza and hence, the company should produce burger as much as possible (Drury, 2005). Although, there exist a risk of low demand in respect of burger in the initial years, but as soon as the company establishes its brand image, the demand of burger may pick hike. Thus, the management should have close eyes on the shift in demand of burger and as the demand looks picking up, the production mix should be changed by increasing the share of burger in the total production. This diversion of the resources from pizza to burger will be beneficial for the company (Drury, 2005). However, in this regard, the management should remember that the production of burger is not increased that much that the main product Pizza gets completely lost because the brand image of the company is due to pizza only (Drury, 2005). Recommendation to the Potential Inventors From the perspective of the potential investors, it could be recommended that since the future prospects of the company are very high, so they should invest in the companys stock. The results of the projected income statement show that the company will pick up a quick growth in the profitably, which is also demonstrated in the graph given below: Figure 3: Profit of Frozen Pizza Plc From the graph, it could be observed that the profits of the company are increasing by more than 200% in the three year time period. This phenomenon could be considered very lucrative for the potential investors. Further, the results of the balance sheet analysis, indicates that the net worth of the company is also expected to increase with a high speed in the three years time period. Thus, it is highly recommended for the potential inventors to invest their money in the companys stock (Jagongo Mutswenj, 2014). References Adepoju, T.L. Famade, O.A. (2010). 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