psbm case study answers

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SUBJECTS

A B C

ACCOUNTING MANAGEMENT

AUDIT MANAGEMENT

ADVERTISING

ADVERTISING MANAGEMENT

AUTOMOBILE MANAGEMENT

ASSET MANAGEMENT

AVIATION MANAGEMENT

AGRICULTURE MANAGEMENT

ARCHITECTURAL MANAGEMENT

BANKING MANAGEMENT

BPO MANAGEMENT

BANKING & FINANCIAL SERVICES MANAGEMENT

BUSINESS MARKETING

BUSINESS ETHICS

BUSINESS COMMUNICATION

BUSINESS LOGISTICS

BIO TECHNOLOGY MANAGEMENT

CORPORATE LAW

CONSUMER BEHAVIOR

CORPORATE FINANCE

COST MANAGEMENT & ACCOUNTANCY

CORPORATE & FINANCE MANAGEMENT

CORPORATE GOVERANCE

COMMUNICATION MANAGEMENT

CLINICAL PHARMACOLGY

CLINICAL RESEARCH

AIR TRANSPORT MANAGEMENT

BUSINESS ADMINISTRATION

BUSINESS MANAGEMENT

BUSINESS ENVIRONMENT

BUSINESS PLANNING

BUSINESS STRATEGY

BOI-TECHNOLOGY MANAGEMENT

CUSTOMER RELATIONSHIP MANAGEMENT

CONSTRUCTION MANAGEMENT

CUSTOMER CARE MANAGEMENT

CALL CENTRE MANAGEMENT

CO – OPERATIVE MANAGEMENT

CONSUMER MANAGEMENT

CORPORATE FINANCE MANAGEMENT

CHARTERED FINANCE MANAGEMENT

D E F

DAIRY MANAGEMENT

DISTRIBUTION LOGISTIC MANAGEMENT

DATABASE MANAGEMENT

DEVELOPMENT STRATEGY

E-BUSINESS SYSTEM

E-COMMERCE

ENERGY MANAGEMENT

EQUITY RESEARCH MANAGEMENT

ENTREPRENEUR MANAGEMENT

EVENT MANAGEMENT

ENTREPRENEURSHIP MANAGEMENT

EXPORT IMPORT MANAGEMENT

EXPORT MANAGEMENT

FINANCE

FINACE MANAGEMENT

FINACIAL & COST ACCOUNTING

FINANCIAL ACCOUNTANCY

FINANCIAL INSTITUTIONS

FASHION MANAGEMENT

FOREIGN EXCHANGE MANAGEMENT

G H I

GENERAL MANAGEMENT

GLOBAL MARKETING MANAGEMENT

H R MANAGEMENT

HUMAN RESOURCE MANAGEMENT

HOSPITAL MANAGEMENT

HEALTHCARE MANAGEMENT

HOSPITALITY MANAGEMENT

HOTEL MANAGEMENT

HOLISTIC MANAGEMENT

HOSPITAL ADMINISTRATION

INTERNATIONAL FINACE

INTERNATIONAL FINACE MANAGEMENT

INTERNATIONAL HR MANAGEMENT

INTERNATIONAL BUSINESS

INFORMATION TECHNOLOGY

INDUSTRIAL MANAGEMENT

INVESTMENT MANAGEMENT

INVESTMENT ANALYSIS MANAGEMENT

HARDWARE MANAGEMENT INDUSTRIAL MARKETING

INDUSTRIAL RELATIONS

INFORMATION MANAGEMENT

INDUSTRIAL SAFETY MANAGEMENT

INTERNATIONAL BUSINESS MANAGEMENT

INVENTORY MANAGEMENT

INDUSTRIAL RELATION LABOUR LAW

IT FOR MANAGEMENT

INFRASTRUCTURE MANAGEMENT

INTELLECTUAL PROPERTY RIGHTS

INTERIOR MANAGEMENT

L M N

LOGISTICS

LOGISTIC MANAGEMENT

LOGISTIC ENGINEERING

MARKETING

MARKETING MANAGEMENT

MASS COMMUNICATION

MEDIA MANAGEMENT

MUTUAL FUND MANAGEMENT

MARKET RISK MANAGEMENT

MARKETING FINANCE MANAGEMENT

MATERIAL MANAGEMENT

MANAGEMENT INFORMATION SYSTEM

MANAGEMENT OF SALES FORCE

MANAGERIAL ECONOMICS

MANUFACTURING PLANNING & CONTROL

MASS COMMUNICATION MANAGEMENT

MERGERS & ACQUISITIONS

NETWORKING

NETWORK MANAGEMENT

NETWORKING MANAGEMENT


O P Q

OPERAIONS

OPERATIONS MANAGEMENT

ORGANIZATION BEHAVIOR

OPERATING SYSTEM

OPERATION RESEARCH

PRINCIPLE & PRACTICE OF MANAGEMENT

PERSONNEL MANAGEMENT

PROJECT MANAGEMENT

PRODUCTION & OPERTION MANAGEMENT

PROFFESSIONAL COMMUNICATION

PURCHASING MANAGEMENT

PETROLEUM MANAGEMENT

PORTPOLIO MANAGEMENT

PHARMACOLOGY MANAGEMENT

PUBLIC RELATIONSHIP MANAGEMENT

PUBLIC ADMINISTRATION

QUANTITATIVE METODS

QUATITATIVE TECHNIQUES IN MANAGEMENT

QUANTITATIVE MANAGEMENT

R S T

RESEARCH METHODOLOGY

RETAIL MANAGEMENT

RISK & SAFETY MANAGEMENT

RISK & INSURANCE MANAGEMENT

RURAL MANAGEMENT

SALES & DISTRIBUTION MANAGEMENT

SIX SIGMA MANAGEMENT

SIX SIGMA GREEN BELT MANAGEMENT

SIX SIGMA BLACK BELT MANAGEMENT

STATICAL QUALITY CONTROL

SUPPLY CHAIN MANAGEMENT

STORE MANAGEMENT

SOFTWARE PROJECT MANAGEMENT

TELECOM MANAGEMENT

TOTAL QUALITY MANAGEMENT

TREASURY MANAGEMENT

TOTAL SUPPLY MANAGEMENT

TRAVEL & TOURISM

TRAINING & DEVELOPING

TAKE OVER AQUISATION

TAXATION MANAGEMENT

TEXTILE MANAGEMENT

SHIPPING MANAGEMENT

SOFTWARE MANAGEMENT

SAP CONSUTANCY MANAGEMENT

SALES MANAGEMENT

Advanced Management Strategies

CASE – 1 MANAGING HINDUSTAN UNILEVER STRATEGICALLY Questions:

1. State the strategy of Hindustan Unilever in your own words.

2. At what different levels is strategy formulated in HUL?

3. Comment on the strategic decision-making at HUL.

4. Give your opinion on whether the shift in strategic decision-making from India to Unilever’s headquarters could prove to be advantageous to HUL or not.

CASE: 2 THE STRATEGIC ASPIRATIONS OF THE RESERVE BANK OF INDIA

Questions:

1. Consider the vision and mission statements of the Reserve Bank of India. Comment on the quality of both these statements.

2. Should the RBI go for a systematic and comprehensive strategic plan in place of its earlier pragmatic approach of responding to environmental events as and when they occur? Why?

CASE: 3 THE INTERNATIONALISATION OF KALYANI GROUP Questions:

1. What is the motive for internationalisation by the Kalyani Group? Discuss.

2. Which type of international strategy is Kalyani Group adopting? Explain.

CASE 4: THE STORY OF SYNERGOS UNFOLDS

Questions:

1. Identify the type of organisation structure being used at Synergos and explain how it works. What are the benefits of using this type of structure? What are the pitfalls?

2. Express your opinion about whether the structure is in line with the recruitments of the strategy that Synergos is implementing.

3. Based on the information related to the information, control and reward systems available in the case, examine whether these systems are appropriate for the type of strategy being implemented.

CASE: 5 EXERCISING STRATEGIC AND OPERATIONAL CONTROLS AT iGATE GLOBAL SOLUTIONS

Questions:

1. Analyse the iGATE case to highlight how it could apply some of the strategic controls such as premise control, implementation control, strategic surveillance and special alert control.

2. Analyse and describe the process of setting of standards at iGATE.

3. Give your opinion on the effectiveness of the role of reward system in exercising HR performance management at iGATE and suggest what improvements are possible, given the environmental conditions in the IT/ITES industry in India at present.

Business Communication Skills

CASE I: A Reply Sent to an Erring CustomerQuestions: 1. Comment on the appropriateness of the sender’s tone to a customer.2. Point out the old – fashioned phrases and expressions.3. Rewrite the reply according to the principles of effective writing in business.

Case II: Advertising Radio FM BrandQuestions:1. What is non – verbal communication? Why do you suppose that this commercial relies primarily on non-verbal communication between a young man and a gorgeous woman? What types of non – verbal communication are being used in this case?2. Would any of the non-verbal communications in this spot (ad) not work well in another culture? 3. What role does music play in this spot? Who is the target market?4. Is the music at all distracting from the message?5. How else are radio stations advertised on TV?

CASE III: Arvind Pandey Caught in Business WebQuestions: 1. Analyse the reasons for Arvind Pandey’s dilemma.2. Does Arvind Pandey really face a dilemma?3. In your view what should Arvind Pandey do? Should he disclose it to his German Vice President?

CASE IV: Company Accepting a Contract

Questions: 1. Comment on the terms and conditions placed by the corporation. 2. What factors influenced the computer company’s decision to accept the contract?3. Was it a win – win agreement? Discuss?

Business Law

Note: Solve any 8 Questions out of 10.

1. (a) Discuss the term ‘Continuing Guarantee’. How can it be revoked?(b) State briefly the rights and obligations of a bailee.

2. (a) What do you understand by the term Implied ‘Authority of a partner’?(b) Enumerate the acts which are not covered under implied authority.

3. (a) What are the rights and duties of a minor in relation to partnership business? (b) Distinguish between --

(i) Sub-agent and Substituted Agent (ii) Sale, Bailment and Pledge

4. (a) Explain the rights of a partner. (b) Distinguish between the following:

(i) Succession and Assignment. (ii) Contract of Indemnity and Contract of Guarantee.

5. Write short note on.i) Non-registration of a firm.ii) Capacity of Contractiii) Kinds of Bailment.iv) Anticipatory breach of a Contract.

6. a) When is a Surety Discharged from Liability by the conduct of the creditor. b) Describe the rules relating to passing of property in the sale of goods.

7. a) What is an illegal agreement? State the effects of illegality.b) What is ‘Supervening Impossibility’? What are its effect upon the contract?

c) What are the remedies available to the buyer when goods in wrong quantity delivered to him?

d) When shall a retired partner be discharged from his liabilities for the acts of the firm before retirement?

8. (a) State the principles on which damages are assessed for breach of contract.(b) Describe the law relating to the ‘right of resale’ available to an unpaid seller in the Sale of Goods Act, 1930.

9. a) What are the rules regarding delivery of goods?b) Distinguish between:

i) Novation and Alteration. ii) Liquidated damages and penalty

10. a) Transferee of a partner’s interest cannot exercise the right of transferring partner. b) Appropriation is a right primarily of the debtor and for his benefit.

c) A proposal can be revoked otherwise than by communication. d) Right of stoppage in transit is an extension of the right of lien.

Conflict Management & Negotiation skills

CASE I : MARUTI UDYOG LIMITED

Questions:

1. Do you think that the conflict was resolved in proper manner? Give reasons?

2. If you were the union leader how would you have solved this dispute?

3. Amongst all the incentives schemes from the negotiated settlement which 3 skills are more effective? And why?

CASE STUDY 2: PHARMACEUTICAL INDUSTRY

Questions:

1. Does role of power play a vital impact in negotiation? Take the base of case and explain?

2. Explain the behavior during negotiation in this case (that is the opening move, negotiation dance & influence mechanism)?

3. What was the main reason for the communication gap in this case? And also explain the classification of conflict?

CASE STUDY 3: RESENTMENT OF LOCAL VILLAGERS TO PRESERVE THEIR INTEREST AND GOVERNMENT’S DRIVE TOWARDS DEVELOPMENT OF THAT AREA BY OPENING AN ENGINEERING COLLEGE

Questions:

1. Who was the main reason for this conflict? Government or the rural population? Explain in detail?

2. Was it possible to avoid this conflict? Give reasons to your answers?

3. In this case, explain the different levels of conflict (That is low level, optimum level, high level)?

Finance Management

Case No. 1: Cooking LPG Ltd

Introduction Cooking LPG Ltd, Gurgaon, is a private sector firm dealing in the bottling and supply of domestic LPG for household consumption since 1995. The firm has a network of distributors in the districts of Gurgaon and Faridabad. The bottling plant of the firm is located on National Highway – 8 (New Delhi – Jaipur), approx. 12 kms from Gurgaon. The firm has been consistently performing we.” and plans to expand its market to include the whole National Capital Region.

The production process of the plant consists of receipt of the bulk LPG through tank trucks, storage in tanks, bottling operations and distribution to dealers. During the bottling process, the cylinders are subjected to pressurized filling of LPG followed by quality control and safety checks such as weight, leakage and other defects. The cylinders passing through this process are sealed and dispatched to dealers through trucks. The supply and distribution section of the plant prepares the invoice which goes along with the truck to the distributor. Statement of the Problem :Mr. I. M. Smart, DGM(Finance) of the company, was analyzing the financial performance of the company during the current year. The various profitability ratios and parameters of the company indicated a very satisfactory performance. Still, Mr. Smart was not fully content-specially with the management of the working capital by the company. He could recall that during the past year, in spite of stable demand pattern, they had to, time and again, resort to bank overdrafts due to non-availability of cash for making various payments. He is aware that such aberrations in the finances have a cost and adversely affects the performance of the company. However, he was unable to pinpoint the cause of the problem.

He discussed the problem with Mr. U.R. Keenkumar, the new manager (Finance). After critically examining the details, Mr. Keenkumar realized that the working capital was hitherto estimated only as approximation by some rule of thumb without any proper computation based on sound financial policies and, therefore, suggested a reworking of the working capital (WC) requirement. Mr. Smart assigned the task of determination of WC to him. Profile of Cooking LPG Ltd. 1) Purchases : The company purchases LPG in bulk from various importers ex-Mumbai and Kandla,

@ Rs. 11,000 per MT. This is transported to its Bottling Plant at Gurgaon through 15 MT capacity tank trucks (called bullets), hired on annual contract basis. The average transportation cost per bullet ex-either location is Rs. 30,000. Normally, 2 bullets per day are received at the plant. The company make payments for bulk supplies once in a month, resulting in average time-lag of 15 days.

2) Storage and Bottling : The bulk storage capacity at the plant is 150 MT (2 x 75 MT storage tanks) and the plant is capable of filling 30 MT LPG in cylinders per day. The plant operates for 25 days per month on an average. The desired level of inventory at various stages is as under.

LPG in bulk (tanks and pipeline quantity in the plant) – three days average production / sales. Filled Cylinders – 2 days average sales. Work-in Process inventory – zero.

3) Marketing : The LPG is supplied by the company in 12 kg cylinders, invoiced @ Rs. 250 per cylinder. The rate of applicable sales tax on the invoice is 4 per cent. A commission of Rs. 15 per cylinder is paid to the distributor on the invoice itself. The filled cylinders are delivered on company’s expense at the distributor’s godown, in exchange of equal number of empty cylinders. The deliveries are made in truck-loads only, the capacity of each truck being 250 cylinders. The distributors are required to pay for deliveries through bank draft. On receipt of the draft, the cylinders are normally dispatched on the same day. However, for every truck

purchased on pre-paid basis, the company extends a credit of 7 days to the distributors on one truck-load.

4) Salaries and Wages : The following payments are made : Direct labour – Re. 0.75 per cylinder (Bottling expenses) – paid on last day of the month. Security agency – Rs. 30,000 per month paid on 10th of subsequent month. Administrative staff and managers – Rs. 3.75 lakh per annum, paid on monthly basis on the last

working day.5) Overheads :

Administrative (staff, car, communication etc) – Rs. 25,000 per month – paid on the 10 th of subsequent month.

Power (including on DG set) – Rs. 1,00,000 per month paid on the 7th Subsequent month. Renewal of various licenses (pollution, factory, labour CCE etc.) – Rs. 15,000 per annum paid at

the beginning of the year. Insurance – Rs. 5,00,000 per annum to be paid at the beginning of the year. Housekeeping etc – Rs. 10,000 per month paid on the 10th of the subsequent month. Regular maintenance of plant – Rs. 50,000 per month paid on the 10th of every month to the

vendors. This includes expenditure on account of lubricants, spares and other stores. Regular maintenance of cylinders (statutory testing) – Rs. 5 lakh per annum – paid on monthly

basis on the 15th of the subsequent month. All transportation charges as per contracts – paid on the 10th subsequent month. Sales tax as per applicable rates is deposited on the 7th of the subsequent month.

6) Sales : Average sales are 2,500 cylinders per day during the year. However, during the winter months (December to February), there is an incremental demand of 20 per cent.

7) Average Inventories : The average stocks maintained by the company as per its policy guidelines : Consumables (caps, ceiling material, valves etc) – Rs. 2 lakh. This amounts to 15 days

consumption. Maintenance spares – Rs. 1 lakh Lubricants – Rs. 20,000 Diesel (for DG sets and fire engines) – Rs. 15,000 Other stores (stationary, safety items) – Rs. 20,000

8) Minimum cash balance including bank balance required is Rs. 5 lakh. 9) Additional Information for Calculating Incremental Working Capital During Winter.

No increase in any inventories take place except in the inventory of bulk LPG, which increases in the same proportion as the increase of the demand. The actual requirements of LPG for additional supplies are procured under the same terms and conditions from the suppliers.

The labour cost for additional production is paid at double the rate during wintes. No changes in other administrative overheads. The expenditure on power consumption during winter increased by 10 per cent. However,

during other months the power consumption remains the same as the decrease owing to reduced production is offset by increased consumption on account of compressors /Acs.

Additional amount of Rs. 3 lakh is kept as cash balance to meet exigencies during winter. No change in time schedules for any payables / receivables. The storage of finished goods inventory is restricted to a maximum 5,000 cylinders due to

statutory requirements.

Question:

1. Determine the Working Capital

Case No. 2: M/s Hi- Tech Electronics

M/s. Hi – tech Electronics, a consumer electronics outlet, was opened two years ago in Dwarka, New Delhi. Hard work and personal attention shown by the proprietor, Mr. Sony, has brought success. However, because of insufficient funds to finance credit sales, the outlet accepted only cash and bank credit cards. Mr. Sony is now considering a new policy of offering installment sales on terms of 25 per cent down payment and 25 per cent per month for three months as well as continuing to accept cash and bank credit cards.

Mr. Sony feels this policy will boost sales by 50 percent. All the increases in sales will be credit sales. But to follow through a new policy, he will need a bank loan at the rate of 12 percent. The sales projections for this year without the new policy are given in Exhibit 1. Exhibit 1 Sales Projections and Fixed costs Month Projected sales without instalment option Projected sales with instalment optionJanuary Rs. 6,00,000 Rs. 9,00,000February 4,00,000 6,00,000March 3,00,000 4,50,000April 2,00,000 3,00,000May 2,00,000 3,00,000June 1,50,000 2,25,000July 1,50,000 2,25,000August 2,00,000 3,00,000September 3,00,000 4,50,000October 5,00,000 7,50,000November 5,00,000 15,00,000December 8,00,000 12,00,000Total Sales 48,00,000 72,00,000Fixed cost 2,40,000 2,40,000

He further expects 26.67 per cent of the sales to be cash, 40 per cent bank credit card sales on which a 2 per cent fee is paid, and 33.33 per cent on instalment sales. Also, for short term seasonal requirements, the film takes loan from chit fund to which Mr. Sony subscribes @ 1.8 per cent per month.

Their success has been due to their policy of selling at discount price. The purchase per unit is 90 per cent of selling price. The fixed costs are Rs. 20,000 per month. The proprietor believes that the new policy will increase miscellaneous cost by Rs. 25,000.

The business being cyclical in nature, the working capital finance is done on trade – off basis. The proprietor feels that the new policy will lead to bad debts of 1 per cent.

Questions:

(a) As a financial consultant, advise the proprietor whether he should go for the extension of credit facilities.

(b) Also prepare cash budget for one year of operation of the firm, ignoring interest. The minimum desired cash balance &Rs. 30,000, which is also the amount the firm has on January 1. Borrowings are possible which are made at the beginning of a month and repaid at the end when cash is available.

Case No.3: SmoothdriveTyre Ltd SmoothdriveTyre Ltd manufacturerstyres under the brand name “Super Tread’ for the domestic car market. It is presently using 7 machines acquired 3 years ago at a cost of Rs. 15 lakh each having a useful life of 7 years, with no salvage value.

After extensive research and development, SmoothdriveTyre Ltd has recently developed a new tyre, the ‘Hyper Tread’ and must decide whether to make the investments necessary to produce and market the Hyper Tread. The Hyper Tread would be ideal for drivers doing a large amount of wet weather and off road driving in addition to normal highway usage. The research and development costs so far total Rs. 1,00,00,000. The Hyper Tread would be put on the market beginning this year and SmoothdriveTyrs expects it to stay on the market for a total of three years. Test marketing costing Rs. 50,00,000, shows that there is significant market for a Hyper Tread type tyre.

As a financial analyst at SmoothdriveTyre, Mr. Mani asked by the Chief Financial Officer (CFO), Mr. Tyrewala to evaluate the Hyper-Tread project and to provide a recommendation or whether or not to proceed with the investment. He has been informed that all previous investments in the Hyper Tread project are sunk costs are only future cash flows should be considered. Except for the initial investments, which occur immediately, assume all cash flows occur at the year-end.

SmoothedriveTyre must initially invest Rs. 72,00,00,000 in production equipments to make the Hyper Tread. They would be depreciated at a rate of 25 per cent as per the written down value (WDV) method for tax purposes. The new production equipments will allow the company to follow flexible manufacturing technique, that is both the brands of tyres can be produced using the same equipments. The equipments is expected to have a 7-year useful life and can be sold for Rs. 10,00,000 during the fourth year. The company does not have any other machines in the block of 25 per cent depreciation. The existing machines can be sold off at Rs. 8 lakh per machine with an estimated removal cost of one machine for Rs. 50,000. Operating Requirements The operating requirements of the existing machines and the new equipment are detailed in Exhibits 11.1 and 11.2 respectively. Exhibit 11.1 Existing Machines

Labour costs (expected to increase 10 per cent annually to account for inflation) :(a) 20 unskilled labour @ Rs. 4,000 per month(b) 20 skilled personnel @ Rs. 6,000 per month.(c) 2 supervising executives @ Rs. 7,000 per month.(d) 2 maintenance personnel @ Rs. 5,000 per month.

Maintenance cost :Years 1-5 :Rs. 25 lakhYears 6-7 :Rs. 65 lakh

Operating expenses :Rs. 50 lakh expected to increase at 5 per cent annually. Insurance cost / premium :

Year 1 : 2 per cent of the original cost of machineAfter year 1 : Discounted by 10 per cent.

Exhibit 11.2 New production Equipment Savings in cost of utilities : Rs. 2.5 lakh Maintenance costs :

Year 1 – 2 :Rs. 8 lakhYear 3 – 4 :Rs. 30 lakh

Labour costs : 9 skilled personnel @ Rs. 7,000 per month

1 maintenance personnel @ Rs. 7,000 per month. Cost of retrenchment of 34 personnel : (20 unskilled, 11 skilled, 2 supervisors and 1

maintenance personnel) : Rs. 9,90,000, that is equivalent to six months salary. Insurance premium

Year 1 : 2 per cent of the purchase cost of machineAfter year 1 : Discounted by 10 per cent.

The opening expenses do not change to any considerable extent for the new equipment and the difference is negligible compared to the scale of operations. SmoothdriveTyre intends to sell Hyper Tread of two distinct markets :1. The original equipment manufacturer (OEM) market : The OEM market consists primarily of the

large automobile companies who buy tyres for new cars. In the OEM market, the Hyper Tread is expected to sell for Rs. 1,200 per tyre. The variable cost to produce each Hyper Tread is Rs. 600.

2. The replacement market : The replacement market consists of all tyres purchased after the automobile has left the factory. This markets allows higher margins and SmoothdriveTyre expects to sell the Hyper Tread for Rs. 1.500 per tyre. The variable costs are the same as in the OEM market. SmoothdriveTyre expects to raise prices by 1 percent above the inflation rate.

The variable costs will also increase by 1 per cent above the inflation rate. In addition, the Hyper Tread project will incur Rs. 2,50,000 in marketing and general administration cost in the first year which are expected to increase at the inflation rate in subsequent years.

SmoothdriveTyre’s corporate tax rate is 35 per cent. Annual inflation is expected to remain constant at 3.25 per cent. SmoothdriveTyre uses a 15 per cent discount rate to evaluate new product decisions. The Tyre Market Automotive industry analysts expect automobile manufacturers to have a production of 4,00,000 new cars this year and growth in production at 2.5 per year onwards. Each new car needs four new tyres (the spare tyres are undersized and fall in a different category) SmoothdriveTyre expects the Hyper Tread to capture an 11 per cent share of the OEM market.

The industry analysts estimate that the replacement tyre market size will be one crore this year and that it would grow at 2 per cent annually. SmoothdriveTyre expects the Hyper Tread to capture an 8 per cent market share.

You also decide to consider net working capital (NWC) requirements in this scenario. The net working capital requirement will be 15 per cent of sales. Assume that the level of working capital is adjusted at the beginning of the year in relation to the expected sales for the year. The working capital is to be liquidated at par, barring an estimated loss of Rs. 1.5 crore on account of bad debt. The bad debt will be a tax-deductible expense. Question:

As a finance analyst, prepare a report for submission to the CFO and the Board of Directors, explaining to them the feasibility of the new investment. Case No. 4: Computation of Cost of Capital of PALCO Ltd

In October 2003, Neha Kapoor, a recent MBA graduate and newly appointed assistant to the Financial Controller of Palco Ltd, was given a list of six new investment projects proposed for the following year. It was her job to analyse these projects and to present her findings before the Board of Directors at its annual meeting to be held in 10 days. The new project would require an investment of Rs. 2.4 crore.

Palco Ltd was founded in 1965 by Late Shri A. V. Sinha. It gained recognition as a leading producer of high quality aluminum, with the majority of its sales being made to Japan. During the rapid

economic expansion of Japan in the 1970s, demand for aluminum boomed, and palco’s sales grew rapidly. As a result of this rapid growth and recognition of new opportunities in the energy market, Palco began to diversify its products line. While retaining its emphasis on aluminum production, it expanded operations to include uranium mining and the production of electric generators, and finally, it went into all phases of energy production. By 2003, Palco’s sales had reached Rs. 14 crore level, with net profit after taxes attaining a record of Rs. 67 lakh.

As Palco expanded its products line in the early 1990s, it also formalized its caital budgeting procedure. Until 1992, capital investment projects were selected primarily on the basis of the average return on investment calculations, with individual departments submitting these calculations for projects falling within their division. In 1996, this procedure was replaced by one using present value as the decision making criterion. This change was made to incorporate cash flows rather than accounting profits into the decision making analysis, in addition to adjusting these flows for the time value of money. At the time, the cost of capital for Palco was determined to be 12 per cent, which has been used as the discount rate for the past 5 years. This rate was determined by taking a weighted average cost Palco had incurred in raising funds from the capital market over the previous 10 years.

It had originally been Neha’s assignment to update this rate over the most recent 10-year period and determine the net present value of all the proposed investment opportunities using this newly calculated figure. However, she objected to this procedure, stating that while this calculation gave a good estimate of “the past cost” of capital, changing interest rates and stock prices made this calculation of little value in the present. Neha suggested that current cost of raising funds in the capital market be weighted by their percentage mark-up of the capital structure. This proposal was received enthusiastically by the Financial Controller of the Palco, and Neha was given the assignment of recalculating Palco’s cost of capital and providing a written report for the Board of Directors explaining and justifying this calculation.

To determine a weighted average cost of capital for Palco, it was necessary for Neha to examine the cost associated with each source of funding used. In the past, the largest sources of funding had been the issuance of new equity shares and internally generated funds. Through conversations with Financial Controller and other members of the Board of Directors, Neha learnt that the firm, in fact, wished to maintain its current financial structure as shown in Exhibit 1. Exhibit 1 Palco Ltd Balance Sheet for Year Ending March 31, 2003Assets Liabilities and EquityCash Accounts receivableInventoriesTotal current assetsNet fixed assetsGoodwillTotal assets

Rs. 90,00,000 3,10,00,0001,20,00,0005,20,00,000 19,30,00,000 70,00,000 25,20,00,000

Accounts payableShort-term debtAccrued taxesTotal current liabilitiesLong-term debtPreference sharesRetained earningsEquity sharesTotal liabilities and equity shareholders fund

Rs. 8,50,000 1,00,00011,50,0001,20,00,000 7,20,00,0004,80,00,000 1,00,00,000 11,00,000

25,20,00,000

She further determined that the strong growth patterns that Palco had exhibited over the last ten years were expected to continue indefinitely because of the dwindling supply of US and Japanese domestic oil and the growing importance of other alternative energy resources. Through further investigations, Neha learnt that Palco could issue additional equity share, which had a par value of Rs. 25 pre share and were selling at a current market price of Rs. 45. The expected dividend for the next period would be Rs.

4.4 per share, with expected growth at a rate of 8 percent per year for the foreseeable future. The flotation cost is expected to be on an average Rs. 2 per share.

Preference shares at 11 per cent with 10 years maturity could also be issued with the help of an investment banker with an investment banker with a per value of Rs. 100 per share to be redeemed at par. This issue would involve flotation cost of 5 per cent.

Finally, Neha learnt that it would be possible for Palco to raise an additional Rs. 20 lakh through a 7 – year loan from Punjab National Bank at 12 per cent. Any amount raised over Rs. 20 lakh would cost 14 per cent. Short-term debt has always been usesd by Palco to meet working capital requirements and as Palco grows, it is expected to maintain its proportion in the capital structure to support capital expansion. Also, Rs. 60 lakh could be raised through a bond issue with 10 years maturity with a 11 percent coupon at the face value. If it becomes necessary to raise more funds via long-term debt, Rs. 30 lakh more could be accumulated through the issuance of additional 10-year bonds sold at the face value, with the coupon rate raised to 12 per cent, while any additional funds raised via long-term debt would necessarily have a 10 – year maturity with a 14 per cent coupon yield. The flotation cost of issue is expected to be 5 per cent. The issue price of bond would be Rs. 100 to be redeemed at par.

In the past, Palco had calculated a weighted average of these sources of funds to determine its cost of capital. In discussion with the current Financial Controller, the point was raised that while this served as an appropriate calculation for external funds, it did not take into account the cost of internally generated funds. The Financial Controller agreed that there should be some cost associated with retained earnings and need to be incorporated in the calculations but didn’t have any clue as to what should be the cost.

Palco Ltd is subjected to the corporate tax rate of 40 per cent.

Questions:

From the facts outlined above, what report would Neha submit to the Board of Directors of palcoLtd ?Case No. 5: ARQ Ltd

ARQ Ltd is an Indian company based in Greater Noida, which manufactures packaging materials for food items. The company maintains a present fleet of five fiat cars and two Contessa Classic cars for its chairman, general manager and five senior managers. The book value of the seven cars is Rs. 20,00,000 and their market value is estimated at Rs. 15,00,000. All the cars fall under the same block of depreciation @ 25 per cent.

A German multinational company (MNC) BYR Ltd, has acquired ARQ Ltd in all cash deal. The merged company called BYR India Ltd is proposing to expand the manufacturing capacity by four folds and the organization structure is reorganized from top to bottom. The German MNC has the policy of providing transport facility to all senior executives (22) of the company because the manufacturing plant at Greater Noida was more than 10 kms outside Delhi where most of the executives were staying. Prices of the cars to be provided to the Executives have been as follows :

Manager (10) Santro King Rs. 3,75,000DGM and GM (5) Honda City 6,75,000Director (5) Toyota Corolla 9,25,000Managing Director (1) Sonata Gold 13,50,000Chairman (1) Mercedes benz 23,50,000

The company is evaluating two options for providing these cars to executives

Option 1 : The company will buy the cars and pay the executives fuel expenses, maintenance expenses, driver allowance and insurance (at the year – end). In such case, the ownership of the car will lie with the company. The details of the proposed allowances and expenditures to be paid are as follows :a) Fuel expense and maintenance Allowances per monthParticulars Fuel expenses Maintenance allowance Manager DGM and GMDirectorManaging DirectorChairman

Rs. 2,500 5,000 7,500 12,000 18,000

Rs. 1,000 1,200 1,800 3,000 4,000

b) Driver Allowance :Rs. 4,000 per month (Only Chairman, Managing Director and Directors are eligible for driver allowance.)

c) Insurance cost : 1 per cent of the cost of the car.

The useful life for the cars is assumed to be five years after which they can be sold at 20 per cent salvage value. All the cars fall under the same block of depreciation @ 25 per cent using written down method of depreciation. The company will have to borrow to finance the purchase from a bank with interest at 14 per cent repayable in five annual equal instalments payable at the end of the year. Option 2 : ORIX, The fleet management company has offered the 22 cars of the same make at lease for the period of five years. The monthly lease rentals for the cars are as follows (assuming that the total of monthly lease rentals for the whole year are paid at the end of each year.

Santro Xing Rs. 9,125Honda City 16,325Toyota Corolla 27,175Sonata Gold 39,250 Mercedes Benz 61,250

Under this lease agreement the leasing company, ORIX will pay for the fuel, maintenance and driver expenses for all the cars. The lessor will claim the depreciation on the cars and the lessee will claim the lease rentals against the taxable income. BYR India Ltd will have to hire fulltime supervisor (at monthly salary of Rs. 15,000 per month) to manage the fleet of cars hired on lease. The company will have to bear additional miscellaneous expense of Rs. 5,000 per month for providing him the PC, mobile phone and so on.

The company’s effective tax rate is 40 per cent and its cost of capital is 15 per cent.

Question:

Analyze the financial viability of the two options. Which option would you recommend? Why?



AND THESIS








[email protected]

ARAVIND 09901366442 - 09902787224



SUBJECTS

A B C


AUDIT MANAGEMENT

ADVERTISING



ASSET MANAGEMENT

AVIATION MANAGEMENT




BANKING MANAGEMENT

BPO MANAGEMENT


BUSINESS MARKETING

BUSINESS ETHICS


BUSINESS LOGISTICS



BUSINESS MANAGEMENT


CORPORATE LAW

CONSUMER BEHAVIOR

CORPORATE FINANCE



CORPORATE GOVERANCE



CLINICAL RESEARCH




BUSINESS PLANNING

BUSINESS STRATEGY




CONSUMER MANAGEMENT



D E F

DAIRY MANAGEMENT


DATABASE MANAGEMENT


E-BUSINESS SYSTEM

E-COMMERCE

ENERGY MANAGEMENT



EVENT MANAGEMENT



EXPORT MANAGEMENT

FINANCE

FINACE MANAGEMENT




FASHION MANAGEMENT


G H I

GENERAL MANAGEMENT


H R MANAGEMENT


HOSPITAL MANAGEMENT



HOTEL MANAGEMENT

HOLISTIC MANAGEMENT


HARDWARE MANAGEMENT









INDUSTRIAL MARKETING







IT FOR MANAGEMENT



INTERIOR MANAGEMENT

L M N

LOGISTICS

LOGISTIC MANAGEMENT


MARKETING


MASS COMMUNICATION

MEDIA MANAGEMENT




MATERIAL MANAGEMENT








NETWORKING

NETWORK MANAGEMENT


O P Q

OPERAIONS



OPERATING SYSTEM

OPERATION RESEARCH



PROJECT MANAGEMENT









QUANTITATIVE METODS



R S T


RETAIL MANAGEMENT



RURAL MANAGEMENT







STORE MANAGEMENT


SHIPPING MANAGEMENT

SOFTWARE MANAGEMENT


TELECOM MANAGEMENT


TREASURY MANAGEMENT


TRAVEL & TOURISM



TAXATION MANAGEMENT

TEXTILE MANAGEMENT

SALES MANAGEMENT

International Business

CASE I: A GLOBAL PLAYER?Questions:

1. What routes of globalization has the Mayor group chosen to go global? What other routes could it have taken?

2. What impediments are coming in the Mayor group’s way becoming a major and active player in international business?

3. Why is ‘Made in India’ not liked in foreign markets? What can be done to erase the perception?

CASE II: ARROW AND THE APPAREL INDUSTRY

Questions:

1. Why did Arvind Mills choose globalization as major route to achieve growth when domestic market was huge?

2. How does lifting of Country-wise quota regime’ help Arvind Mills?

3. What lessons can other Indian business learn from the experience of Arvind Mills?CASE III: AT THE RECEIVING END!

Questions:

1. What lessons can other MNCs learn from the experience of McDonald’s?

2. Aware of the food habits of Indians, why did McDonald’s err in mixing beef extract in the oil used for fries?

3. How far has McDonald’s succeeded in strategizing and meeting local cultures and needs?

CASE IV: BPO-BANE OR BOON?

Questions:

1. Which of the theories of International trade can help Indian services providers gain competitive edge over their competitors?

2. Pick up some Indian services providers. With the help of Michael Porter’s diamond, analyze their strengths and weaknesses as active players in BPO.

CASE V: THE SAGA CONTINUES

Questions:

1. What is technology? How does it differ from science?

2. Describe the different phases of technology management?

3. Bring out the impact of technology on: (a) Society, (b) Economy, and(c) A plant.

4. What is technology transfer? What are the directions of such transfers?

5. Bring out the stages in technology transfer.

6. Explain the issues involved in international technology transfers.

CASE VI: THE ABB PBS JOINT VENTURE IN OPERATION

Questions:

1. Where does the joint venture meet the needs of both the partners? Where does it fall short?

2. Why had ABB-PBS failed to realize its technology leadership?

3. What lessons one can draw from this incident for better management of technology transfers?

Management Information System

Case I: Morgan Stanley’s Return on System Non-investment

1. Why did Morgan Stanley under invest in information technology?

2. Why was the merger with Dean Witter disruptive for the company?

3. If you were James Gorman, the new head of Global Wealth Management Group, What information systems would you invest in ? Why? Do you think Morgan Stanley's plans for an integrated client information system are worthwhile? [Hint: Think of the services you would like to receive from your banker or stock broker.]

4. Aside from new systems, what changes in management and organization are required to restore revenue and profit growth at the Global Wealth Management Group?

CASE II: Television

Questions:

1. Describe and diagram the existing process for reporting and identifying major public health problems, such as a flu pandemic.

2. How does BioSense improve this process? Diagram the process for reporting and identifying public health problems using BioSense.

3. Discuss the pros and cons of adopting BioSense for public health surveillance. Should all hospitals and public health agencies switch to BioSense? Why or why not?

4. Put yourself in the role of hospital director at a large urban hospital. Would you support joining up with the BioSense system? Why or why not? What factors would you want to take into account before joining?

CASE III: BLOCKBUSTER vs. NETFLIX: WHICH WILL WIN OUT?

Questions:

1. What is Blockbuster's business model? How successful has it been?

2. What industry and technology forces have challenged that business model? What problems have they created?

3. Is Blockbuster developing successful solutions to its problems? Are there other solutions it should have considered?

4. How successful is Netflix and its business model?

5. Do you think Blockbuster or Netflix will succeed in the future? Explain your answer.

CASE IV: IS THE TELEPHONE COMPANY VIOLATING YOUR PRIVACY?

Questions:

1. Do the increased surveillance power and capability of the U.S. government present an ethical dilemma? Explain your answer.

2. Apply an ethical analysis to the issue of the U.8 government's use of telecommunications data to fight terrorism.

3. What are the ethical, social, and political issues raised by the U.S. government creating massive databases to collect the calling data of millions ofAmericans?

4. What is the responsibility of a business such as AT & T or Verizon in this Matter? What are the ethical, social, and political issues raised by a business, such as a phone company, working with the government in this fashion?

5. State your opinion of the agreement reached by the White House and the Senate Judiciary Committee with regard to the NSA wiretapping program. Is this an effective solution?

CASE V: Merrill Lynch Connects Past and Future Technology

Questions:

1. Why did Merrill Lynch need to update its infrastructure?

2. What is the relationship of information technology to Merrill Lynch's business strategy? How was its Web services initiative related to that strategy?

3. Evaluate Merrill Lynch's approach to Web services development. What are the advantages and disadvantages? Is it a good solution? Explain your answer.

4. Do you think that Merrill Lynch's decision to sell off its successful technology initiatives was a good idea? Why or why not?

Case VI: PANASONIC CREATES A SINGLE VERSION OF THE TRUTH FROM ITS DATA

Questions:1. Evaluate Panasonic’s business strategy using the competitive forces and value chain

models.

2. How did Panasonic’s information management problems affect its business performance and ability to execute its strategy? What management, organization and technology factors were responsible for those problems?

3. How did master data management address these problems? How effective was this solution?

4. What challenges did Panasonic face in implementing this solution?

Marketing Management

Case 1: MARKETING SPOTLIGHT- NIKE

Questions:

1. What have been the key success factors for Nike?

2. Where is Nike vulnerable? What should it watch out for?

3. What recommendations would you make to senior marketing executives going forward? What should they be sure to do with its marketing?

Case 2: MARKETING SPOTLIGHT- DISNEY

Questions:

1. What have been the key success factors for Disney?

2. Where is Disney vulnerable? What should it watch out for?

3. What recommendations would you make to their senior marketing executives going forward? What should it be sure to do with its marketing?

Case 3: MARKETING SPOTLIGHT- HSBC

Questions:

1. What have been the key success factors for HSBC?

2. Where is HSBC vulnerable? What should it watch out for?


Case 4: MARKETING SPOTLIGHT- KRISPY KREME

Questions:

1. What have been the key success factors for Krispy Kreme?

2. Where is Krispy Kreme vulnerable? What should it watch out for?


Case 5: MARKETING SPOTLIGHT- SOUTHWEST AIRLINES

Questions:

1. What are the key success factors for Southwest Airlines?

2. Where is Southwest Airlines vulnerable? What should it watch out for?

3. What recommendations would you make to senior marketing executives moving forward? What should they be sure to do with its marketing?

Case 6: MARKETING SPOTLIGHT- WAL-MART

1. What have been the key success factors for Wal-Mart?

2. Where is Wal-Mart vulnerable? What should it watch out for?

3. What recommendations would you make to senior marketing executives going forward? What should the company be sure to do with its marketing?

Operations Management

Note: Solve any 8 Questions out of 10

1. How would operations strategy for a service industry be different if any from that for a manufacturing industry? (Take an example & explain)

2. Consider the following two mutually exclusive projects. The net cash flows are given below:

YEAR NET CASH FLOWS FROM PROJECT A NET CASH FLOWS FROM PROJECT B

0 - Rs. 1,00,000 - Rs. 1,00,000/-1 + Rs. 30,000 + Rs. 15,000/-2 + Rs. 35,000 + Rs. 17,500/-3 + Rs. 40,000 + Rs. 20,000/-4 + Rs. 45,000 + Rs. 22,500/-5 + Rs. 25,000/-6 + Rs. 27,500/-7 + Rs. 30,000/-8 + Rs. 32,500/-

If the desired rate of return is 10% which project should be chosen?

3. What are the levels of aggregation in forecasting for a manufacturing organization? How should this hierarchy of forecasts be linked and used?

4. How would forecasting be useful for operations in a BPO (Business processes outsourcing) unit? What factors may be important for this industry? Discuss.

5. A good work study should be followed by good supervision for getting good results. Explain with an example.

6. What is job evaluation? Can it be alternatively used as job ranking? How does one ensure that job evaluation evaluates the job and not the man? Explain with examples?

7. What is the impact of technology on jobs? What are the similarities between job enlargement & job rotation? Discuss the importance of training in the content of job redesign? Explain with examples?

8. What is internet connectivity? How is it important in to days business would with respect to materials requirement planning & purchasing? Explain with examples?

9. Would a project management organization be different from an organization for regular manufacturing in what ways? Examples.

10. How project evaluation different from project appraisal? Explain with examples.

Organizational BehaviorCase 1: The Chinese Dragon and a New Organization Structure

1. On reading the news about accession of China to WTO, your organization, an internationally well-known name in manufacturing of bicycles, who had just two years ago started operations in India, decided to relocate its manufacturing base to China, while retaining other service and corporate support in India. Discuss what should be the likely structure of your organization. (To help you understand the bicycle manufacturing and support services of the company, a brief outline of the product and process oriented activities is given below).

2. Explain the logic behind your suggested structure. What advantage can be reaped out of this move? What are the likely problems your organization may encounter in such a move?

Case 2: Conflict Management at Supreme India

1. Where did things go wrong?2. Who is responsible for this episode? Is Mr Jain to be blamed?

3. Should the training manager have conceded to his demand for appropriate placement?Questions:

1. Study this case carefully. In India we have two major Korean consumer electronics conglomerates. While both the companies have achieved tremendous market growth, they have started encountering the problem of losing their key people. Track such reasons to the typical Korean culture and suggest how such Korean companies can best adopt the theory Z model.

Case 4: Innovative Customer Service at EMC Corporation

Questions:

1. Read the case and suggest as an organizational behavior professional, what type of managerial interventions can ease the problem of customer service in a competitive, technology-intensive market?

The evidence based managerial interventions can ease the problem of customer service in a competitive technology-intensive market

1. Related the TQM concept in this case with customer retention.

Health & Safety Management

1. How to prevent Industrial Accidents?2. What are the functions of the National Safety Council?3. List ten functions of safety officer which you would consider most important

4. What is risk management? Risk management involves the skills and knowledge of many disciplines. Discuss.

5. What part should the union play in safety?6. Evaluate following statement:

“Safety in industry today is largely a matter of complying with government regulation.”7. Do you think that the various benefits provided under the ESI Schemes are adequate to

meet the health and safety needs of the insured person and his family? Discuss.8. How to prevent accidents in construction industry?9. Pollution control laws have not proved very effective. What do you think are the reasons?10. What are some of the well-known occupational diseases?



AND THESIS








[email protected]

ARAVIND 09901366442 - 09902787224

SUBJECTS



A B C


AUDIT MANAGEMENT

ADVERTISING



ASSET MANAGEMENT

AVIATION MANAGEMENT




BANKING MANAGEMENT

BPO MANAGEMENT


BUSINESS MARKETING

BUSINESS ETHICS


BUSINESS LOGISTICS



BUSINESS MANAGEMENT


BUSINESS PLANNING

BUSINESS STRATEGY


CORPORATE LAW

CONSUMER BEHAVIOR

CORPORATE FINANCE



CORPORATE GOVERANCE



CLINICAL RESEARCH






CONSUMER MANAGEMENT



D E F

DAIRY MANAGEMENT


DATABASE MANAGEMENT


E-BUSINESS SYSTEM

E-COMMERCE

ENERGY MANAGEMENT



EVENT MANAGEMENT


FINANCE

FINACE MANAGEMENT




FASHION MANAGEMENT



EXPORT MANAGEMENT

G H I

GENERAL MANAGEMENT


H R MANAGEMENT


HOSPITAL MANAGEMENT



HOTEL MANAGEMENT

HOLISTIC MANAGEMENT


HARDWARE MANAGEMENT









INDUSTRIAL MARKETING







IT FOR MANAGEMENT



INTERIOR MANAGEMENT

L M N

LOGISTICS

LOGISTIC MANAGEMENT


MARKETING


MASS COMMUNICATION

NETWORKING

NETWORK MANAGEMENT


MEDIA MANAGEMENT




MATERIAL MANAGEMENT








O P Q

OPERAIONS



OPERATING SYSTEM

OPERATION RESEARCH



PROJECT MANAGEMENT









QUANTITATIVE METODS



R S T


RETAIL MANAGEMENT



RURAL MANAGEMENT







STORE MANAGEMENT


SHIPPING MANAGEMENT

SOFTWARE MANAGEMENT


SALES MANAGEMENT

TELECOM MANAGEMENT


TREASURY MANAGEMENT


TRAVEL & TOURISM



TAXATION MANAGEMENT

TEXTILE MANAGEMENT