Professional Documents
Culture Documents
1.
We have reviewed the chairman’s statement in the board meeting minutes of your company dated
March 2018 and the background information of FRG as provides to us by the board.
The finding of our review is the basis of this report. Attached to this letter are the details of our
findings and recommendations.
Yours Faithfully
Aspen Spencer,
Appendix:
Summary: The board of directors of Machine shop has felt that the organizations needs to invest on
and improve its control systems to improve the procurement and inventory control both at the stores
1
and at the central warehouse. Hence, this briefing paper focuses setting up and internal audit Comment [A8]: For identifying where
function to provide better control over the operations. 2 the problems are.
Rational: Independent audit functions provide continuous review related to the effectiveness of
risk management, control and governance purposes. As failures and lack of planning could cost the
organization dearly ( express procurement costs 10% more that the actual purchases), setting up a an
internal control function, will improve the effectiveness of the operations.
1
Proposer: The idea was proposed by Mr. Butcher. 2
Process: The topic was discussed on the Board meeting held on March 4, where Dave Deen, Mike
Baldwin, Frank Buitcher and Viola Wang were present. The proposal brought in by Mr. Butcher was
supported by Viola Wang. The Board agreed to the proposal, and decided to ask the external auditors
to advise the board on whether it would be worth setting up an internal audit function.
Suggestion: As internal audit and control function, could play a huge role in improving the
purchasing and inventory control systems, it is advisavable to set up an internal control system for
Machine shop. 1 Comment [A9]: For concluding
2 comments that it is advisable to bring in an
internal control function.
Technical marks: 3
Professional Skills marks: 1
The candidate mentioned a limited number of
issues such as stock outs and the additional costs
involved with express procurement
Total 4/12
BIG DATA
WHAT?
VOLUME: quantity
VELOCITY: speed
1
VARIETY: data in different forms, structured or unstructured Comment [A10]: For mentioning 3 Vs.
2
WHY?
Big data encompasses information from multiple internal and external sources. It might include
information from MachineShop’s systems, transactions with its customers, social media, mobile 1
devices, and etc. 2 Comment [A11]: For explaining
diversity of data sources using examples.
Big data is often defined by considering the 4Vs: volume, velocity, variety and value. Comment [A12]: Point already given.
Volume
Refers to the scale or amount of data which is now available for organisation to access, store, and use.
This data can be used to give insights to customers’ requirements by identifying trends and buying
patterns. 1
2
Velocity
Refers to the speed at which ‘real time’ data is gathered and used. Many retailers compile records of
each click and interaction a customer makes while visiting a website and use this to recommend
additional purchases to a customer when they next visit the company’s website. Comment [A13]: This would have
earned a mark but the maximum two
marks have already been given.
Variety
Big data enables data of various ‘nature or forms’ for example, photos, sound, numerical, texts and
etc. of structured and unstructured data pool together to aid management to understand the needs of
buyers. Comment [A14]: Point already given.
Veracity
Refers to uncertainty that surrounds the accuracy of a lot of data. The reliability of the data will
influence the value of the outcomes of the data analysis.
Analyse what customer are buying, frequency, and amounts spent for both B2B and B2C.
3. Customer service
Data analytics software could be used to analyse the type of products customers buy, the frequency of
purchases and the amounts typically spent. MachineShop could use this information to build brand 1
loyalty. 2 Comment [A15]: Mark given as good
expansion of point on the slide.
MachineShop could use Twitter/social media data to get better insights into what customers plan to
buy.
Recording customers’ preferences will help MachineShop to tailor its marketing, increase sales by for
example, promoting related products to those purchased before they check – out the website.
Apart from understanding customers’ shopping experience, it will also help MachineShop to predict
inventory requirements and potentially negotiate favourable rates and terms with suppliers.
If a particular product line is not selling well, then an automatic price offer could be triggered.
1
Competitors’ pricing can be monitored though MachineShop has no close competitors at the moment. 2 Comment [A16]: Mark given for these
relevant points but not well developed so
one in total.
Customer service
If customer feedback could be captured, analyse such feedback could enable MachineShop to respond
quickly to customer needs especially complaints. Comment [A17]: Another good point
but maximum marks already awarded.
Technical marks: 7
Professional Skills marks: 1
3b. Good clear slides well-presented and supported
Conventional procurement emphasising on the 5 rights, buy at the right quantity, right quality, right
price, right supplier and at the right time.
In e-procurement, we are using the Internet and digital related technology to attain the 5 rights.
Now let us evaluate the potential application of e-procurement at MachineShop as its Purchasing
department located at head office which has to stock around 10,000 different product lines. Each
product line has a re-order level and a re-order quantity. E-procurement can be approached in a 1 Comment [A18]: For appropriate
number of different ways. 2 recognition of the complexity of lines
offered.
1. For example, in a B2B marketplace, suppliers and buyers trade through a third party site. The
contractual relationship is with the third party, although buyers and suppliers may enter into
regular trades. This would give MachineShop access to many suppliers as needed for growth
of its business. 1
2
2. MachineShop could use buyer centric model where it would have relationships with a number
of individual suppliers. Systems would be integrated, and a procurement management system
managed by MachineShop allowing the selection of the best supplier for each product line.
This would also simplify management reporting, as the system would integrate with internal 2
transactional systems. Comment [A19]: Point is valid and well
2 developed.
3. E-procurement will introduce more transparency to the procurement process and activities.
4. E-procurement should reduce the administrative burden of purchasing. 1 Comment [A20]: Mark has been given
2 for these two brief points.
However, MachineShop needs to consider data security. By making transactions online, it is possible
that competitors may obtain access to their data, providing information about their strategy, products
and customers. 1 Comment [A21]: This is a strong point
2 and relevant.
Furthermore, there is a danger that quality may be compromised if purchases can be made from any
source, anywhere.
There is also the danger that deliveries may not be made on time. Comment [A22]: Not sure these are
risks of e-procurement specifically.
Thus the risks and benefits of e-procurement must be weigh carefully.
Technical marks: 6
Professional Skills marks: 1
Decent evaluation of pros and cons
Total 15/22
Subject: financed by an issue of bonds or shares assessing the two methods of financing.
current gearing is way below the industry average of 60%. Debt may be better choice. 2 Comment [A25]: For stating that
gearing would increase but that MS gearing
is low.
If the company financed by issue of 1 million shares to a venture capitalist
It may dilute their equity holding. It may change their cost of capital, actually, it will improve their Comment [A26]: Candidate needs to
cost of capital. It may make the exist shareholders to lose the control of the company. After raising be more definite.
funds by issue shares, it may dilute the earning per shares. It has to have a general meeting to decide 1 Comment [A27]: A valid point on
whether issue shares by shareholders. dilution of control.
2
In conclusion, the company should to issue by debt due to the low gearing ratio which result in a
better debt facility after taking some sensitivity analysis to identify the uncertainty and the 1
shareholders can accept the risk and the reward. 2 Comment [A28]: Worth a mark for a
sensible conclusion but not well justified.
Technical marks: 3
Professional Skills marks: 1
No meaningful analysis as no gearing measure is
5. calculated and the only calculation is the interest
on the additional loan
Advantages: Total 3/16
The chairman of the company is responsible for board meetings to be conducted properly and ensures
smooth running of the meetings. Dave Deen being a chairman of the would be the Head of Board of
directors chairing the board meetings and would be able to analyse decisions taken at the board 1
meetings and influence them. 2 Comment [A29]: For being able to
continue influence.
2) Monitoring and Supervision:
Dave Deen as a chairman would be responsible for close supervision and monitoring of the Financial
Statements as well as would monitor the Financial Stability of the co. He has to ensure that CFO and
Other higher management staff are working efficiently by close supervision of the Financials as well
identifying any errors and omissions in the Financial Statements before publishing. Comment [A30]: This isn’t an
advantage this is just a statement of fact in
isolation.
3) Change In Roles and Responsibility:
Dave Deen being a chairman will probably be an Executive Director or Non-Executive Director of Comment [A31]: This is incorrect, he
machineshop which would mean that Dave Deen would be working as full time Director or Part Time would not be an executive member of the
board.
Director comparing with CEO Role which is a full time responsibility.
By working as a Chairman, effectively he would no longer be much responsible when acting as CEO
of Machineshop which requires greater responsibility in terms of strategically positioning of the
1) Changes In Remuneration:
When acting as CEO of machineshop, Dave Deen would be getting more remuneration as well
benefits which probably Dave Deen as a chairman would not be getting. As a chairman, Dave Deen
would be entitlied to less benefits as now he will be acting in the position of ED or NED. Comment [A33]: Irrelevant point.
2) Startegic Decisions:
If Dave Deen acts a chairman, There might be a change in duties as he would not longer be involved
in the decision making process and could not take decisions which are in the best interest of
machineshop. Dave Deen could only be involved in the monitoring process and supervisory level of
decions taken as well in the more improved directions of machineshop. Comment [A34]: No mark as this is a
disadvantage of Dave Deen giving up his
role as CEO which has been stated in the
requirement, not of him staying on in his
Technical marks: 1 chairman capacity.
Professional Skills marks: 0
No evaluation of Dave Deen remaining as
Chairman and the candidate has not really
Q5b. Multi Experinced Professional: answered the question.
The New CEO should be a multi talented professional who posses extra ordinary skills in the relevant
industry as well be able to analyse tasks and decions most fruitful to machieshop in the longer run. 1 Comment [A35]: For specifying some
qualities without being specific enough.
2
Relevant Qualification & Skills:
The new CEO should have the necessary qualification best suited to the duty as well highly proven
track record and experience best suited to the relevant industry as well be able to act as a leader which
results in enhancement of the skills of employees showing an unmatchable leadership qualities. 1 Comment [A36]: For identifying
2 qualifications and experience.
Understanding the needs of machineshop:
The new CEO should posses sufficient skills which enables him to identify how to strategically
improve the performance of the company in less time and what measures should be taken which
deploys minimum resources and at the same time enhancing employees abilities up to the best. 1 Comment [A37]: For specifying
2 strategic capabilities and being able to
implement strategy.
Extra-Ordinary Leadership Qualities:
The new CEO should be a great Leader which not only work as an employee but rather would be an
exemplary to the employees of the co. He should himself conduct enough skillful trainings which 1
significantly improve employees skills and talent. Comment [A38]: For leader as figure
2 head and role model.
Motivational Personality:
The New CEO would be a sign of immense motivation of the employees machineshop. Not only he
should be a CEO but he has to be more than a CEO and Should motivate his staff and employees
1
which enables employees to give their best at the same work on polishing their soft skills. 2 Comment [A39]: For motivator to
improve productivity.
Technical marks: 5
Professional Skills marks: 0
Candidate has identified some of the most
important qualities but not applied to the case. This
would have been awarded 0.5 but the candidate did
not follow the requirement to write a letter so has
been penalised a grade taking the score to 0.
Total 6/22
Question 1 6/24
Question 2 4/16
Question 3 15/22
Question 4 3/16
Question 5 6/22
Total 34