Required Assignment 2—Manufacturing Budget Analysis

Tom Emory and Jim Morris strolled back to their plant from the administrative offices of Ferguson & Son Manufacturing Company. Tom is manager of the machine shop in the company’s factory; Jim is manager of the equipment maintenance department. The men had just attended the monthly performance evaluation meeting for plant department heads. These meetings had been held on the third Tuesday of each month since Robert Ferguson, Jr., the president’s son, had become plant manager a year earlier. As they were walking, Tom Emory spoke: “Boy, I hate those meetings! I never know whether my department’s accounting reports will show good or bad performance. I’m beginning to expect the worst. If the accountants say I saved the company a dollar, I’m called ‘Sir,’ but if I spend even a little too much—boy, do I get in trouble. I don’t know if I can hold on until I retire.” Tom had just been given the worst evaluation he had ever received in his long career with Ferguson & Son. He was the most respected of the experienced machinists in the company. He had been with the company for many years and was promoted to supervisor of the machine shop when the company expanded and moved to its present location. The president (Robert Ferguson, Sr.) had often stated that the company’s success was due to the high-quality work of machinists like Tom. As supervisor, Tom stressed the importance of craftsmanship and told his workers that he wanted no sloppy work coming from his department. When Robert Ferguson, Jr., became the plant manager, he directed that monthly performance comparisons be made between actual and budgeted costs for each department. The departmental budgets were intended to encourage the supervisors to reduce inefficiencies and to seek cost reduction opportunities. The company controller was instructed to have his staff “tighten” the budget slightly whenever a department attained its budget in a given month; this was done to reinforce the plant manager’s desire to reduce costs. The young plant manager often stressed the importance of continued progress toward attaining the budget; he also made it known that he kept a file of these performance reports for future reference when he succeeded his father. Tom Emory’s conversation with Jim Morris continued as follows: Emory: I really don’t understand. We’ve worked so hard to meet the budget, and the minute we do so they tighten it on us. We can’t work any faster and still maintain quality. I think my men are ready to quit trying. Besides, those reports don’t tell the whole story. We always seem to be interrupting the big jobs for all those small rush orders. All that setup and machine adjustment time is killing us. And quite frankly, Jim, you were no help. When our hydraulic press broke down last month, your people were nowhere to be found. We had to take it apart ourselves and got stuck with all that idle time. Morris: I’m sorry about that, Tom, but you know my department has had trouble making budget, too. We were running well behind at the time of that problem, and if we had spent a day on that old machine, we would never have made it up. Instead, we made the scheduled inspections of the forklift trucks because we knew we could do those in less than the budgeted time. Emory: Well, Jim, at least you have some options. I’m locked into what the scheduling department assigns to me and you know they’re being harassed by sales for those special orders. Incidentally, why didn’t your report show all the supplies you guys wasted last month when you were working in Bill’s department? Morris: We’re not out of the woods on that deal yet. We charged the maximum we could to other work and haven’t even reported some of it yet. Emory: Well, I’m glad you have a way of getting out of the pressure. The accountants seem to know everything that’s happening in my department, sometimes even before I do. I thought all that budget and accounting stuff was supposed to help, but it just gets me into trouble. It’s all a big pain. I’m trying to put out quality work; they’re trying to save pennies.

Review the case. Respond to the following:

• Identify the problems that appear to exist in Ferguson & Son Manufacturing Company’s budgetary control system and explain how the problems are likely to reduce the effectiveness of the system. (approximately 1 page)
• Explain how Ferguson & Son Manufacturing Company’s budgetary control system could be revised to improve its effectiveness. (approximately 1–2 pages)
• Explain how the use of an activity-based costing system could change the results of the budget, if utilized. (approximately 1 page)
• As stated in the case, many employees have “quit trying” and have altered behavior on the job. Provide specific ways for how you would use a budget to change employee behavior and align goals in the organization. Explain how goal alignment can improve profitability and overall return to the shareholders of the company. (approximately 1 page)
• Synthesize data to explain the concept of ROI and describe how the use of an activity-based costing system can improve the company’s ROI and the potential impact on free cash flow. (approximately 1 page)

Write a 5–6-page report in Word format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M5_A2.doc.

By Wednesday, December 17, 2014, deliver your assignment to the M5: Assignment 2 Dropbox.

Research and review a sample quality policy from a health care facility or provider.

Prepare a summary of 750-1,000 words in which you assess the organization’s quality policy. Discuss aspects of the policy–what is included and excluded?

Prepare this assignment according to the APA guidelines found in the APA Style Guide, proper APA guidelines required with in-text citations. An abstract is not required.

Mathematics problems that need to be typed out in word format using the “insert equation” tab.  Moderate work needs to be done and explanations of terms are needed in areas that are necessary.  There are two documents.

The final paper assignment is a research proposal.

For this assignment, you must:

• present a literature review
• develop hypotheses
• design a true experiment to test those hypotheses
• discuss how you would collect and analyze data to test your hypotheses
• discuss the implications of your expected findings

Requirements:

The proposal should follow APA format, including:

• running head
• page headers
• page numbers
• No actual data collection is to take place.

  Papers should be typed and with the following format guidelines: 
   

• 11 or 12 point Arial font
• double-spaced
• 1” margins
• Papers should be no longer than 15 pages of text (not including title page, abstract, references, figure caption, figures)

For Paper Assignment #3 you are asked to do the following:

1.    Title Page

2.    Abstract

3.    Introduction

Paper #2 was designed to help you with the introduction for this research proposal. 

• Please consider the feedback that you received on Paper #2 and make any necessary changes.
• Then cut anything that is irrelevant to the proposal. 
• Finally, at the end of the introduction you should include your hypotheses:
  • including explicit predictions about both main effects and about the interaction of the two independent variables (i.e., whether each main effect/interaction will be significant and the nature of the effect)
  • a discussion of why the variables should interact. 

4.    Method
Your methods section should propose a research design that tests your hypotheses. Your research design must be a true experiment, including:

1. Two independent variables (i.e., a factorial design).
   • At least one of the independent variables must allow random assignment of subjects to conditions (you are allowed to include one Individual Difference Measure (subject variable) in your design, e.g. gender, ethnicity, or perhaps (for example) a group with depression versus a control group without depression).
2. Proposals with a single independent variable will receive a maximum of 75 points. 
3. Describe your study in enough detail that someone else could replicate the experiment you have designed. 

5.   Results and Data Analyses 
The Results and Data Analyses section should show what the results would be if the experimental hypotheses were supported. 

1. Briefly describe what analyses would need to be performed and your design
2. Go through and explain if you expect significant main effects and an interaction
3. Describe the direction of these effects. 
4. Present a figure showing the predicted results.  The results should be in the future tense.  In other words, “I would expect to find…” or “It is predicted that…”

6.    Discussion
The Discussion section should briefly describe the implications of the expected results.

Reminder: You didn’t do this study, so you need to write about it in the future tense, e.g., “The expected finding of a main effect for X would support the idea that…” 

It should also include a section where you describe a set of alternative results. 

• What might your data look like if you do not find what you expected? 
• What would you conclude if you found the data you expected? Your discussion section should also discuss any potential limitations of the study you presented (e.g., generalization given the sample, other possible conceptualizations of the independent and dependent variables).

  You may also want to note other directions that the research may go given the questions you raised.  In other words, if you did your study and found what you predicted, what would be the next logical experiment to run? 

  After you discuss the implications of your findings, the limitations of your study, and other related research questions that may be of interest, you should broaden your discussion to talk about why this is an important research question more generally, pulling out points that you wrote about in Paper #1.

7.     References

8.     Figure Caption(s)

9.     Figure(s)

10.   Copies of Abstracts for all articles you review

I will be grading the papers using the grading sheet provided through this link: Grading Sheet Paper #3.  It may be helpful when you are writing your paper to examine this.

Recall that all previous paper assignments (and the one’s coming up) were related to portions of your research proposal.
You should:

• review any comments you received on these assignments
• use these comments to improve your proposal
• review your lab notes to ensure that you include all necessary components for each section of the paper
• Appendix A in the Stangor book and the APA Manual are good sources for formatting and content.