CORPORATE FINANCE IIBMS ONGOING EXAM ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558

CORPORATE FINANCE IIBMS ONGOING EXAM ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558

CONTACT:

DR. PRASANTH BE MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

Attempt Only Four Case Study

CASE 1: The McGee Cake Company

In early 2001, Doc and Lyn McGee formed McGee Cake Company. The company produced a full line of cakes, and its specialties included chess cake, lemon pound cake, and double-iced, double-chocolate cake. The couple formed the company as an outside interest, and both continued to work at their current jobs. Doc did all the baking, and Lyn handled the marketing and distribution. With good product quality and a sound marketing plan, the company grew rapidly. In early 2006, the company was featured in a widely distributed entrepreneurial magazine. Later that year, the company was featured in Gourmet Desserts, a leading specialty food magazine. After the article appeared in Gourmet Desserts, sales exploded, and the company began receiving orders from all over the world.

Because of the increased sales, Doc left his other job, followed shortly by Lyn. The company hired additional workers to meet demand. Unfortunately, the fast growth experienced by the company led to cash flow and capacity problems. The company is currently producing as many cakes as possible with the assets it owns, but demand for its cakes is still growing. Further, the company has been approached by a national supermarket chain with a proposal to put four of its cakes in all the chain’s stores, and a national restaurant chain has contacted the company about selling McGee cakes in its restaurants. The restaurant would sell the cakes without a brand name.

Doc and Lyn have operated the company as a sole proprietorship. They have approached you to help manage and direct the company’s growth. Specifically, they have asked you to answer the following questions:

1. What are the advantages and disadvantages of changing the company organization from a sole proprietorship to an LLC?
   
2. What are the advantages and disadvantages of changing the company organization from a sole proprietorship to a corporation?
   
3. Ultimately, what action would you recommend the company undertake? Why?

CASE 2: Ration Analysis at S&S Air, Inc.

Chris Guthrie was recently hired by S&S Air, Inc., to assist the company with its financial planning and to evaluate the company’s performance. Chris graduated from college five years ago with a finance degree. He has been employed in the finance department of a Fortune 500 company since then.

S&S Air was founded 10 years ago by friends Mark Sexton and Todd Story. The company has manufactured and sold light airplanes over this period, and the company’s products have received high reviews for safety and reliability. The company has a niche market in that it sells primarily to individuals who own and fly their own planes. The company has two models; the Birdie, which sells for $53,000, and the Eagle, which sells for $78,000.

Although the company manufactures aircraft, its operations are different from commercial aircraft companies. S&S Air builds aircraft to order. By using prefabricated parts, the company can complete the manufacture of an airplane in only five weeks. The company also receives a deposit on each order, as well as another partial payment before the order is complete. In contrast, a commercial air-plane may take one and one-half to two years to manufacture once the order is placed.

Mark and Todd have provided the following financial statements. Chris has gathered the industry ratios for the light airplane manufacturing industry.

S&S Air, Inc. 2006 Income Statement

Sales                                                   $21,785,300 Cost of goods sold                                15,874,700 Other expenses                                        2,762,500 Depreciation                                               976,200 EBIT                                                     $ 2,171,900 Interest                                                        341,600 Taxable income                                    $ 1,830,300 Taxes (40%)                                                732,120 Net income                                            $ 1,098,180 Dividends                           $439,272 Add to retained earnings      658,908

S&S Air, Inc. 2006 Balance Sheet
Assets                                                   Liabilities and Equity
Current assets Cash Account receivable Inventory Total current assets Fixed assets Net plant and equipment Total assets	$     315,000        506,000        740,800 $  1,561,800 $11,561,000 $13,077,800	Current liabilities Accounts payable Notes payable Total current liabilities Long-term debt Shareholder equity Common stock Retained earnings Total equity Total liabilities and equity	$   635,000   1,450,000 $2,085,000 $3,800,000 $    250,000    6,942,800 $ 7,192,800 $13,077,800

Light airplane Ratios
	Lower Quartile	Median	Upper Quartile
Current ratio Quick ratio Cash ratio Total asset turnover Inventory turnover Receivables turnover Total debt ratio Debt-equity ratio Equity multiplier Times interest earned Cash coverage ratio Profit margin Return on assets Return on equity	0.50 0.21 0.08 0.68 4.89 6.27 0.44 0.79 1.79 5.18 5.84 4.05% 6.05% 9.93%	1.43 0.38 0.21 0.85 6.15 9.82 0.52 1.08 2.08 8.06 8.43 6.98% 10.53% 16.54%	1.89  0.62  0.39  1.38 10.89 14.11  0.61  1.56  2.56  9.83 10.27 9.87% 13.21% 26.15%

Questions:

1. Using the financial statements provided for S&S Air, calculate each of the ratios listed in the table for the light aircraft industry.
   
2. Mark and Todd agree that a ratio analysis can provide a measure of the company’s performance. They have chosen Boeing as an aspirant company. Would you choose Boeing as an aspirant company? Why or why not? There are other aircraft manufacturers S&S Air could use as aspirant companies. Discuss whether it is appropriate to use any of the following companies: Bombardier, Embraer, Cirrus Design Corporation, and Cessna Aircraft Company.
   
3. Compare the performance of S&S Air to the industry. For each ratio, comment on why it might be viewed as positive or negative relative to the industry. Suppose you create an inventory ratio calculated as inventory divided by current liabilities. How do you think S&S Air’s ratio would compare to the industry average?

CASE 3: The MBA Decision

Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal. After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College. Although internships are encouraged by both schools, to get class credit for the internship, neither school will allow its student to work while enrolled in its MBA program.

Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $50,000 per year, and his salary is expected to increase at 3 percent per year until retirement. He is currently 28 years old and expects to work for 35 more years. His current job includes a fully paid health insurance plan, and his current average tax rate is 26 percent. Ben has a savings account with enough money to cover the entire cost of his MBA program.

The Ritter College of Business at Wilton University is one of the top MBA programs in the country. The MBA degree requires two years of full-time enrollment at the university. The annual tuition is $60,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $2,500 per year. Ben expects that after graduation from Wilton, he will receive a job offer for about $95,000 per year, with a $15,000 signing bonus. The salary at this job will increase at 4 percent per year. Because of higher salary, his average income tax rate will increase to 31 percent.

The Bradley School of Business at Mount Perry College began its MBA program 16 years ago. The Bradley School is smaller and less well known than the Ritter College. Bradley offers an accelerated one-year program, with a tuition cost of $75,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $3,500. Ben thinks that he will receive an offer of $78,000 per year upon graduation, with a $10,000 signing bonus. The salary at this job will increase at 3.5 percent per year. His average tax rate level of income will be 29 percent.

Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Ben also estimates that room and board expenses will cost $20,000 per year at both schools. The appropriate discount rate is 6.5 percent.

 Questions

1. How does Ben’s age affect his decision to get an MBA?
   
2. What other, perhaps nonquantifiable, factors affect Ben’s decision to get an MBA?
   
3. Assuming all salaries are paid at the end of each year, what is the best option for Ben from a strictly financial standpoint?
   
4. Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement?
   
5. What initial salary would Ben need to receive to make him indifferent attending Wilton University and staying in his current position?
   
6. Suppose, instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 5.4 percent. How would this affect his decision?

CASE – 4        Bullock Gold Mining

Seth Bullock, the owner of Bullock Gold Mining is evaluating a new gold mine in South Dakota. Dan Dority, the company’s geologist, has just finished his analysis of the mine site. He has estimated that the mine would be productive for eight years, after which the gold would be completely mined. Dan has taken an estimate of the gold deposits to Alma Garrett, the company’s financial officer. Alma has been asked by Seth perform an analysis of the new mine and present her recommendation on whether the company should open the new mine.

Alma has used the estimates provided by Dan to determine the revenues that could be expected from the mine. She has also projected the expense of opening the mine and the annual operating expenses. If the company opens the mine, it will cost $500 million today, and it will have a cash flow of $80 million nine years from today costs associated with closing the mine and reclaiming the area surrounding it. The expected cash flows each year from the mine are shown in the table. Bullock Mining has a 12 percent required return on all of its gold mines.

Year	Cash Flow
0 1 2 3 4 5 6 7 8 9	─$500,000,000        60,000,000        90,000,000      170,000,000      230,000,000      205,000,000      140,000,000      110,000,000        70,000,000     ─80,000,000

Question:

1. Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and net present value of the proposed mine.

2. Based on your analysis, should the company open the mine?

3. Bonus question: Most spreadsheets do not have a built-in formula to calculate the payback period. Write a VBA script that calculates the payback period for a project.

CASE 5: The Beta for American Standard

Joey Moss, a recent finance graduate, has just begun his job with the investment firm of Covili and Wyatt. Paul Covili, one of the firm’s founders, has been talking to Joey about the firm’s investment portfolio.

As with any investment, Paul is concerned about the risk of the investment as well as the potential return. More specially, because the company holds a diversified portfolio, Paul is concerned about the systematic risk of current and potential investments. One position the company holds is stock in American Standard (ASD). American Standard manufactures air conditioning systems, bath and kitchen fixtures and fittings and vehicle control systems. Additionally, the company offers commercial and residential heating, ventilation, air conditioning equipment, systems, and controls.

Covili and Wyatt currently uses a commercial data vendor for information about its positions. Because of this, Paul is unsure exactly how the numbers provided are calculated. The data provider considers its methods proprietary, and it will not disclose how stock betas and other information are calculated. Paul is uncomfortable with not knowing exactly how these numbers are being computed and also believes that it could be less expensive to calculate the necessary statistics in-house. To explore this question, Paul has asked Joey to do the following assignments:

1. Go to finance.yahoo.com and download the ending monthly stock prices for American Standard (ASD) for the last 60 months. Also, be sure to download the dividend payments over this period as well. Next, download the ending value of the S&P 500 index over the same period. For the historical risk-free rate, go to the St. Louis Federal Reserve Web site (www.stlouisfed.org) and find the three-month Treasury bill secondary market rate. Download this file. What are the monthly returns, average monthly returns, and standard deviation for American Standard stock, the three-month Treasury bill, and the S&P 500 for this period?
   
2. Beta is often estimated by linear regression. A model often used is called the market model, which is:
    Rt ─ R¦t  = αi + Βi  [RMt ─ R¦t] + εt
   In this regression, Rt is the return on the stock and R¦t  is the risk-free rate for the same period. RMt is the return on a stock market index such as the S&P 500 index. αi is the regression intercept, and Βi is the slope (and the stock’s estimated beta). εt represents the residuals for the regression. What do you think is the motivation for this particular regression? The intercept αi is often called Jensen’s alpha. What does it measure? If an asset has a positive Jensen’s alpha, where would it plot with respect to the SML? What is the financial interpretation of the residuals in the regression?
   
3. Use the market model to estimate the beta for American Standard using the last 36 months of returns (the regression procedure in Excel is one easy way to do this). Plot the monthly returns on American Standard against the index and also show the fitted line.
   
4. When the beta of a stock is calculated using monthly returns, there is a debate over the number of months that should be used in the calculation. Rework the previous questions using the last 60 months of returns. How does this answer compare to what you calculated previously? What are some arguments for and against using shorter versus longer periods? Also, you’ve used monthly data, which are common choice. You could have used daily, weekly, quarter, or even annual data. What do you think are the issues here?
   
5. Compare your beta for American Standard to the beta you find on finance.yahoo.com. How similar are they? Why might they be different?

Note: Solve any 8 out of 10.

1. (a) Discuss the term ‘Continuing Guarantee’. How can it be revoked?
   • 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.
   1. Non-registration of a firm.
   2. Capacity of Contract

• Kinds of Bailment.

1. Anticipatory breach of a Contract.

6. a) When is a Surety Discharged from Liability by the conduct of the creditor.
7. 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.
8. b) What is ‘Supervening Impossibility’? What are its effect upon the contract?
9. c) What are the remedies available to the buyer when goods in wrong quantity     

                    delivered to him?

1. 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?
10. b) Distinguish between:
11. i) Novation and Alteration.
12. ii) Liquidated damages and penalty

COST AND ACCOUNTING 

Note : Solve any 8 questions out of 10.

1. “Management accounting is a mid-way between financial and cost accounting.” Elucidate.

1. What is the major revenue recognition criterion?

1. What is a trading account? What are its major constituents? What is its major outcome?

1. The cash flow statement is as useful to shareholders and lenders as to management. Explain.

1. (a) “All future costs are relevant.” Do you agree? Why?

(b) “Fixed costs are really variable. The more you produce the less they become.”                                   

                    Do you agree? Explain.

1. In connection with inventory ordering and control, certain terms are basic. Explain the meaning of each of the following:
1. Economic order quantity
2. Re-order point
3. Lead time
4. Safety stock

     

1. What is meant by under/over-absorption of factory overheads? How will you account for them in cost accounts? Does it bear any impact while submitting quotations?

1. A manufacturing company operating a system of budgetary control finds that their production capacity during the year varies between 75 per cent and 90 per cent as against the budgeted capacity of 80 per cent for the year. It has been suggested that a system budgets should be introduced to effectively control costs. Outline the steps you would take to implement this suggestion keeping in mind that the management would still require periodic comparison with their overall budget during the year.

1. “Transfer prices must always be equal to externally determined market of comparative products or services.” Comment fully.

COOKING LPG LTD

DETERMINATION OF WORKING CAPTIAL

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 10^th 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 7^th 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 10^th of the subsequent month.
• Regular maintenance of plant – Rs. 50,000 per month paid on the 10^th 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 15^th of the subsequent month.
• All transportation charges as per contracts – paid on the 10^th subsequent month.
• Sales tax as per applicable rates is deposited on the 7^th 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 working capital?

1. 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 option
January	Rs. 6,00,000	Rs. 9,00,000
February	4,00,000	6,00,000
March	3,00,000	4,50,000
April	2,00,000	3,00,000
May	2,00,000	3,00,000
June	1,50,000	2,25,000
July	1,50,000	2,25,000
August	2,00,000	3,00,000
September	3,00,000	4,50,000
October	5,00,000	7,50,000
November	5,00,000	15,00,000
December	8,00,000	12,00,000
Total Sales	48,00,000	72,00,000
Fixed 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.

(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.

Attempt Only Four Case Study

CASE – 1

You are the CFO of a large Indian pharmaceutical company. Over the last five years your company has grown, primarily through overseas acquisitions. You started acquiring companies in Europe and North America in 2000.

Your balance sheet on March 2005 has assets equivalent of US$200 million, including those of your subsidiaries.

In the last board meeting, a presentation made by your European subsidiary painted a worrisome picture. This bulk drug manufacturing facility sources its raw materials from a small South African country, which is facing political unrest. This means that the reliability of this source of raw material, in the days to come, is poor. Your subsidiary is keen to source this material from a small Taiwanese firm. This Taiwanese firm is willing to supply the raw material but wants payment in US dollars for the January to June 2006 period; in euros for the July to December 2006 period through its Cayman Island bank account.

If this supply contract clicks, it could mean at least two things: one, getting a reliable supplier, and two, opening a link in the Far East market.

You are preparing to present a case for this supply contract to the top management. You search the web to get some data on USD/INR and Europe/INR behaviour.

Question:

What are the issues that you will take into account and what is the likely response from the board members?

MARKETING MANAGEMENT IIBM ONGOING EXAM ANSWER SHEETS PROVIDED WHATAPP 91 9924764558

MARKETING MANAGEMENT IIBM ONGOING EXAM ANSWER SHEETS PROVIDED WHATAPP 91 9924764558

CONTACT:

PRASANTH BE MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

 
Marketing Management
Section A: Objective Type (30 marks)
 This section consists of Multiple Choices & Short Notes type Questions.
 Answer all the Questions.
 Part one carries 1 mark each & Part Two carries 4 marks each.
Part one:
Multiple choices:
1. It is a concept where goods are produced without taking into consideration the choices or tastes of customers.
a. Marketing mix
b. Production concept
c. Marketing concept
d. Relationship marketing
2. It involves individuals who buys products or services for personal use and not for manufacture or resale.
a. Environment analysis
b. Macro environment
c. Micro environment
d. Consumer
3. It is the groups of people who interact formally or informally influencing each other’s attitudes& behavior.
a. Consumer behavior
b. Culture
c. Reference groups
d. Primary groups
4. The concept of the product that passes through various changes in its total life known as:
a. Product life cycle
b. Line stretching
c. Consumer adoption
d. Product
5. It refers to unique set of brand associations that brand strategist aspires to create or maintain:
a. Branding
b. Packaging
c. Brand identity
d. Brand image
Examination Paper of Marketing Management
IIBM Institute of Business Management 2
6. It involves a pricing strategy that charges customers different prices for the same product or service.
a. Promotional pricing
b. Price discrimination
c. Non price competition
d. None of the above
7. It refers to an arrangement where another company through its own marketing channel sells the products of one producers.
a. End customer
b. Wholesaler
c. Retailing
d. Strategic channel alliance
8. It involves facility consisting of the means & equipments necessary for the movement of passengers of goods.
a. Logistics
b. Warehousing
c. Transportation
d. None of the above
9. The advertising which is used to inform consumers about a new product or feature & to build primary demands is known as:
a. Advertising
b. Informative advertising
c. Persuasive advertising
d. Advertising strategy
10. An art that predicts the likelihood of economic activity on the basis of certain assumptions:
a. Compensation
b. Sales forecasting
c. Sales budgeting
d. Selling policy
Part Two:
1. Write a note on importance of consumer behavior for a business firm.
2. Define the term ‘Price’.
3. Distinguish between Marketing Concept and Selling Concept.
4. What are the new trends in advertisement?
5. Briefly explain the following :
a) Socio –culture environment
b) Marketing environment interface.
END OF SECTION A
Examination Paper of Marketing Management
IIBM Institute of Business Management 3
Section B: Case lets (40 marks)
 This section consists of Case lets.
 Answer all the questions.
 Each Case let carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200 words).
Case let 1
Ask the company top brass what ‘almost there’ means. The answer: a premier Indian retail company that has come to be known as a specialty chain of apparel and accessories. With 52 product categories under one roof, Shoppers’ Stop has a line-up of 350 brands. Set up and headed by former Corona employee, B. S. Nagesh, Shoppers’ Stop is India’s answer to Selfridges and Printemps. As it proudly announces, ‘We don’t sell, we help you buy.’ Back in 1991, there was the question of what to retail. Should it be a supermarket or a departmental store? Even an electronics store was considered. Finally, common sense and understanding won out. The safest bet, for the all-male team was to retail men’s wear. They knew the male psyche and felt that they had discerning taste in men’s clothing. The concept would be that of a lifestyle store in a luxurious space, which would make for a great shopping experience. The first Shoppers’ Stop store took shape in Andheri, Mumbai, in October 1991, with an investment of nearly Rs. 20 lakh. The original concept that formed the basis of a successful marketing campaign for seven years is here to stay. And the result is an annual turnover of Rs. 160 crores and five stores, nine years later. Everything went right from the beginning, except for one strange happening. More than 60 per cent of the customers who walked into Shoppers’ Stop in Mumbai were women. This gave rise to ideas. Soon, the store set up its women’s section. Later, it expanded to include children’s wear and then, household accessories. The second store in Bangalore came in 1995. The store at Hyderabad followed in 1998 with the largest area of 60,000 sq. ft. The New Delhi and Jaipur stores were inaugurated in 1999. All this while, the product range kept increasing to suit customer needs. The most recent experiment was home furnishings. Secure in the knowledge that organized retailing in global brands was still in its infancy in India, Shoppers’ Stop laid the ground rules which the competition followed. The biggest advantage for Shoppers’ Stop is that it knows how the Indian consumer thinks and feels while shopping. Yes, feeling – for in India, shopping remains an outing. And how does it compare itself to foreign stores? While it is not modeled on any one foreign retailer, the ‘basic construct’ is taken from the experience of a number of successfully managed retail companies. It has leveraged expertise for a critical component like technology from all over the world, going as far as hiring expatriates from Littlewoods and using state-of-the-art ERP models. Shoppers’ Stop went a step further by even integrating its financial system with the ERP model. Expertise was imported wherever it felt that expertise available in-house was inadequate. But the store felt there was one acute problem. A shortage of the most important resource of them all was trained humans. Since Indian business institutes did not have professional courses in retail management, people were hired from different walks of life and the training programme was internalized. By 1994, the senior executives at Shoppers’ Stop were taking lectures at management institutes in Mumbai. The Narsee Monjee Institute of Management Studies (NMIMS) even restructured its course to include retail management as a subject. Getting the company access to the latest global retail trends and exchange of information with business greats was an exclusive membership to the Intercontinental Group of Department Stores (IGDS). It allows membership by invitation to one company from a country and Shoppers’ Stop rubs shoulders with 29 of the hottest names in retailing – Selfridges from the UK, C.K. Tang from Singapore, Lamcy Plaza from Dubai and the like. With logistics I in place, the accent moved to the customer. Shoppers’ Stop conducted surveys with ORG-MARG and Indian Market Research Bureau (IMRB) and undertook in-house wardrobe audits. The studies confirmed what it already knew. The Indian customer is still evolving and is very different from, say, a European customer, who knows exactly what he wants to purchase, walks up to a shelf, picks up the merchandise, pays and walks out. In India, customers like to touch and feel the
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merchandise, and scout for options. Also, the majority of Indian shoppers still prefer to pay in cash. So, transactions must be in cash as against plastic money used the world over. Additionally, the Indian customer likes being served – whether it is food, or otherwise. The company’s customer profile includes people who want the same salesperson each time they came to the store to walk them through the shop floors and assist in the purchase. Others came with families, kids and maids in tow and expected to be suitably attended to. Still others wanted someone to carry the bags. So, the shops have self-help counters, with an assistant at hand for queries or help. The in-house wardrobe audit also helped with another facet of the business. It enabled Shoppers’ Stop to work out which brands to stock, based on customer preferences. In fact, the USP of Shoppers’ Stop lies in judiciously selected global brands, displayed alongside an in-house range of affordable designer wear. The line-up includes Levi’s, Louis Philippe, Allen Solly, Walt Disney, Ray Ban and Reebok, besides in-house labels STOP and I. Brand selection is the same across the five locations, though the product mix may be somewhat city-based to accommodate cuts and styles in women’s wear, as well as allowing for seasonal variations (winter in Delhi, for instance, is a case in point). Stocking of brands is based on popular demand – recently, Provogue, MTV Style, and Benetton have been added. In-house labels are available at competitive prices and target the value-for-money customer and make up around 12 per cent of Shoppers’ Stop’s business. Sometimes in-house brands plug the price gap in certain product categories. To cash in on this, the company has big plans for its in-house brands: from re-branding to repositioning, to homing in on product categories where existing brands are not strong. Competition between brands is not an issue, because being a trading house, all brands get equal emphasis. The in-house brand shopper is one who places immense trust in the company and the quality of its goods and returns for repeat buys. And the company reposed its faith in regular customers by including them in a concept called the First Citizen’s Club (FCC). With 60,000 odd members, FCC customers account for 10 per cent of entries and for 34 per cent of the turnover. It was the sheer appeal of the experience that kept pulling these people back. Not one to let such an opportunity pass, the company ran a successful ad campaign (that talks about just this factor) in print for more than eight years. The theme is still the same. In 1999, a TV spot, which liked the shopping experience to the slowing down of one’s internal clock and the beauty of the whole experience, was aired. More recently, ads that spell out the store’s benefits (in a highly oblique manner) are being aired.
The campaign is based on entries entered in the Visitors’ Book. None of the ads has a visual or text – or any heavy handedly direct reference to the store or the merchandise. The ads only show shoppers having the time of their lives in calm and serene locales, or elements that make shopping at the store a pleasure – quite the perfect getaway for a cosmopolitan shopper aged between 25 and 45. The brief to the agency, Contract, ensured that brand recall came in terms of the shopping experience, not the product. And it has worked wonders. Value-addition at each store also comes in the form of special care with car parks, power backup, customer paging, alteration service and gift-wrapping. To top it all, cafes and coffee bars make sure that the customer does not step out of the store. In Hyderabad, it has even created a Food Court. Although the food counter was not planned, it came about as there was extra space of 67,000 sq. ft. Carrying the perfect experience to the shop floor is an attempt to stack goods in vast open spaces neatly. Every store has a generic structure, though regional customer variances are accounted for. Each store is on lease, and this is clearly Shoppers’ Stop’s most expensive resource proposition – renting huge spaces in prime properties across metros, so far totaling 210,000 sq. ft of retail space. Getting that space was easy enough for Shoppers’ Stop, since its promoter is the Mumbai-based Raheja Group, which also owns 62 per cent of the share capital.
Questions:
1. What are the significant factors that have led to the success of Shoppers’ Stop?
2. Draw the typical profile(s) of Shoppers’ Stop customer segments.
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3. How are Indian customers visiting Shoppers’ stop any different from customers of developed western countries?
4. How should Shoppers’ Stop develop its demand forecasts?
Case let 2
The rise of personal computers in the mid 1980s spurred interest in computer games. This caused a crash in home Video game market. Interest in Video games was rekindled when a number of different companies developed hardware consoles that provided graphics superior to the capabilities of computer games. By 1990, the Nintendo Entertainment System dominated the product category. Sega surpassed Nintendo when it introduced its Genesis System. By 1993, Sega commanded almost 60 per cent of Video game market and was one of the most recognized brand names among the children. Sega’s success was short lived. In 1995, Saturn (a division of General Motors) launched a new 32-bit system. The product was a miserable failure for a number of reasons. Sega was the primary software developer for Saturn and it did not support efforts by outside game developers to design compatible games. In addition, Sega’s games were often delivered quite late to retailers. Finally, the price of the Saturn system was greater than other comparable game consoles. This situation of Saturn’s misstep benefited Nintendo and Sony greatly. Sony’s Play Station was unveiled in 1994 and was available in 70 million homes worldwide by the end of 1999. Its “Open design” encouraged the efforts of outside developers, resulting in almost 3,000 different games that were compatible with the PlayStation. It too featured 32-bit graphics that appealed to older audience. As a result, at one time, more than 30 per cent of PlayStation owners were over 30 years old. Nintendo 64 was introduced in 1996 and had eye-popping 64-bit graphics and entered in more than 28 million homes by 1999. Its primary users were between the age of 6 and 13 as a result of Nintendo’s efforts to limit the amount of violent and adult-oriented material featured on games that can be played on its systems. Because the company exercised considerable control over software development, Nintendo 64 had only one-tenth the number of compatible games as Sony’s PlayStation did. By 1999, Sony had captured 56 per cent of the video game market, followed by Nintendo with 42 per cent. Sega’s share had fallen to a low of 1%. Hence, Sega had two options, either to concede defeat or introduce an innovative video machine that would bring in huge sales. And Sega had to do so before either Nintendo or Sony could bring their next-generation console to market. The Sega Dreamcast arrived in stores in September 1999 with an initial price tag of $199. Anxious gamers placed 300,000 advance orders, and initial sales were quite encouraging. A total of 1.5 million Dreamcast machines were bought within the first four months, and initial reviews were positive. The 128-bit system was capable of generating 3-D visuals, and 40 different games were available within three months of Dream cast’s introduction. By the end of the year, Sega had captured a market share to 15 per cent. But the Dreamcast could not sustain its momentum. Although its game capabilities were impressive, the system did not deliver all the functionality Sega had promised. A 56K modem (which used a home phone line) and a Web browser were meant to allow access to the Internet so that gamers could play each other online, surf the Web, and visit the Dreamcast Network for product information and playing tips. Unfortunately, these features either were not immediately available or were disappointing in their execution. Sega was not the only one in having the strategy of adding functionality beyond games. Sony and Nintendo followed the same approach for their machines introduced in 1999. Both Nintendo’s Neptune and Sony’s PlayStation 2 (PS2) were built on a DVD platform and featured a 128-bit processor. Analysts applauded the move to DVD because it is less expensive to produce and allows more storage than CDs. It also gives buyers the ability to use the machine as CD music player and DVD movie player. As Sony marketing director commented, “The full entertainment offering from Play Station 2 definitely appeals to a much broader audience. I have friends in their 30s who bought it not only because it’s a gaming system for their kids, but also a DVD for them.” In addition, PlayStation 2 is able to play games developed for its earlier model that was CD-based. This gives the PS2 an enormous advantage in the number of compatible game titles
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that were immediately available to gamers. Further enhancing the PS2’s appeal is its high-speed modem and allows the user’s easy access to the Internet through digital cable as well as over telephone lines. This gives Sony the ability to distribute movies, music, and games directly to PS2 consoles. “We are positioning this as an all-round entertainment player,” commented Ken Kutaragi, the head of Sony Computer Entertainment. However, some prospective customers were put off by the console’s initial price of $360. Shortly after the introduction of Neptune, Nintendo changed its strategies and announced the impending release of its newest game console, The GameCube. However, unlike the Neptune, the GameCube would not run on a DVD platform and also would not initially offer any online capabilities. It would be more attractively priced at $199. A marketing vice president for Nintendo explained the company’s change in direction, “We are the only competitor whose business is video games. We want to create the best gaming system.” Nintendo also made the GameCube friendly for outside developers and started adding games that included sports titles to attract an older audience. Best known for its extra ordinary successes with games aimed at the younger set, such as Donkey Kong, Super Mario Bros, and Pokemon, Nintendo sought to attract older users, especially because the average video game player is 28. Youthful Nintendo users were particularly pleased to hear that they could use their handheld Game Boy Advance systems as controllers for the GameCube. Nintendo scrambled to ensure there would be an adequate supply of Game Cubes on the date in November 2001, when they were scheduled to be available to customers. It also budgeted $450 million to market its new product, as it anticipated stiff competition during the holiday shopping season. With more than 20 million PlayStation 2 sold worldwide, the GameCube as a new entry in the video game market would make the battle for market share even more intense. For almost a decade, the video game industry had only Sega, Nintendo, and Sony; just three players. Because of strong brand loyalty and high product development costs, newcomers faced a daunting task in entering this race and being competitive. In November 2001, Microsoft began selling its new Xbox, just three days before the GameCube made its debut. Some observers felt the Xbox was aimed to rival PlayStation 2, which has similar functions that rival Microsoft’s Web TV system and even some lower level PCs. Like the Sony’s PlayStation 2, Xbox was also built using a DVD platform, but it used an Intel processor in its construction. This open design allowed Microsoft to develop the Xbox in just two years, and gave developers the option of using standard PC tool for creating compatible games. In addition, Microsoft also sought the advice of successful game developers and even incorporated some of their feedback into the design of the console and its controllers. As a result of developers’ efforts, Microsoft had about 20 games ready when the Xbox became available. By contrast, the GameCube had only eight games available. Microsoft online strategy was another feature that differentiated of the Xbox from the GameCube. Whereas Nintendo had no immediate plans for Web-based play, the Xbox came equipped with an Ethernet port for broadband access to Internet. Microsoft also announced its own Web-based network on which gamers can come together for online head-to head play and for organized online matches and tournaments. Subscribers to this service were to pay a small monthly fee and must have high-speed access to the Internet. This is a potential drawback considering that a very low percentage of households world over currently have broadband connections. By contrast Sony promoted an open network, which allows software developers to manage their own games, including associated fees charged to users. However, interested players must purchase a network adapter for an additional $39.99. Although game companies are not keen on the prospect of submitting to the control of a Microsoft-controlled network, it would require a significant investment for them to manage their own service on the Sony-based network. Initially the price of Microsoft’s Xbox was $299. Prior to the introduction of Xbox, in a competitive move Sony dropped the price of the PlayStation 2 to $299. Nintendo’s GameCube already enjoyed a significant price advantage, as it was selling for $100 less than either Microsoft or Sony products. Gamers eagerly snapped up the new consoles and made 2001 the best year ever for video game sales. For the first time, consumers spent $9.4 billion on video game equipment, which was more than they did at the box office. By the end of 2001 holiday season, 6.6 million PlayStation 2 consoles had been sold in North America alone, followed by 1.5 million Xbox units and 1.2 million Game Cubes. What ensued was an all out price war. This started when Sony decided to put even more pressure on the Microsoft’s Xbox by cutting the PlayStation 2 price to $199. Microsoft quickly matched that price.
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Wanting to maintain its low-price status, Nintendo in turn responded by reducing the price of its the GameCube by $50, to $149. By mid 2002, Microsoft Xbox had sold between 3.5 and 4 million units worldwide. However, Nintendo had surpassed Xbox sales by selling 4.5 million Game Cubes. Sony had the benefit of healthy head start, and had shipped 32 million PlayStation 2s. However, seven years after the introduction of original PlayStation, it was being sold in retail outlets for
a mere $49. It had a significant lead in terms of numbers of units in homes around the world with a 43 per cent share. Nintendo 64 was second with 30 per cent, followed by Sony PlayStation 2 with 14 per cent. The Xbox and GameCube each claimed about 3 per cent of the market, with Sega Dreamcast comprising the last and least market share of 4.7 per cent. Sega, once an industry leader, announced in 2001 that it had decided to stop producing the Dreamcast and other video game hardware components. The company said it would develop games for its competitors’ consoles. Thus Sega slashed the price of the Dreamcast to just $99 in an effort to liquidate its piled up inventory of more than 2 million units and immediately began developing 11 new games for the Xbox, four for PlayStation 2, and three for Nintendo’s Game Boy Advance. As the prices of video game consoles have dropped, consoles and games have become the equivalent of razors and blades. This means the consoles generate little if any profit, but the games are a highly profitable proposition. The profit margins on games are highly attractive, affected to some degree by whether the content is developed by the console maker (such as Sony) or by an independent game publisher (such as Electronic Arts). Thus, the competition to develop appealing, or perhaps even addictive, games may be even more intense than the battle among players to produce the best console. In particular, Nintendo, Sony, and Microsoft want games that are exclusive to their own systems. With that in mind, they not only rely on large in-house staffs that design games but they also pay added fees to independent publishers for exclusive rights to new games. The sales of video games in 2001 rose to 43 per cent, compared to just 4 per cent increase for computer-based games. But computer game players are believed to be a loyal bunch, as they see many advantages in playing games on their computers rather than consoles. For one thing, they have a big advantage of having access to a mouse and a keyboard that allow them to play far more sophisticated games. In addition, they have been utilizing the Internet for years to receive game updates and modifications and to play each other over the Web. Sony and Microsoft are intent on capturing a portion of the online gaming opportunity. Even Nintendo has decided to make available a modem that will allow GameCube users to play online. As prices continue to fall and technology becomes increasingly more sophisticated, it remains to be seen whether these three companies can keep their names on the industry’s list of “high scorers”.
Questions:
1. Considering the concept of product life cycle, where would you put video games in their life cycle?
2. Should video game companies continue to alter their products to include other functions, such as e-mail?
END OF SECTION B
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IIBM Institute of Business Management 8
Section C: Applied Theory (30 marks)
 This section consists of Applied Theory Questions.
 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 200-250 words).
1. What is meant by sales promotion? Describe briefly the various methods of sales promotional tools used by business organizations to boost the sales. Explain any four methods of sales promotion?
2. Write notes on the fowling :
a) Explain right to safety.
b) What is right to consumer protection?
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END OF SECTION C

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HUMAN RESOURCE MANAGEMENT IIBM ONGOING EXAM ANSWER SHEET PROVIDED WHATAPP 91 9924764558

CONTACT;

PRASANTH BE MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

Human Resource Management
Section A: Objective Type (30 marks)
 This section consists of multiple choice & Short Notes type questions.
 Answer all the questions.
 Part one carries 1 mark each & Part two carries 5 marks each.
Part One:
Multiple choices:
1. It is a cultural attitude marked by the tendency to regard one’s own culture as superior to others.
a. Geocentrism
b. Polycentrism
c. Ethnocentrism
d. Egocentrism
2. It is the systemic study of job requirements & those factors that influence the performance of those job requirements.
a. Job analysis
b. Job rotation
c. Job circulation
d. Job description
3. This Act provides an assistance for minimum statutory wages for scheduled employment
a. Payment of Wages Act, 1936
b. Minimum Wages Act, 1948
c. Factories Act, 1948
d. Payment of Gratuity act, 1972
4. __________ is the actual posting of an employee to a specific job.
a. Induction
b. Placement
c. Attrition
d. None of the above
5. Broadening an individual’s knowledge, skills & abilities for future responsibilities is known as:
a. Training
b. Development
c. Education
d. Mentoring
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6. Change that is designed and implemented in an orderly and timely fashion in anticipation of future events.
a. Planned change
b. Technology change
c. Structural change
d. None of the above
7. It is a process for setting goals and monitoring progress towards achieving those goals:
a. Performance appraisal
b. Performance gap
c. Performance factor
d. Performance management system
8. A method which requires the rates to provide a subjective performance evaluation along a scale from low to high.
a. Assessment centre
b. Checklist
c. Rating scale
d. Monitoring
9. It is the sum of knowledge, skills, attitudes, commitment, values and the liking of the people in an organization.
a. Human resources
b. Personal management
c. Human resource management
d. Productivity
10. A learning exercise representing a real-life situation where trainees compete with each other to achieve specific objectives.
a. Executive development
b. Management game
c. Programmed learning
d. Understudy
Part Two:
1. Explain the importance of Career Planning in industry.
2. Write the features of HRM.
3. Briefly explain the concept of Performance Appraisal.
4. Explain On-Job and Off Job Training.
END OF SECTION A
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IIBM Institute of Business Management 3
Section B: Case lets (40 marks)
 This section consists of Case lets.
 Answer all the questions.
 Each Case let carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150-200 words).
Case let 1
Trust them with knee-jerk reactions," said Vikram Koshy, CEO, Delta Software India, as he looked at the quarterly report of Top Line Securities, a well-known equity research firm. The firm had announced a downgrade of Delta, a company listed both on Indian bourses and the NASDAQ. The reason? "One out of every six development engineers in the company is likely to be benched during the remaining part of the year." Three analysts from Top Line had spent some time at Delta three weeks ago. Koshy and his team had explained how benching was no different from the problems of excess inventory, idle time, and surplus capacity that firms in the manufacturing sector face on a regular basis, "Delta has witnessed a scorching pace of 30 per cent growth during the last five years in a row," Koshy had said, "What is happening is a corrective phase." But, evidently, the analysts were unconvinced.
Why Bench?
Clients suddenly decide to cut back on IT spends Project mix gets skewed, affecting work allocation Employee productivity is set to fall, creating slack working conditions. High degree of job specialization leads to redundancy
What are the options?
Quickly cut costs in areas which are non-core look for learning’s from the manufacturing sector Focus on alternative markets like Europe and Japan Move into products, where margins are better. Of course, the Top Line report went on to cite several other "signals," as it said: the rate of annual hike in salaries at Delta would come down to 5 per cent (from between 20 and 30 per cent last year); the entry-level intake of engineers from campuses in June 2001, would decline to 5 per cent (unlike the traditional 30 per cent addition to manpower every year); and earnings for the next two years could dip by between 10 and 12 per cent. And the loftiest of them all: "The meltdown at Nasdaq is unlikely to reverse in the near future." "Some of the signals are no doubt valid. And ominous," said Koshy, addressing his A-Team, which had assembled for the routine morning meeting. "But, clearly, everyone is reading too much into this business of benching. In fact, benching is one of the many options that our principals in the US have been pursuing as part of cutting costs right since September, 2000. They are also expanding the share of off-shore jobs. Five of our principals have confirmed that they would outsource more from Delta in India-which is likely to hike their billings by about 30 per cent. At one level, this is an opportunity for us. At another, of course, I am not sure if we should be jubilant, because they have asked for a 25-30 per cent cut in billing rates. Our margins will take a hit, unless we cut costs and improve productivity." "Productivity is clearly a matter of priority now," said Vivek Varadan, Vice-President (Operations). "If you consider benching as a non-earning mode, we do have large patches of it at Delta. As you are aware, it has not been easy to secure 70 per cent utilization of our manpower, even in normal times. I think we need to look at why we have 30 per cent bench before examining how to turn it into an asset." "There are several reasons," remarked Achyut Patwardhan, Vice-President (HR). "And a lot of it has to do with the nature of our business, which is more project-driven than product-driven. When you are managing a number of overseas and domestic projects simultaneously, as we do at Delta, people tend to go on the bench. They wait, as they complete one project, and are assigned the next. There are problems of coordination between projects, related to the logistics of moving people and resources from one customer to another. In fact, I am fine-tuning our monthly manpower utilization report to provide a breakup of bench costs into
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specifics-leave period, training programmes, travel time, buffers, acclimatization period et al." "It would be worthwhile following the business model used by US principal Techno Inc," said Aveek Mohanty, Director (Finance). "The company has a pipeline of projects, but it does not manage project by project. What it does is to slice each project into what it calls 'activities'. For example, communication networking; user interface development; scheduling of processes are activities common to all projects. People move from one project to another. It is somewhat like the Activity Based Costing. It throws up the bench time straightaway, which helps us control costs and revenue better." "I also think we should reduce our dependence on projects and move into products," said Praveen Kumar, Director (Marketing). "That is where the opportunity for brand building lies. In fact, now is the time to get our technology guys involved in marketing. Multiskilling helps reduce the bench time." "Benching has an analogy in the manufacturing sector," said Girish Shahane, Vice-President (Services). "We could look for learning's there. Many firms have adopted Just-In-Time (JIT) inventory as part of eliminating idle time. It would be worthwhile exploring the possibility of JIT. But the real learning lies in standardization of work. It is linked to what Mohanty said about managing by activities." "At a broader level, I see several other opportunities," said Koshy, "We can fill in the space vacated by US firms and move up the value chain. But before we do so, Delta should consolidate its position as the premier outsourcing centre. Since there are only two ways in which we can generate revenue-sell expertise or sell products-we should move towards a mix of both. Tie-ups with global majors will help. Now is the time to look beyond the US and strike alliances with firms in Europe- and also Japan-as part of developing new products for global markets."
Questions:
1. Should benching be a matter of concern at Delta?
2. What are the risks involved in moving from a project-centric mode to a mix of projects and products?
Case let 2
The contexts in which human resources are managed in today's organizations are constantly, changing. No longer do firms utilize one set of manufacturing processes, employ a homogeneous group of loyal employees for long periods of time or develop one set way of structuring how work is done and supervisory responsibility is assigned. Continuous changes in who organizations employ and what these employees do require HR practices and systems that are well conceived and effectively implemented to ensure high performance and continued success.
1. Automated technologies nowadays require more technically trained employees possessing multifarious skills to repair, adjust or improve existing processes. The firms can't expect these employees (Gen X employees, possessing superior technical knowledge and skills, whose attitudes and perceptions toward work are significantly different from those of their predecessor organizations: like greater self control, less interest in job security; no expectations of long term employment; greater participation urge in work activities, demanding opportunities for personal growth and creativity) to stay on without attractive compensation packages and novel reward schemes.
2. Technology driven companies are led by project teams, possessing diverse skills, experience and expertise. Flexible and dynamic organizational structures are needed to take care of the expectations of managers, technicians and analysts who combine their skills, expertise and experience to meet changing customer needs and competitive pressures.
3. Cost cutting efforts have led to the decimation of unwanted layers in organizational hierarchy in recent times. This, in turn, has brought in the problem of managing plateau employees whose careers seem to have been hit by the delivering process. Organizations are, therefore, made to find alternative career paths for such employees.
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IIBM Institute of Business Management 5
4. Both young and old workers, these days, have values and attitudes that stress less loyalty to the company and more loyalty to oneself and one's career than those shown by employees in the past, Organizations, therefore, have to devise appropriate HR policies and strategies so as to prevent the flight of talented employees
Question:
1. Discuss that technological breakthrough has brought a radical changes in HRM.
Section C: Applied Theory (30 marks)
 This section consists of Applied Theory Questions.
 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 200-250 words).
1. Several types of interviews are commonly used depending on the nature & importance of the position to be filled within an organization. Explain the different types of Interviews.
2. Explain the legal provisions regarding safety of workers.
S-2-301012
END OF SECTION B
END OF SECTION C

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CONTACT:

DR. PRASANTH BE MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

Financial Management
Answer the following question.
Q1. Compare and contrast a defined benefit and a defined contribution pension plan. (10
marks)
Q2. Describe the duties of the financial manager in a business firm. (10
marks)
Q3. Where will you show purchase of furniture in cash flow statement ? (10
marks)
Q4. Discuss how Working capital affects both the liquidity and profitability of a business (10
marks)
Q5. Different types of investments time horizons. (10
marks)
Q6. 22. A stock is expected to pay a dividend of Rs.0.75 at the end of the year. The required rate of return is ks = 10.5%,
and the expected constant growth rate is g = 6.4%. What is the stock's current price?
(10
marks)
Q7. What is the definition of management fraud? (10
marks)
Q8. Why we use WACC? (10
marks)

 Quantitative Methods
Case Studies
A monte Carlo Case Study (20
Marks)
Laura,' a 57 year old unmarried woman, earns around 68,000 dollars per year with expenditure of 37,500 dollars. She hit away
14,000 dollars each year and collected 330,000 dollars in her RRSP and TFSA, and also a rented apartment worth 250,000 dollars.
She has a iixed pension given by her employer, although it is not indicated to price rise, and Is entitled to get complete benefits of
Canada Pension Plan and Old Age Security, for retirement. She did not have a very competent portfolio: one fourth of cash is there,
and most of it was in contracted sector ETFs, single stocks and business bonds. Due to wrong entry of ETFs in the account,
unnecessary taxes were charged. Even before reconstructing Laura's portfolio,"he had to make certain that it matched with.her
financial aims. Laura's main aim was to ascertain if she could retire before the age of 65, maybe as early as 60, therefore she had to
know if her investments could produce enough flow of cash after she retires. Monte Carlo may show a top possibility of success with
the allotment of equity of 70% ot 80%. Through a risky questionnaire and art open interview, Justin Ill 'ascertain that Laura was the
best person for a portfolio of 60% fixed income and 40% equities. . Through Monte Carlo software, Justin entered the current
portfolio . size of Laura, her rate of savings, projected retirement expenditure, and other employer income and government pensions.
If Laura feels that working till the age of 63 was unpleasant, she could go for the reproduction again and with different estimation.
Increasing her anticipated returns or bringing down the rate of inflation, is only a thought, therefore, she will have to make some
stronger decisions: she will have to making some more savings, or bring down her rate of planned expenses after retirement.
Amazingly, by bringing up the allotment to fixed salary could increase her opportunity to succeed: in spite of th returns being lower
than the equities, the volatility is also less, which lessens the risk of helpless decline in the early years. At last, Laura decided to work
for 6 more years and plan her retirement at the age of 63. After this, Justin decided to help her make a fresh ETF portfolio to match
that goal: it was finalized at 30% short term business bonds, 30% GICs, and the rest of it was divided among Canadian, L'S and
global equities. Laura was able to make a notified decision through the Monte Carlo simulation, but this wasn't the end of the
procedure. In two or three years time, she will have to visit the location again to see that she is still on the right path of her retirement
goal, as many issues like, loss of job, a legacy, new connections, increase in the interest rates, all these could bring a change in the
main suppusitions 1 ; and she will have to redo her plans. The possibilities are different before the age of 63. For each added year
that Laura works, her portfolio will addition instead of a decrease and this will lead to a thrilling difference: the success rate will rise
up by 25% points if she continues to work till the age of 61 instead of 60.
Answer the following question.
Q1. How much was Laura earning at the age of 57? (Hint: 68,000 dollars per year)
CASE STUDY (20
Marks)
The cost of fuel in running of an engine is proportional to the square of the speed and is Rs 48 per hour for speed of 16 kilometers
per hour. Other expenses amount to Rs 300 per hour. What is the most economical speed?
Answer the following question.
Q1. What is most economical speed?
3/19/2019 Aeren Foundation
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Q2. What is a chi-square test?
Q3. What is sampling and what are its uses.
Q4. Is there any alternative formula to find the value of Chi-square?
Finoplastika Industries Ltd, Nigeria (20
Marks)
Time series analysis has two important aims: 1) recognizing the quality of the phenomenon shown by the series of studies, and 2)
Both the aims need the plan of the viewed time series data is recognized and somewhat officially explained: A time series is said to
be a 'collection of observations made in sequence with time'. For example: recording level of daily rainfall, periodical total domestic
product of US, and monthly strength of the. workers in Marine Corps for a specific rank and MOS. The evaluation of time series
gives instruments for picking a symbolic model and delivering forecasts. There are two sorts of times series data: • Continuous: in
this the data consists of study at every moment, for example, seismic movement recorded on a seismogram. • Discrete: the data
contains recordings taken at different periods ,like, statistics of each month crime. Until the data is absolutely haphazard, studies in
time series are usually related to each and the following studies could be partly ascertain by the last values. For instance, the reasons
pertaining to the meteorology which have an effect on the temperature for any given day tend to have some affect on the next day's
climate. Hence, the observations of the past temperature are helpful for predicting temperatures for the following days. • A time
series can be deterministic if there are no haphazard or feasible features but goes in a set and foreseeable manner. The data gathered
during the classical physics experiment like showing Newton's Law of Motion, is one example of a deterministic time series. The
stochastic type of series is more appropriate to the econometric function. Stochastic variables contain undefined or arbitrary
viewpoint. Though the worth of each study cannot be precisely foreseen, calculating the various observations could follow the
expected method. These methods can be explained through the statistical models. According to these models, studies differ
erratically on the underlying mean value whtch is the role of time. Time series data can be put in the following categories: one or
more performance factors; trend, seasonality, cyclical function and random sound. Various kinds of time series predicting models
give forecasts through extrapolating the previous performance of the values of a specified \'l!riable of interest. Consecutive study in
econometric times series are generally not free and forecast can be made on the basis of last observations. Although precise
predictions can be made with deterministic time series, predictions of stochastic time series are restricted to 'conditional statements
regarding the future on the basis of particular hypothesis.' Armstrong (2001) says, "The basic Assumption is that the variable ui!!
continue in the future as it has behaved in the past. " Particularly, the time series predictions are suitable for stochastic type of data in
which the fundamental root cause of variation like, trend, cyclical performance, seasonality, and uneven variations, do not change
radically m time. Therefore, modeling is considered to be more suitable temporarily instead of permanent predictions.
Answer the following question.
Q1.
Write briefly on time-series analysis. (Hint: recognizing the quality of the phenomenon shown by the series of
studies, and, both the aims need the plan of the viewed time series data is recognized and somewhat officially
explained)
CASE STUDY (20
Marks)
The price P per unit at which a company can sell all that it produces is given by the function P(x) = 300 — 4x. The cost function is
c(x) = 500 + 28x where x is the number of units produced. Find x so that the profit is maximum.
Answer the following question.
Q1. Find the value of x.
Q2. In using regression analysis for making predictions what are the assumptions involved.
Q3. What is a simple linear regression model?
Q4. What is a scatter diagram method?