By : Fajar Lina Nabila Noviyanti Rafsanjani Hidayat Zia Ulzhana

Group 6

Background
In 1989, Grand Jean became the worlds major apparel manufacturing

Grand Jeans

manufactures jean pants

was founded in the mid 19th century.

Question No. 1
How would you describe the goal of the company as a whole? Is this or are these the same as the goal of the companys marketing organization and the companys 25 managers of manufacturing plants? explain. answer : The main objective of company are to increase profitability and achieve higher growth. The company is striving hard to achieve cost effectiveness and high level of quality.

The goal of the companys marketing organization and companys 25 managers of manufacturing plant are different.
Companys marketing organization Companys 25 managers of manufacturing plant

As revenue center so the goal is to maximize revenue and sell what is produced Evaluate the target of sale unit and sale dollar Responsible for making demand forecasts which are used to decide the production levels of each plant.

Fulfill the budget figure and fulfill quota allocated to each plant. As expense center

Question 2
Evaluate the direct management planning and control system for the manufacturing plants and marketing department. What are the strength and weaknesses?

Strength
The company has been profitable for a long time The company has 25 manufacturing units of its own and 20 independent contractors producing efficiently and reliably for them They have developed a learning curve to develop the productions standard hours. 1 to 5 scale reward system can motivate employees work harder. Use budgeting to set the quota which can evaluate performance easily.

Weakness
There is no incentive to the manufacturing plants to exceed production. The lack of good communication between deputy director of field production with the planning of production. Calculation of standard hours are done on same scale for new and old machines which hence produces inaccurate result They are highly dependent on the outside independent contractors The reward system is not fair. There is lack of staff for some departments.

Question No. 3
Do you agree or disagree with the Concept of profit center for executing 25 Grand Jean manufacturing company? How can this approach affects the manager executives decision implementers, performance, and so on....?

Answer
Agree with the concept of profit center for the companys 25 manufacturing Grand Jean. If the manufacturing plant are considered as a profit center, the plant manager will be able to earn incentives through higher efficiency. He will be motivated to the plant quota and would not hoard the excess production, rather they will make full use of this extra production and gain maximum monetary rewards. A change in the reward system would encourage the plant managers to push to maximum production and also to minimize the cost, time, and effort to produce efficiently.

Question No. 4
If Grand Jeans manufacturing plant were treated as profit centers, three alternatives were suggested for recording revenues for each plant : 1) Use the selling price recorded by Grand Jeans sales personnel for pants sold to retailers and distributors. 2) Use full standard manufacturing cost per unit plus a fair fixed percentage markup for gross profit 3) Use the average contract price Grand Jean paid outside companies for making similar pant types. Evaluate these three alternatives, which one would you recommend ? Why is your selection the best one?

Answer
1. Using selling price recorded by Grand Jeans sales personnel for pants sold to retailers and distributors, it will not do any good either to manufacturing or to company as a whole. Because it will not leave the sales department with any margin and every department would not earn any profits.

2.

Using full standard manufacturing cost per unit plus a fair fixed percentage markup for gross profit has the advantage that there is incentive for the manufacturing department

To do well and to increase efficiency. This profit will make them work harder and attain more efficiency. 3. If we consider the option for the average contract price that Grand jeans paid, outside companies would give them the price range with very little margin to work with as the bargaining power of Grand Jeans is very high. This may lead to reduction in the quality and lead to increase number of rejections at the customer and also reduction in brand value and loss of market share to the company.

 Considering the three alternatives given to us the best one would be the cost plus fixed margin (alternatives 2), because in the alternative 2 the price will have sufficient margin as well as manufacturing department will have good incentives to do well.