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Volume 9, Issue 2

IMA Educational Case Journal
ISSN 1940-204X


Suresh Kalagnanam, University of Saskatchewan
Sumit Mitra, Indian Institute of Management, Kozhikode
Margie Parikh, Gujarat University

THE THE CASE IS UNIQUE IN TWO RESPECTS: (1) JRCPL has a strong social mis­sion in addition to its business mission. In fact, the mission and vision statements suggest that the social mission is relatively more important, and (2) the business model is unique in the sense that weavers are not employees and the manufacturing activity takes place at the grassroots level. The focus of this case is to develop a formal management control system (MCS) in an effort to balance the two potentially competing missions. Of particular importance is the development of mechanisms to enhance communication between the weaver base and office personnel, increase weaver engagement, and measure performance. Students are required to think of several elements of a management control system, including budgeting, performance measurement, action controls, and personnel controls.
Keywords: dual mission, social objectives, rurally rooted business, management control systems, incentives.
Marc Wouters, Ph.D. Professor of Management Accounting, Karlsruher Institut für Technologie (KIT), University of Amsterdam
Frank Stadtherr, Karlsruher Institut für Technologie (KIT)
Marcus Kirchberger, Ph.D., Porsche AG
COST ESTIMATION IS CENTRAL TO UNDERSTANDING complex situations. This case helps students understand how seemingly simple situations can be complex for cost estimation because of interdependencies between different cost pools. The case focuses on energy costs, and there are interdependencies because of technical relationships: one system influences the energy use and costs of another system. For example, if the air compressor uses more energy, it also radiates more heat—which increases the ventilation system’s energy use but reduces the heating system’s energy use in the winter. The case also provides an opportunity to discuss the motives of the heads of different departments and how they influence departmental priorities for achieving the company’s energy efficiency objectives. Other teaching cases covering cost estimation in the literature are noted in the references section of this Teaching Note.
Keywords: cost estimation, energy costs, responsibility accounting, regression analysis, cost drivers
Thomas Albright, Naval Postgraduate School
Bryan Hudgens, Naval Postgraduate School
Paul Juras, Babson College
Bill Petty, The University of Alabama
THE CASE IS BASED ON A REAL MANUFACTURING SITUATION; however, the company and industry are disguised. KCC manufactures a product used by an original equipment manufacturer (OEM) in building motorcycles. KCC relies on vendors to supply parts used in manufacturing its product for the OEM. Problems including management turnover, on-time delivery, and variation in the quality of purchased parts have been highlighted by its Lean supply chain. These problems (as well as increased production volumes and price concessions demanded by the OEM) have resulted in reduced profitability for a capacity-constrained KCC. What’s unique about this case is that it puts students in a situation to identify issues exposed by Lean implementation, make recommendations to management on how to increase production to meet increased demand without further investment, and do so profitably.
Keywords: JIT/JIS, Lean manufacturing, supply chain management, theory of constraints, capacity