Volume 10 Issue 3
IMA Educational Case Journal
Tony Bell, Thompson Rivers University
PEREGRINE, A MANUFACTURER OF CUSTOM RETAIL DISPLAYS, HAD SEEN its production line slow to a halt when one of the company’s two CNC machines had broken down. Brian French, the company’s president, was determined to relieve the bottleneck. French believed he had three viable options: (1) buy a new CNC machine, (2) lease a new CNC machine, or (3) run an extra shift to keep his current machines working for more hours. This introductory case is based on a real-world capital budgeting decision. It requires students to use net present value calculations and consider all three options both qualitatively and quantitatively to make recommendations for French.
Realizing the Dream: Decision-Making in Action
Afua Agyekum, Ghana Institute of Management and Public Administration and Morgan State University
Nathan Austin, Morgan State University
Phyllis Keys, Morgan State University
THIS CASE DESCRIBES THE REAL DECISION-MAKING EXPERIENCE OF a small business entrepreneur whose medical facility is located in the suburbs of a major city in Ghana. This West African setting is used to contrast the use of typical quantitative analysis against the qualitative concerns that might play a role in business decisions. The economy and traditions of the local community present pricing and servicing challenges for Wallas Akorful, the sole owner of GEO Medical Laboratory. This case is distinct from most others in that it requires the application of cost-volume-profit (CVP) analysis to a service setting rather than manufacturing, and it takes place in an emerging markets region. Students are required to use CVP analysis to determine breakeven points for regular operations as well as in a special order situation for the healthcare service organization. Students are also asked to consider the qualitative issues associated with accepting a particular project.
Ethical Choices at Choice House
Paula Weller, Elon University
Linda Poulson, Elon University
Brian Nienhaus, Elon University
THE CHOICE HOUSE CASE IS DESIGNED TO EXPOSE students to internal control weaknesses and ethical issues of an actual small nonprofit and the professional skills needed to resolve these issues. Students are presented with several internal control weaknesses to analyze and are asked to recommend solutions after reviewing COSO’s Internal Control—Integrated Framework. As the controller, students must apply the IMA Statement of Ethical Professional Practice to possible ethical conflicts involving the executive director and determine how to address these issues. The students prepare a written summary of their findings with recommended solutions in a memo to the chair of the finance committee. With memo-writing requirements on the CMA® (Certified Management Accountant) and CPA (Certified Public Accountant) examinations, this case is also intended to enhance students’ written communication skills. An example memo and a grading rubric are included in this Teaching Note to simplify the grading of the memo.