Individual

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Individual (Ref No: 1506)

Executive Summary

Individual, The purpose of this project was to understand the process of decision making and use the different analytical tools that are used as part of quality decision making.  In this regards a major decision to be taken by the management of Anthony’s Orchard has been analysed via both quantitative and qualitative tools.

The first phase of decision-making related to the financial analysis of the current state of Anthony’s Orchard so that the financial health of the company could be known, where tools such as ratio analysis, horizontal and vertical analysis, cost volume profit analysis and sensitivity analysis were carried out. At this stage, it was revealed that the company stood at revenue of $11,005,208 and was profitable but with draining liquidity and high sensitivity. In the second phase, Individual it was revealed that the company had set target revenue of more than 25 million dollars to be achieved by 2015.

Also in this phase, the decision of purchasing the apple press was evaluated by utilizing the tools of Net Present Value (NPV), Accounting Rate of Return and Payback. Additionally budgeted financial statements were prepared so that the financial worth of the apple press could be determined and its contribution to the company’s target regarding revenue could be known.

In this regards, it was revealed that the outcome of apple press was only a marginal addition to the goal of the company and that budgets showed that profitability without the press was greater.  This decision was also supported by the resulting negative NPV and payback.  Therefore, it was recommended as part of the analysis that the company should explore and study other options for better returns.

Furthermore, in the third phase, the analysis of balanced scorecard introduced the qualitative perspective to the performance management at Anthony’s Orchard. The balanced scorecard was shown to break down the company’s revenue goal into smaller parts that were to be achieved via focusing on the four areas of financial perspective, customer focus, internal processes and learning and growth; also, it was in the area of learning and growth where the company was suggested to acquire more orchards to increase its output, a recommendation that could be utilised instead of the prevailing option of apple press.

Moreover, the next phase in the decision-making process introduced the idea of gap analysis and benchmarking in Anthony’s Orchard so that strategies to bridge the gap were explored. In the process of the analysis, it was revealed that where the company had a revenue gap of minimum $13,994,792, benchmarking meant that different strategies including using continuous improvement and quality management were utilised to increase output and lower cost by for example scrutinising the value chain and setting KPIs…