...Prestige Telephone Company case study In 1999, the Government encouraged public utilities to seek new sources of revenues and profits to reduce the need for rate increases to consumers of telephone services. Prestige Telephone Co. (PTC) considered that a centralised data provider service could be a profitable use of excess hours from existing infrastructure. Prestige Data Services (PDS) performed data processing for the telephone company and sold computer services to other companies and organizations. PTC believed that a profitable subsidiary would reduce pressure for telephone rate increases. After a number of years of delivering losses, PDS believes that more time should be given and that a profitable business was possible. The fundamental problem of Prestige Data Services is that they have too many available hours that are not generating revenue. In the first quarter of 2003, they have an average of 176 unused hours per month, based on current charge rates, this represents an opportunity for additional revenue of over $140,000 per month within the existing infrastructure and resourcing structure. Part a - Learning outcomes is the understanding of the following in this case study: • Incremental Cost Analysis – understanding of the change that a company experiences within its balance sheet due to one additional unit of production. • Return on Investment – how much revenue is earned from the investment PTC has made into the data company • Opportunity...
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...Prestige Data Services Cost Volume Profit Analysis The following equation has been used for the purpose of this analysis: (Intra-company sales + commercial sales) = Fixed Cost + Variable Cost/hour * time (in hours) To work out only the contribution of intra-company and commercial computer use, “Other commercial sales” has been removed from the revenue. To counter that, “Materials cost” has been removed from the costs; three month average for these parameters is approximately equal. Fixed Costs = $212939 Rent ($8000), Custodial Services ($1240), Computer Leases ($95000), Maintenance ($5400), Computer Equipment Depreciation ($25500), Office Equipment and Fixtures ($680), Fixed component of Operations (6*$3600 = $21600), System development and maintenance ($12000), Admin ($9000), Sales ($11200), Sales Promotion ($8083), and Corporate Services ($15236). Variable Costs = $29/hour Variable component of Operations ($24 per hour), Power ($5/hour) – calculate from March power cost divided by March computer use, assuming only billable computer use is to be used for this variable cost. Revenue = $82000 + N* $800/hr (where N is number of commercial sales hours) Intra-company sale of $82000 per month at $400/hour translates to 205 intra-company sales hours per month. Hence, for breaking even: $82000 + $800 * N = $212939 + (205 hours + N) * $29 This gives us N = 177.54 hours, and gives us Break even revenue of $142032.68. Thus, to be run as a viable business...
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...Prestige Telephone Company En su análisis del caso, asumir lo siguiente: 1. Los gastos de promoción para los próximos meses están programados para $8,000. 2. Los valores de las cuentas: “Ventas por otros conceptos” y “Gastos de materiales y suministros” se compensarán aproxima Cuestiones 1. Valorar el resultado de las operaciones de Prestige Data Services. ¿Es realmente la subsidiaria un problema para Prestige Telephone Company? Considerar detenidamente las diferencias entre los costes que figuran en los informes y los costes que serían significativos para las decisiones que está considerando Daniel Rowe. 2. Suponiendo que la demanda de Prestige Telephone Company sea de 205 horas/mes, ¿cuál debería ser el volumen de horas vendidas a clientes externos para alcanzar el punto muerto? Supuesto Demanda PTC Tarifa PTC Demanda externos Tarifas externos Costos: Fijo Variale 400 - 28x205 + 76260 Punto equilibrio Ingresos PTC + Ingresos clientes externos 205 400 (205 * (400 - 28)) + (Q * (800 - 28)) - 19 ?? 800 (76,260) + (772Q) - 197,800 = 197,800 28 800xQ + 772Q + 772Q + 772Q Q -28xQ - 197,800 197,800 121,540 = = 3. Calcular el efecto que tendrían en el resultado las distintas opciones sugeridas por Rowe, dadas las siguientes estimaciones de Bradley: a) Aumentar el precio a los clientes externos a 1.000 dólares/hora disminuiría su demanda en un 30%. b) Reducir el precio a los clientes externos a 600 dólares/hora...
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...Prestige Telephone Company Question 1: Appraise the results of operations of Prestige Data Services (PDS). Is the subsidiary really a problem to Prestige Telephone Company (PTC)? Consider carefully the differences between the reported costs and costs relevant for decisions that Daniel Rowe is considering. The current data indicate that the PDS is in operating loss. And going by the presented data, yes, PDS is a problem to PTC at this point of time. And this in spite of many major costs being absorbed by PTC while charging a sum towards corporate services to PDS. However the way data was collected, costs calculated and presented could be different from the actual reality. And moreover the trend in the 3 months is that the commercial sales is going up (marginally though) and losses are reducing. Also it is reported that PDS is operating with un-used capacity (which might be another reason for the projected loss). Though PDS is in loss currently, (a) a re-structuring of the cost accounting methods, (b) more marketing activities to increase sales and thereby using the free capacity available, (c) reducing the staff count by reducing the number of shifts, could see PDS being profitable in the long run. Shutting down vs. restructuring PDS The decision has to be based on the ROI and the opportunity cost. By closing down PDS, the lost (customer) sales are the opportunity cost. But the short term benefits could be from the sale of equipment, savings from resource cost, rental...
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...PRESTIGE TELEPHONE COMPANY In deciding whether to continue, discontinue or sell a subsidiary company, we should consider the benefits and disadvantages of each option. We gauge the contribution of a subsidiary not only by looking at its profitability but also the advantage it can give to the parent company particularly in reducing its costs. Having a low profitability or even a net loss does not necessarily mean that the decision of retaining the subsidiary is wrong. Separating the relevant costs from the irrelevant costs helps the parent company determine how the subsidiary can be a factor in its overall operation. We may not know, but continuing could most likely be the best decision. Identifying cost objects and cost drivers are essential in determining the price, profit and breakeven levels of a firm. Differentiating fixed costs from the variable costs is also very important. Subtracting the variable cost from the selling price (or total revenues minus total variable costs) will give us the contribution margin which “contributes” to recovering the fixed costs, and the excess of which will increase the operating income of the company. Cost-Volume-Profit (CVP) analysis is very helpful in making sound business decisions for the short term, as well as for long-range planning, particularly in this case for product features and pricing. For a company to avoid operating losses, like in the case of Prestige Data Services, the managers should be interested in looking...
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...Case Analysis: Prestige Telephone Company Liam Hennessy, Xinyi Zhang, Yuan Chai, and Anthony Saba 1. Reasons for Continuing Losses Prestige Data Services’ main problem is that they have too many available hours that are not generating any revenue. In the first quarter of 2003, they have an average of 176 available hours per month of available hours. Its operations exact a huge amount of fixed costs to cover. If they could find more commercial customers for the available capacity, they could increase their commercial sales revenue by as much as $140,880 (176*800). In addition, they are also creating unnecessary expenses by having to pay all kinds of expenses during these unprofitable hours. 2. Breakeven Point of Commercial Sales & Evaluation of the Suggested Options (Questions #2 and #3 attached to the case) Before starting to answer these two questions, it is more than necessary that we get the formula for Prestige Data Services’ net income (loss), even they will not be very exact. If we combine the data in each category in Exhibit 2 (such as Intercompany sales, Rent, and Operations, etc.) as a whole, and let a = Intercompany revenue hours, and b = Commercial revenue hours, then we can derive the following revenue and cost formulae of Prestige Data Service in each month: i. Revenues Intercompany revenues = $400a Commercial revenues = $800b Total revenues = $400a+$800b+$0.055(400a+800b) Other revenues = $0.055(400a+800b) ...
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...McDermott Company Method of Least Squares McDermott Company is developing a cost formula for its packing activity. Discussion with the workers in the packing department has revealed that packing costs are associated with the number of customer orders, the size of the orders, and the relative fragility of the items (more fragile items must be specially wrapped in bubble wrap and Styrofoam). Data for the past 20 months have been gathered: |Month |Packing Cost |Number of Orders |Weight of Orders |Num. of Fragile | | | | | |Orders | |1 |$45,000 |11,200 |24,640 |1,120 | |2 |58,000 |14,000 |31,220 |1,400 | |3 |39,000 |10,500 |18,000 |1,000 | |4 |35,600 |9,000 |19,350 |850 | |5 |90,000 |21,000 |46,200 |4,000 | |6 |126,000 |31,000 |64,000 |5,500 | |7 |90,600 |20,000 |60,000 |1,800 | |8 |63,000 |15,000 |40,000 |750 | |9 |79,000 |16,000 ...
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...Chapitre 2 La diversité dans les organisations Dans ce chapitre , nous observerons de quelle manière les organisations s’efforcent d’exploiter au maximum les contributions potentielles d’un effectif diversifié . Nous montrerons aussi comment les caractéristiques démographiques , telles que l’appartenance ethnique et les différences individuelles en termes de compétences , influencent les performances et la satisfaction de l’employé . 1. La diversité La diversité est devenue en quelques années un enjeu important pour l’entreprise La diversité est un outil de communication pour l’entreprise qui comprend que les pratiques et les attentes de ses clients changent et se diversifient elles aussi . Enfin , les recruteurs et les gestionnaires de carrière mesurent progressivement l’intérêt de jouer la carte de la diversité pour attirer les talents , manager les compétences et optimiser les potentiels . Nous ne sommes pas tous pareils . C’est une évidence .Mais les managers oublient parfois qu’ils doivent reconnaître et exploiter ces différences pour tirer le meilleur de leurs employés . La gestion efficace de la diversité offre à l’organisation une capacité accrue d’accéder au vivier de compétences , d’aptitudes et d’idées le plus large possible . Les managers doivent aussi prendre acte que les différences entre les gens risquent d’entraîner des difficultés de communication , des malentendus et des conflits . Nous découvrirons ici comment les caractéristiques individuelles...
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...Prestige Data Services Cost Volume Profit Analysis The following equation has been used for the purpose of this analysis: (Intra-company sales + commercial sales) = Fixed Cost + Variable Cost/hour * time (in hours) To work out only the contribution of intra-company and commercial computer use, “Other commercial sales” has been removed from the revenue. To counter that, “Materials cost” has been removed from the costs; three month average for these parameters is approximately equal. Fixed Costs = $212939 Rent ($8000), Custodial Services ($1240), Computer Leases ($95000), Maintenance ($5400), Computer Equipment Depreciation ($25500), Office Equipment and Fixtures ($680), Fixed component of Operations (6*$3600 = $21600), System development and maintenance ($12000), Admin ($9000), Sales ($11200), Sales Promotion ($8083), and Corporate Services ($15236). Variable Costs = $29/hour Variable component of Operations ($24 per hour), Power ($5/hour) – calculate from March power cost divided by March computer use, assuming only billable computer use is to be used for this variable cost. Revenue = $82000 + N* $800/hr (where N is number of commercial sales hours) Intra-company sale of $82000 per month at $400/hour translates to 205 intra-company sales hours per month. Hence, for breaking even: $82000 + $800 * N = $212939 + (205 hours + N) * $29 This gives us N = 177.54 hours, and gives us Break even revenue of $142032.68. Thus, to be run as a viable business...
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...first quarter of 2003, Prestige Data Services (PDS), a strategic subsidiary of Prestige Telephone, is showing a net loss of $75K. Their monthly revenues for the quarter have varied from $189K to $212K and their expenses have remained relatively flat around $222K each month. Table 1: High Level Q1 2003 Financials It might appear that the data subsidiary is continuing to lose money and should be considered as a candidate for elimination. However, that is NOT the case. The financials don’t show the true value of PDS to Prestige Telephone as a whole. First of all, the data processing services that PDS provides are necessary for Prestige Telephone’s operation and if they don’t buy them from PDS they will buy them from another third party. Those costs are estimated to be around $82K per month, much more than the data subsidiary’s monthly losses in Q1 2003. Second, there is significant strategic value in PDS to Prestige Telephone. Based on current regulatory restrictions, the telephone operation is unable to change rates charged to customers for its telephone services. At PDS, however, rates to external commercial customers can be changed. As the potential market for data processing still is believed to exist, this gives PDS the opportunity to better exploit that opportunity and turn the current losses into profits in the future. Lastly, the opening of the PDS subsidiary is viewed by the Public Utilities Commission as a step for Prestige Telephone towards deregulation in...
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...Technology has been defined as the application of scientific methodology and knowledge for practical purposes. Over the years there has been a lot of technology being introduced none so much as the last quarter of a century where there has been some outstanding inventions by some outstanding individuals. Being able to award an individual the accolade of the greatest technology inventor of all time or a technology as the greatest invention of all time is a very daunting and overwhelming task as it in unenviable task to burden a person with. There are a lot of questions to ponder on questions like how do you measure the impact it has made to civilization, does it lead to further innovation or an end product in its own, what negative impact has it had to our world? All these questions are valid questions and lead to me being very subjective on this topic while selecting my 3 innovators and their inventions. Nikola Tesla, one of the most unsung inventors of all, he was arguably the greatest inventor of all time his portfolio included the electrical coil, radio waves and a host of other patents which he still owns till this day. Tesla was born in 1856 in in the Austrian Empire now the modern day Croatia; he was an electrical and mechanical engineer, a physicist and above all an inventor holding over 300 documented patents in the fields of science and technology. What makes him so great was his aspiration to move the human race forward through his inventions, his patents were “freeware”...
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...TELEPHONER Frans/Français Academiejaar 2014-2015 1 Le téléphone : conversation modèle. Ecoutez attentivement la conversation téléphonique suivante. Remarquez : le débit avec lequel on parle ; la mélodie (le français est une langue mélodieuse avec plus d’intonation que le néerlandais) ; l’expression des sentiments (je suis désolé, je regrette, ….) ; les formules employées au début et à la fin de l’entretien au téléphone ; etc. A L’Arche, bonjour. Colette Montreuil à l’appareil. Puis-je vous aider? B Bonjour Madame. Ici Marc Dujardin de Pepsi France. Pourriez-vous me passer Madame Lefort, svp? A Désolée, Monsieur, Madame Lefort est en réunion en ce moment. Mais si vous voulez, je vous passe sa secrétaire. B Dommage que je ne puisse pas parler à Madame Lefort en personne car il me faut reporter un rendez-vous. Mais, d’accord, passez-moi sa secrétaire. C Chantal Blasco, la secrétaire de Madame Lefort. Bonjour. B Bonjour Madame. Marc Dujardin de Pepsi France à l’appareil. J’aurais voulu parler à Madame Lefort au sujet de notre rendez-vous du 6 juin prochain qui ne pourra malheureusement pas avoir lieu en raison d’un voyage d’affaires en Allemagne. C Je vois Monsieur Dujardin. A quelle date voudriez-vous reporter le rendez-vous? B Pourriez-vous regarder dans l’agenda de Madame Lefort pour voir s’il est possible de différer ce rendez-vous d’une semaine ? C Un instant svp, Monsieur, je vais...
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...working on the railroad at age 12(Frith 14). Although Edison did not complete school, he continued to learn and experiment. Edison set up a printing press in the baggage car on the train and sold his own newspaper to the passengers (Frith 17). He retold the news from one end of the rail line to the other end of the rail line, allowing the people to be better informed of their neighboring towns. He was also able to have a small lab to perform scientific experiments, at least until his chemicals mixed together and started a fire in the baggage car (Firth 18). Edison then went to work at Western Union as he was fascinated with the telegraph. He was also consulted to improve on a very new technology, the telephone. It was a disappointment to not be the first to discover the telephone, as he had been tinkering with his own ideas on speech delivered over wire (Firth 45). His...
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...Calling and texting are to excellent ways of communication, but texting is better. Texting allows so much more advantages then calling. Texting is faster, cheaper, and more convenient. Which makes it the better choice for communication. When having a conversation, a lot of people want it to be fast, an texting allows that. With texting you don’t have to hold a conversation and say hello, you can ask a question and end the conversation. For example did you know millions of people around the world prefer texting to calling? It’s true! It’s because it allows faster and easier means of communication. Another great thing about texting is the money. Texting is so much more cheaper then calling. Texting cost two cents a text and calling cost three cents. That may not seem like a lot but after a while it adds up. A thirty minute phone call can cost 90 cents but a thirty page text can cost 60 cents! Same amount of time but 30 cents less then calling. Last is the convenience. Calling takes time out of peoples day, it interrupts there work life or personal life. With a text message they can get back you at there convenience. In the work place most places wont allow person phone calls with texting you can tell someone important without risking there job. Its just more convenient. In conclusion, while yes calling is an excellent means of communication, texting is better. As I’ve described there’s a lot of advantages to texting. So next time there is a need for communication text them...
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...Network+ Guide to Networks, 6th Edition Chapter 12 Solutions Review Questions 1. You have decided to establish a VoIP system in your home. Which of the following devices is necessary to connect your analog telephone to your VoIP server? a. Codec b. IP-PBX c. Softphone d. ATA 2. Skype, the popular Internet telephony service, provides a user with what type of interface? a. IP phone b. Analog telephone c. Softphone d. IP-PBX 3. A company’s use of VoIP on its WAN to avoid long distance telephone charges is known as: a. Toll bypass b. WAN redirect c. Fee gauging d. Circuit redirect 4. Which of the following is the most popular signaling protocol used on traditional, circuit-switched PSTN connections? a. SIP b. SS7 c. H.323 d. MEGACO 5. Watching a YouTube video on the Web is an example of which of the following types of video-over-IP services? a. Videoconferencing b. Streaming video c. IP multicasting d. IPTV 6. In an IPTV system, which of the following functions does a set top box perform? a. Decodes video signals and issues them to a television b. Determines the appropriate amount of bandwidth necessary to deliver a requested video and adjusts the connection accordingly c. Interprets multicast routing protocols to determine the most efficient means of distributing video signals d. Generates video content based on a subscriber’s channel selection 7. What type of video-over-IP service relies on full-duplex communication? a. Webcasting...
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