...Tugas Ringkasan Kasus II. Vershire Corporation Kelompok 3 1. Carlo 2. Dini 3. Taufan 4. Happy 5. Rahadian Pada tahun 1996 Perusahaan Vershire adalah salah satu produsen terbesar kaleng minuman aluminium di Amerika. Di setiap unit bisnis, perusahaan ini mempunyai 2 bagian utama yaitu : 1. Bagian Manufaktur 2. Bagian penjualan Pada tahun 1970, kemasan kaleng kebanyakan masih terbuat dari besi (sekitar 88%), akan tetapi di awal tahun 1990, kemasam kaleng berbahan aluminium mulai mendominasi pasar. Dan pada tahun 1996 kaleng aluminium menguasai 75% industry kemasan kaleng. Dalam industri packaging ini, banyak pemain yang ada di pasar Amerika Serikat. Vershire Company menggunakan anggaran sebagai alat pengontrol utama kinerja perusahaan. Divisi penjualan Anggaran untuk tahun depan mulai disusun pada bulan Mei. Masing-masing kepala divisi dalam Bagian Penjualan menyusun laporan mengenai data-data seperti prediksi data-data penjualan, pendapatan, dan lain-lain. Prediksian ini tidak dibuat secara rinci melainkan dibuat secara umum saja, dilihat dari data 2 tahun terakhir. Setelah laporan ini selesai dibuat, laporan ini kemudian diajukan kepada staff riset perusahaan untuk dilengkapi dan disesuaikan dengan data-data pasar yang sebenarnya, kemudian dikembalikan lagi kepada manajer divisi untuk dipelajari. Dengan demikian, staff riset perusahaan ini lah yang membuat budget bagi seluruh divisi yang ada di Vershire Company. Proses ini kemudian diulang pada tingkat perusahaan...
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...CASE STUDY Vershire Company In 1996 Vershire Company was a diversified packaging company with several major divisions, including the Aluminum Can division - one of the largest manufacturers of aluminum beverage cans in the United States. Exhibit 1 shows the organization chart for the Aluminum Can division. Reporting to the divisional general manager were two line managers, vice presidents in charges of manufacturing and marketing. These vice presidents headed all of the division’s activities in their respective functional areas. The Aluminum Can division’s growth in sales slightly outpaced sales growth in the industry at large. The division had plants scattered throughout the United States. Each plant served customers in its own geographic region, often producing several different sizes of cans for a range of customers that included both large and small breweries and soft drink bottlers. Most of these customers had between two and four suppliers and spread purchases among them. If the division failed to meet the customer’s cost and quality specifications or its standards for delivery and customer service, the customer would turn to another supplier. All aluminum can producers employed essentially the same technology, and the division’s product quality was equal to that of its competitors. Industry Background1 Traditionally, containers were made from one of several materials: aluminum, steel, glass, fiber-foil (paper and metal composite), or plastic. The metal container...
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...Chapter 4 Case 4-1. Vershire Company Questions: 1. Outline the strengths and weaknesses of Vershire Company’s planning and control system. Vershire’s planning system Strengths: When formulating the sales budget, divisional managers are required to predict market conditions and capital expenditures. The frocasting is done at the corporate level and is then sent to the divisional managers for fine-tuning. Corporate controllers visit each plant for half a day prior to the final submission of the budget. Weakness The initial sales forecast uses assumptions which are entirely derived from corporate headquarters’ analyses. The forcasting method is the same for all product lines. Plant managers do not come up with the sales budgets – the district sales manager do. Vershire’s control system Strengths Divisional managers are given full control over their divisions except in the ares of raising capital and labor relations. There is timely communication between the various hierarchies of the company as there are not that many tiers. There is constant oversight on meeting the budget. Weakness Profit is the main measure for assessing plant managers’ performance and determining bonuses. 2. Trace the profit budgeting process at Vershire, starting in May and ending with the Board of Directors’ meeting in December. Be prepared to describe the activities that took place at each step of the process and present the rationale for each. 3. Should the plant managers...
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...|Management Control System | |Ringkasan Kasus 2 : Vershire Company | |Kelas Akhir Pekan 22A | By Kelompok 3 : Dewi Ilmayanti Dina Diana Tambunan Feri Nata Maleakhi Kemal Rusmali Yanti Rakhmayanti [pic] | | Magister Management Universitas Gadjah Mada Vershire Company A. Profil Perusahaan Vershire Company merupakan salah satu perusahaan penghasil kemasan(packaging) terbesar di Amerika Serikat. Struktur organisasi di Vershire Company terbagi menjadi beberapa unit bisnis, dimana di setiap unit bisnis terdiri dari 2 area fungsional yaitu Manufacturing dan Marketing. Berikut adalah truktur organisasi di divisi kemasan aluminium: [pic] Setiap Division General Manager memiliki wewenag penuh untuk mengendalikan unit bisnisnya kecuali yang terkait dengan Sumber Daya Manusia, dan struktur modal. Persaingan pasar industri kemasan di Amerika Serikat sangat tinggi. Pelanggan memiliki banyak pilihan pemasok dalam waktu bersamaan. Sehingga perusahaan...
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...Vershire Company Vershire Company & Aluminum Industry Industry of Aluminum: Aluminum. Less spillage or breakage, ease of storage at home or when people travel, maintenance of soft drink carbonation, ease of lithograph and ease of recycling, aluminum production is one of the modern era’s great economic stories. The world’s primary aluminium industry produces over 23 millions ton of aluminium metal per year. The most important markets for aluminium products are the transport, building and packaging sectors, however aluminium also finds application in electrical and mechanical engineering, office equipment, domestic appliances, lighting, chemistry and pharmaceuticals. The United States' aluminum industry is the world's largest, annually producing about $39.1 billion in products and exports. U.S. companies are the largest single producer of primary aluminum. The U.S. industry operates over 300 plants in 35 states , produces more than 23 billion pounds of metal annually and employs over 145,000. Aluminum is one of the few products and industries left in America that truly impacts every community in the country, either through physical plants and facilities, recycling, heavy industry, or consumption of consumer goods. The aluminum industry's performance is noteworthy, particularly in light of the proliferation of alternative materials and global competition. Transportation represents the largest market for aluminum in the United States. In 2000, transportation accounted for 32.5...
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...Revised Summer 2010 CHAPTER 7 PROFIT PLANNING Key Terms and Concepts to Know Profit Planning and Budgeting: Profit plan is the steps taken by the business to achieve their planned levels of profits. Budget is a quantitative plan for acquiring and using resources over a specific time period to achieve its goals and objectives. Budget is used for two distinct purposes: o Planning which is developing goals and preparing various budgets to achieve those goals o Control which involves steps taken by management to increase the likelihood that all parts of the organization are working together to achieve the goals set down at the planning stage Budgets help to: o Communicate management’s plans throughout the organizations o Force managers to think and plan for future o Allocate resources where they can be used most effectively o Uncover potential bottlenecks. o Coordinate the activities of the entire organization o Serve as benchmarks for evaluating subsequent performance. Operating budgets ordinarily cover a one-year period corresponding to the company’s fiscal year. Organization may also divide their budget year into quarters and the quarters into months with operating budgets for each period. Master Budget: Includes a number of separate but interdependent budgets that formally report the company’s sales, production, and financial goals. The starting point of the master budget is the sales budget. The ending point of the master budget...
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...escribe the strengths and weaknesses in planning and control systemVershire Company!Settlement:a. Pros:1. In 1972 the industry experienced a revolution since the aluminum maker chosetwo kinds of processes in which a piece of metal inserted into the cupand closed at the top. So in 1996 capable of producing more than2,000 cans per minute, because it has more efficient manufacturing processes.2. Authorization limitation on the general manager of the division. Division general manager hasfull control on their business with two exceptions: the increase incapital and labor relations, because both are centered at the central office.3. The existence of the review by the research staff at headquarters preparation statementssubmitted by each division general manager. This is a reportpreparation to incorporate summaries regarding sales,earnings, and capital requests for next year's budget.4. The making of the budget in the form of gross profit, fixed expenses, andpre-tax income made by the order to each plant. Gain is calculatedas the value of sales budget is smaller than an unexpected expense budgetand the budget you have for sure.5. For a review of variance whose value exceeds the budget made by themanagement company, and ask a local plant manager notmeet the target to explain.6. The existence of the fixed costs of testing to determine whether the factory has beenimplementing programs, whether the factory has met the cost of the budget,and whether the results...
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...Chapter 4 Case 4-1. Vershire Company Questions: 1. Outline the strengths and weaknesses of Vershire Company’s planning and control system. Vershire’s planning system Strengths: When formulating the sales budget, divisional managers are required to predict market conditions and capital expenditures. The frocasting is done at the corporate level and is then sent to the divisional managers for fine-tuning. Corporate controllers visit each plant for half a day prior to the final submission of the budget. Weakness The initial sales forecast uses assumptions which are entirely derived from corporate headquarters’ analyses. The forcasting method is the same for all product lines. Plant managers do not come up with the sales budgets – the district sales manager do. Vershire’s control system Strengths Divisional managers are given full control over their divisions except in the ares of raising capital and labor relations. There is timely communication between the various hierarchies of the company as there are not that many tiers. There is constant oversight on meeting the budget. Weakness Profit is the main measure for assessing plant managers’ performance and determining bonuses. 2. Trace the profit budgeting process at Vershire, starting in May and ending with the Board of Directors’ meeting in December. Be prepared to describe the activities that took place at each step of the process and present the rationale for each. 3. Should the plant managers...
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...Analysis of Vershire Company Point of View The point of view of the consultant is taken to provide an objective analysis and recommendation to improve the management control of the company. Statement of the Problem How can Vershire Company improve the way it manages its forecast-budget and the incentives that it gives its plant managers? Analysis The company was fairly stable at that moment in time. It was competing among the other major competitors in the packaging industry. However, it had flaws in spite of its top position in the market at that time. First, the sales manager that is in charge in making the sales budget does not consider the perspective of the plant manager. This oversight could lead to unrealistic forecasts. Even if the sales manager is knowledgeable in the workings of the plant, it is still necessary to include the insights of the plant manager, since the latter is an expert in the mechanisms of the plant. Also regarding the forecasting method, the head office staff almost manages everything regarding the whole forecasting. Yes, there are insights from the sales managers that are considered, but the central market research staff consolidates everything in more detail and in a general manner. Furthermore, the plant managers are being incentivized in a wrong manner. They are being assessed according to profit. Housed in an engineered expense center, a plant manager should only focus on the costs incurred by the factory. The mantra of the company...
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...Vershire Company, a packaging company that manufactures aluminium beverage cans, is known as one of the largest in its industry in the United States. It has several divisions one of them being the Aluminum Can division wherein two line managers report directly to the Division General Manager. Divisions were almost autonomous in conducting business except for raising capital and labor relations, both functions being done at the head office to realign each division’s efforts into the company’s objectives. The company was divided into divisions which were then divided into departments, namely Marketing and Manufacturing, to be able to practice control over smaller units that were easier to evaluate according to function. In budget preparation, sales forecasts were made at the corporate headquarters to ensure that all divisions had the same assumptions and that forecasts were reasonable and achievable. This would then be given to division general managers who would cross check this with data prepared by his subordinate district sales managers. This would then be submitted to the corporate level for approval. Once approved, budget was broken down into plant level sales budgets. Plant budgets were then submitted to the division head office for approval. One problem in Vershire’s set-up was the unequal delegation of responsibilities, with plant managers having to account for more than just plant operations. Manufacturing departments were treated as profit centers. To illustrate, a...
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...4AA3 Case: Vershire Company | | | | | | | | Vershire - Introduction Vershire Company is a diversified packaging company with several major divisions. The case puts its focus on Vershire’s aluminium can division. The division has plants throughout the United States, each serving its geographic region. Its customer ranges from soft drink bottlers to small and large breweries. The Vershire Company holds the largest share in aluminium beverage can market in US and they are growing faster than its industry average. The major issue that the company faces is that customers in the industry are not reluctant to switch to another supplier if certain standards in quality and service are not met. Vershire’s main problems are its planning, internal control, and placing responsibilities on the correct managers. Planning System The first issue in planning system is that initial sales forecast is not made by divisional managers who are responsible for the operation management of each division. Rather, the sale forecast uses assumptions derived entirely from corporate headquarters’ analyses. Such assumptions include inventory carryovers, packing trends, and etc. The forecasting method also lacks a decentralized mindset which is vital when there are different markets and customer preference. By using a centralized system, the company’s decisions do not accommodate for these differences. This would greatly hinder the company’s performance in sensitive markets that...
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...Vershire Company & Aluminum Industry Industry of Aluminum Aluminum. Less spillage or breakage, ease of storage at home or when people travel, maintenance of soft drink carbonation, ease of lithograph and ease of recycling, aluminum production is one of the modern era’s great economic stories. The world’s primary aluminium industry produces over millions ton of aluminium metal per year. The most important markets for aluminium products are the transport, building and packaging sectors, however aluminium also finds application in electrical and mechanical engineering, office equipment, domestic appliances, lighting, chemistry and pharmaceuticals. The United States aluminum industry is the worlds largest, annually producing about $.1 billion in products and exports. U.S. companies are the largest single producer of primary aluminum. The U.S. industry operates over 00 plants in 5 states , produces more than billion pounds of metal annually and employs over 145,000. Aluminum is one of the few products and industries left in America that truly impacts every community in the country, either through physical plants and facilities, recycling, heavy industry, or consumption of consumer goods. The aluminum industrys performance is noteworthy, particularly in light of the proliferation of alternative materials and global competition. Transportation represents the largest market for aluminum in the United States. In 000, transportation accounted for .5 percent of all US...
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...VERSHIRE COMPANY ANALYSIS RUDDY FERBIANTO MANAGEMENT CONTROL SYSTEM INTERNATIONAL-BATCH62 Vershire Company has several division and one of the largest one is the alumunium can division. This division is one of the biggest can manufacturers in United States. However, the market characteristics in which the customers loyalti is low and entry barriers does too. One of the Vershire’s strategies is to have lean production system along with tight control over their plants,budgets, and performance to have process efficiency. There are several strengths and weaknesses in Vershire’s planning and control system. Strengths | Weaknessess | * The divisional managers are required to make 5 years-expenditures and two years-market forecast in order to be able to predict the future decisions and goals. * Between corporate controllers, divisional managers, and plant managers have good work-process relationship. The corporate controllers visit each plan to have input from plant managers. * Divisional managers are given full control over their divisiona excepts in the areas of raising capital and labor relations * The orgnizational structures are quite direct in decision making system. Starts from plant managers to division managers and then straight foward to corporate level. Even, corporate levels can go directly to plan managers. | * The sales forecast is made in corporate level using asumption. The divisional managers do not have any participation in making sales forecast...
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...Vershire Case Study Vershire Case Study Case Background Vershire Company was a diversified packaging industry organized with several divisions focused on different product lines. One of these is the Aluminum Can Division, which by far is one of the largest manufacturers of aluminum beverage cans in the United States. The company has a decentralized culture, with the division general managers exercising considerable autonomy in decision-making. Under a general manager were two line managers responsible for production and marketing functions. Over the years, the Aluminum Can Division had built plants scattered throughout the country. Each plant is responsible to serve a geographical area, both for large and small-scale customers. The industry is very competitive, as each manufacturer employs the same technology and everyone was viewed by customers to have the same product quality as anyone in the industry. Thus, customers can readily shift from one supplier to another in cases that delivery schedulesand product qualities were not met. Vershire employs a long-term budgetary control system. Corporate sales budgets are prepared both in a top-down and bottom-up approach. These sales budgets are then translated to sales target per production plants and became the basis of target profits for each plant. Upon the end of the period, managers are then evaluated based on these target profits, even when budgeted sales are not met. Also, other performance measures are at place that...
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...The Vershire Company has to keep tight controls over their plants, budgets, and performance in terms of efficiency and effectiveness, because customers can easily purchase from another manufacturer if cost, quality, and service are not met. The planning strength of the Vershire Company is that a sales budget is formulated at the corporate level and starts with a forecast, which is created and sent to the divisional managers for review. This allows divisional managers to have some input for their budget, which will add to the accuracy. Corporate controllers also visit each plant for additional input before final submission. The company I work also formulates a sales budget; we are actually starting the process in October. We look at our historical sales data, our current sales, and our sales targets for the coming year. The sales budget leads to the development of the other budgets, manufacturing, production, purchasing, inventories, sales and other expenses. Our budgets are usually determined by end of November, no later than mid December for the New Year. All departments have input and are responsible for their budgets. Our forecasting and planning efforts are examined on a monthly basis throughout the year as well as daily inputs from the sales quotation department through their quote follow-up efforts. This allows us to keep tighter controls on inventories to keep us within the set budget as well as keep reasonable lead times for the different product lines. The weakness...
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