Case Study: Grand Jean Company

The Grand jean company was founded in the mid 19th century. Grand Jean
company had been a market leader with Wash to wear, bell-bottom and
flare jeans. It offered a wide variety of dress and fashion jeans for both men
and boys and a complete line of pants for women.This company has 25
Plants.
Goals of the Company

Increase Profitability
Become more cost efficient
Improve Plants Production capacity
Improve Production capacity

Goals of the 25 plants Managers

Meet the production budget figure

Meet the standard number of labour hours
Community Relations
Employees

Goals of the companys Marketing Organization

To meet the targets of sales units and sales dollar which are set by
marketing forecast
How they are achieving Goals?
Frequent change in production mix to cater the change in consumer
demand
The sales forces compensation consists of salary plus 8 percent sales
The sales of each line of pants are assigned to the respective
marketing department
1. Basic Jeans Depart.
2. Boys Jeans Depart.
3. Mens casual Jeans Depart.
4. Mens Dress and fashion Jeans Depart.
5. Womens Jeans Depart.
Bonus

Marketing Department A Revenue centre

Actual sales are measured against budgets:
A. Set up sales forecast
B. Measure performance based on the budget
Revenue is the primary measure and the sales commission is the key
incentive for sales force
Production Unit Engineered expense centre

Discretionary cost exist

Engineering cosr pre-dominate
Input can be termed in monetary terms
Output can be termed in physical terms

Performance Measurement of Responsibility Centre

A. Efficiency
B. Effectiveness
Measurement of Efficienty
Theorical Standard budgeting
Production time (hrs) per pair
Production Cost ($) per pair
Measurement of Effectiveness
To keep all plants at efficiency
Monitoring other factors
Put one plant to work for a whole year on one type of pants
Performance Review of Managers
Compare standard labor hours allowed against the actual labour
hours
Community relations
Empoyees Morale
Reward System: (Annual bonus based on the companys
performance and profits)X (Rating)