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SMAC Case Examination Summary

Case

Strategic Issues

Upgrade existing properties to


attract more business travellers
Purchase Calgary hotel
Exercise option on land in Montreal
and build conference centre or sell
the land
Providing additional in-room
services

GR Hotels (Sample
Case Examination)

Operational Issues

CML (May 2008 Case


Examination)

Opening new stores in BC, Alberta,


and Ontario
Expansion into collectible plates
Expansion into DVD sales

Budgeting and financing relating to


upgrading the existing properties,
buying the Calgary property, or
building the conference centre
Training related to improving services
in upgraded hotels
Various issues associated with
Calgary hotel being considered for
purchase
Occupancy rates lower than
benchmark hotels suggesting image
management issues at existing
properties
Ethical and control issues within the
current operations and the possible
Calgary purchase
Lack of independence in current
board
Opening a new warehouse to serve
the Ontario and Quebec stores
Lack of independence in current
board
Cash flow issues caused by need to
repay loan to shareholder
Succession planning
Budgeting relating to offering new
products
Budgeting relating to opening new
stores
Inventory valuation for financial
reporting
Various ethical issues relating to
operating the current stores
Lack of incentive compensation
systems

Concepts/Tools Examined

Net present value


CCA analysis
Mark to market financial accounting
issues
Profit analysis
Opportunity cost
Financing
Asset valuation
Restrictive covenant in current
financing agreement
Financial statement (ratio) analysis
HR issues relating to implementing
performance evaluation and
incentive compensation systems

CCA Analysis
New product profit analysis
Net present value analysis
GAAP rules relating to external
reporting
HR issues relating to implementing
performance evaluation and
incentive compensation systems

Arena problems: renovate or build a


new Arena
Service Problems: outsource
options or in-house training
Ethical Issue: Naming rights offer
for new arena

Parking and event room capacity


Player management
Hockey player salary cap
Staff turnover
Sale of alcohol at concessions

Newville Tigers Inc.


(August 2008 Case
Examination)

Delfa Printing Ltd (May


2009)

Acquire Ready and Able Printing


Enter into contract with Northern
Complete Ins for warehousing
Enter into contract with General
Printing Srvices for offset printing
Expand warehousing capacity

Financing requirements
AR
Operational inefficiencies (e.g.,
bottlenecks, backlogs, overtime, ISO
certification, dockets, inventory mgmt,
late deliveries, lack of printing
capacity, managing capacity, lack of
space for equipt)
IT issues (software for job tracking,
scheduling)
Too few customers/narrow industry
scope
Internal control and ethical issues
Risk mgmt issues: fuel costs, market
pricies, growing interest in digital
printing

Ratio analysis
NPV of improving or replacing
arena
Calculating capital gains
Appropriate accounting for signing
bonuses
Decision and profitability analysis
(relevant revenues, costs CM, cash
flows)
Uncertainty/sensitivity analysis (calc
and comp incremental CM under to
ticket pricing scenarios)
Relevant costing
Capacity
Calc financing requiring
Consideration and calculation of
capacity constraints
Financial ratios and trend analysis
Bank constraint calculation (3:1)
Calculate profitability of profit
centers
Profitability analysis & performance
indicators (relevant revenues, costs,
CM, opp costs, cash flows, B/E, NI,
EBIT)
Capital budgeting
Capacity analysis
Valuation using reasonable method
(e.g., capitalization of future
earnings, net asset value)
Financial forecase for > 1 year
Calc financing required

Case

Strategic Issues

Loss of existing contract


Hi-Way Engineering contract
opportunity
Solar Laser contract opportunity

Creative Lighting (June


2003 Part 2 Entrance
Examination)

Operational Issues

US contracts for precision clocks


and timers
Product mix relating to assembled
and unassembled products

Precision Timing
(October 2003 Case
Examination)

Production scheduling problems


Strongly conflicting views amongst
major shareholders about the
companys mission
Strongly conflicting personal
preferences amongst the major
shareholders
Weak accounting skills
Weak general management skills
Two partners hiding important
information from the third partner
Capacity management
Conflict over appropriate pricing for
stage lighting
Managing a business with very
diverse product lines
Dealing with an unethical customer
Board consisting entirely of internal
executives
Capacity management
Leadership succession issues
Move to a larger manufacturing
facility
Capacity analysis with seasonal
manufacturing
Inventory management system
causing production delays
Working capital management relating
to accounts receivable
HR issues relating to an incompetent
employee and undermotivated
employees

Concepts/Tools Examined

Product line profitability


Contract profitability
Opportunity cost
Contribution margin analysis
Product mix selection
Transfer pricing
Capital budgeting

Product line profitability


Product mix selection
Contribution analysis relating to
new product opportunities
Opportunity cost analysis relating to
capacity
Capital budgeting analysis
Financial statement (ratio) analysis
New product profitability analysis