UNIVERSITY OF ZIMBABWE

B.Sc. (Hons) Civil Engineering - Level III

PROFESSIONAL AND INDUSTRIAL STUDIES

AUGUST 2010 Engin. CE 309

Answer any FOUR Questions, at least one from each Time allowed: 3 hours
Section A ,B ,and C plus any one other question.
All Questions Carry Equal Marks

This examination paper consists of 4 pages.

SECTION A
QUESTION 1

a) Describe the elements of the Job Characteristics Model (JCM) and indicate the areas where it
falls short for what it is intended to do. [11 marks]

b) Assuming that you are the health, safety and environment manager of your organisation, and
your organisation intends to implement Total Quality Management Systems (TQM), describe
how you would integrate the "Health and Safety Mix" in implementing the TQM project.
[14 marks]
QUESTION 2

"We are going to win and the Industrial West is going to lose out - there is nothing much you can do
about it, because the reasons for your failure are within yourselves. For you, the essence of
management is getting the ideas out of the heads of bosses into the hands of labour. For us, the core
of management is precisely the art of mobilising and pulling together the intellectual resources of all
employees in the service of the firm. Only by drawing on the combined brainpower of all its
employees can a firm face up to the turbulence and constraints of today’s environment.

This is why our large companies give their employees three to four times more training than yours.
This is why they foster within the firm such intensive exchange and communication. This is why they
seek constantly everybody’s suggestions and why they demand from the educational system
increasing numbers of graduates as well as bright and well - educated generalists, because these
people are the lifeblood of industry.

Your socially-minded bosses, often full of good intentions, believe their duty is to protect the people
in their firms. We, on the other hand, are realists and consider it our duty to get our people to
defend their firms which will pay them back a hundredfold for their dedication. By doing this we end
up being more social than you." Konosuke Matsushita (Former Chief Executive Officer Matsushita
Corporation).

Discuss the foregoing statement taking into account modern day socio-industrial dynamics.
[25 marks]

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 SECTION B

QUESTION 3

(i) Clearly outline the differences between financial and management accounts.
[12 marks]

(ii) Describe your understanding of the factors affecting working capital with the aid of the working
capital cycle. [13 marks]

QUESTION 4

Analysis of Balance Sheet

Flash Transportation Services,

Consolidated Balance Sheet
Sep 30, 2009 Sep 30, 2008
Property, Plant, & $83,795,541 $49,403,534
Equipment
Goodwill N/A N/A
Other Assets $5,574,182 $451,603

Current Assets
Cash & Equivalents N/A $3,331,119
Receivables $36,495,339 $34,265,075
Inventories $1,302,067 $1,330,462
Pre-Paid Expenses $2,528,675 $2,325,199
Total Current Assets $40,326,081 $41,251,855

Total Assets $129,695,804 $91,106,992

Current Liabilities
Accounts Payable $46,031,558 $21,844,631
Short Term Debt $74,537,820 $3,437,120
Total Current Liabilities $120,569,408 $25,281,751

Long-Term Liabilities
Long-Term Debt $835,000,000 $16,376,791
Other Liabilities $1,004,000,000 $902,000,000
Deferred Long Term Liability N/A $4,604,318
Charges
Total Liabilities $955,569,408 $46,262,860

Shareholders' Equity
Preferred Stock $5,195,434 N/A
Common Stock $62,917 $62,877
Retained Earnings ($50,503,733) ($2,451,176)
Treasury Stock ($1,053,147) ($1,053,147)
Capital Surplus $51,865,007 $48,285,578
Other Stockholder Equity $3,559,918
Total Stockholder Equity $9,126,396 $44,844,132

Total Revenue $278,818,242 $231,396,894

Cost of Goods Sold $253,268,462 $163,611,569

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For the two respective years:
(a) Can you calculate the working capital? [2 marks]
(b) Calculate the current ratio for the two years. [2 marks]
(c) What are the quick ratios? [2 marks]
(d) What are the Gross Profit% or Gross Margin%? [2 marks]
(e) What are the debt equity ratios? [2 marks]
(f) What is the Return on Assets? [2 marks]
(g) Calculate the Return on Investment [2 marks]
(h) What are the days to collection? [2 marks]
(i) What are the days to payment? [2 marks]
(j) Would you invest your money in this company? Give your reasons. [7 marks]

SECTION C
QUESTION 5

Alpha Chemicals (Private) Limited, a Harare based company, is considering manufacturing one of
two fertilisers, Compound F or Compound G. The company’s required rate of return in investment
projects is 12% per annum. Each fertiliser will, in the first year, have a cash outflow arising from
launch and marketing of the fertiliser. After this there will be cash inflows from sales in the coming
years for both fertilisers. The table below has the net cash flows for the two fertilisers from Year 0
to Year 4.

Year Compound F Compound G

0 -$1200 -$2000
1 $800 $1500
2 $600 $1200
3 $500 $800
4 $400 $600

(a) Calculate the following:

Net Present Value of the cash flows for the Compound F
Net Present Value of the cash flows for Compound G
[8 marks]
(b) Calculate the following:
Payback period for Compound F
Payback period for Compound G
[2 marks]
(c) What is the profitability index of:
Compound F fertiliser?
Compound G fertiliser?
[2 marks]
(d) Which fertiliser would the company select if the decision is to have the fertiliser with the highest
contribution to shareholder value?
[2 marks]
(e) Formulate, without solving, the equation that you would use to find the Internal Rate of Return
for the fertiliser with the highest contribution to shareholder value. [3 marks]
(f) State 2 similarities and 2 differences between the Internal rate of Return and the Net Present
Value methods. Which method is generally considered more robust and why?
[6 marks]
(g) Under what circumstances is the payback method more favourable and why?
[2 marks]

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QUESTION 6

Omega Industries (Private) Limited manufactures two types of antique bathtubs, the Edwardian and
the Victorian bathtubs. The handles of these bathtubs are similar and they are assembled using the
same process that consists of the activities shown in the following table:

ACTIVITY EXPECTED TIME VARIANCE OF IMMEDIATE

(DAYS)
A 7
B 8
C 4
D 4
E 5
F 8
G 8
TIME ESTIMATE PREDECESSOR
3 -
1 -
1 -
2 B
2 A, D
2 C
3 E, F

Each bathtub type requires blending a certain amount of steel and zinc; the company has available 10
000 kilograms of steel and 5 000 kilograms of zinc. Each Edwardian bathtub requires 120 kilograms
of steel and 30 kilograms of zinc and each yields a profit of $500. Each Victorian bathtub requires
110 kilograms of steel and 25 kilograms of zinc and can be sold for a profit of $400.

(a) Draw the PERT diagram for the production of the handles of the antique bathtubs.
[4 marks]

(b) Construct and complete a table indicating the Earliest Start, Earliest Finish, Latest Start, Latest
Finish and Slack for all the activities.
[8 marks]

(c) What is the critical path of the production of the handles of the antique bathtubs?
[2 marks]

(d) What is the expected duration of the critical path?

[3 marks]

(e) What is the variance of the critical path?

[3 marks]

(f) Formulate, without solving, the full set of linear programming equations to find the production
mix that gives maximum profitability for production of the two types of antique bathtubs.
[5 marks]

END OF THIS EXAMINATION

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