Case 1

1. Compute the ROI of each segment

Segment A
70,000
ROI= x 100=700 %
10,000

Segment B
200,000
ROI= x 100=500 %
40,000

2. Compute the components of ROI of each segment

Segment A
70,000
Profit Margin= =0.7
100,000
100,000
Asset Turnover= =10
10,000

Segment B
200,000
Profit Margin= =0.4
500,000
500,000
Asset Turnover= =12.5
40,000

Case 2
1. ROI of the division (before and after the acquisition)
Before Acquisition After Acquisition
Operating Income 30,000 35,000
Average Operating Assets 120,000 160,000
ROI 25% 21.875%

30,000
ROI= x 100=25 %
120,000
35,000
ROI= x 100=21.875 %
160,000

Before acquisition John’s bonus = P30,000 x 1% = P300

Operating income after acquisition = P30,000 + P5,000 = P35,000
Average operating assets after acquisition = P120,000 + P40,000 = P160,000

Since the ROI percentage is decreased from 25% to 21.875% John is not receive any bonus after
acquisition.
 2. Compute for Residual income of the division (before and after the acquisition)
Before Acquisition After Acquisition
Operating Income 30,000 35,000
Less: Bonus (300) -
Residual Income 29,700 35,000

Before acquisition John’s bonus = P30,000 x 1% = P300

Operating income after acquisition = P30,000 + P5,000 = P35,000

Case 3
1. Throughput time
Product A
Throughput Time=3+ 1+1+2=7

Product B
Throughput Time=2+ 0.5+ 0.5+3=6

2. Manufacturing Cycle Efficiency (MCE)

Product A
3
MCE= =0.428
7

Product B
2
MCE= =0.33
6

3. Delivery Time
Product A
Delivery Time=10+7=17

Product B
Delivery Time=7+ 6=13

Case 4
McDonald’s
McDonald's is the premier worldwide foodservice retailer with further than 32,000 regional
restaurants. Serving more extra than 58 million forms in 118 nations every day.

Organizational objectives
To produce excellent value, differentiation, and core strength areas for a business that has
cleared missions, purposes, and objectives that are essential and important to the strategic formulation
of a business.

Critical success factors of McDonald's

 1. Management of employees - McDonald's believe staff comes first and recognized that proud
employees provided greater service, which can make an incredible impression that will have an
impact on a customer's loyalty. The company provides a set of benefits for their internal staff,
such as:
 Employees are allowed to eat for free
 Employees have a month of paid holidays
 Employees have access to private health care
 Employees have discount cards
2. Developing brand image - McDonald's has gained fame for serving suppers effectively quickly.
In contrast with other comparative inexpensive food contenders.

Non-financial performance indicator

 Customer Satisfaction Index - it shows a measure of an organization's prosperity at addressing
clients' necessities. The cheap food chain acquired the least score in consumer loyalty among
restricted service, as indicated by a new report by the American Customer Satisfaction Index.
McDonald's fulfillment rating is right now at 71%.

Teacher’s Comment:
PM
B. 0.40
AU
A. 10.00
Case 3:
Keypoint: Segment A is more efficient