SCS May/August 2022: Practice Task 2

Practice Task 2

You receive the following email from Peter Fodya: CFO of Snakwheel

From: Peter Fodya: CFO

To: Senior Finance Manager
Topic: Medicine delivery

According to research in Westaria, people over the age of 45 generally rely on at least one medication that they need to
take each day. Delivering medicine could be nearly as big a business as delivering fast food.

Our commercial team has developed a proposal to take us into medicine delivery. It is described in the attached
document.

I am very concerned about whether this is an appropriate industry for Snakwheel and also how to ensure we don’t get
into unacceptable areas of risk.

I need a report covering the following matters before I discuss this with our CEO:

 An evaluation of the benefits and drawbacks of this proposal

[sub task (a) = 40%]

 An analysis of the potential risks of developing this, and controls we can use to help ensure medicines get to
the right people at the right times

[sub task (b) = 60%]

The proposal referred to is included as Reference Material for this task

© Adrian Sims 2022

SCS May/August 2022: Practice Task 2

Reference material X

To: Board of Snakwheel Group

From: Rashida Tull: Marketing Director

Subject: Medicine delivery

The fast-food delivery market is nearing saturation, and the recent declines in our share price
show that investors have recognised this. We need new growth industries that we can dominate.

The high cost of prescription medicines mean that health providers are less willing to issue a
month’s supply of medicines to patients. They prefer to issue weekly. But this is not convenient for
patients who will not want to travel to their pharmacy every week, and many have limited mobility
and cannot travel.

A home delivery service would overcome these problems. Delivering these small, high value items
to people’s homes would fit with our business model.

Medicines are often distributed from specialist regional warehouses, but if these do not exist in
some places Snakwheel can build them and hold medicines itself ready to deliver.

Some medicines need to be stored in cool or refrigerated conditions. It is also critical that people
receive the right medicines in a timely way. Our recent key performance indicators show 97%
order accuracy for fast food and that 98% of fast food deliveries are within 30 minutes of orders
being received at the restaurants. We should be able to meet the requirements for satisfactory
medicine delivery.

Most of the deliveries can take place during the daytime and can fit in between the peak times of
fast food deliveries

Reference materials

© Adrian Sims 2022