Question 2

Tim Henry has been involved in the manufacturing and trading component AZ business for
many years. Tim Henry established the Nilai branch in order to expand his business in 2019.
Tim Henry listed the following results of newly established Nilai branch in 2019:
  Target performance Actual Performance
Number of Customers 350 385
Total Sales RM1,400,000 RM716,000
Number of Warranty Claims 14 8
Number of staff 10 8
Staff training cost RM35,000 RM36,000
Staffing remuneration RM280,000 RM153,600
Number of new products    
launched 3 5
Number of machine RM200,000 RM60,000
maintenance costs    
Net Profit/(Loss) RM280,000 (RM76,000)
Investment Capital RM3,000,000 RM2,700,000
Required:
(a) Using the four perspectives of Balanced Scorecard (BSC) approach, evaluate the actual
performance in 2019 against the target performance and for each perspective, you are
required to provide two (2) points. (Support your evaluation using the necessary ratios).
(b) Indicate and discuss any five (5) key factors that has a positive impact on the new branch
performance.
(c) The Business Development Manager argued that more information should be assessed in
order to provide more insight for better business performance assessment. You are required to
propose any six (6) additional required information for better business performance
assessment.

INTI International College Subang

Past Semester Exam Question
January 2020 Session
Suggested Answers Guide For Question 2 (a)
Students may provide comments based on the following points or any other justifiable
points. Each point 1 mark and maximum 8 marks for this section
1) The branch outperform in term of total number of customers in 2019 with 10% higher
than that of the targeted performance i.e. (385 customers – 350 customers)/ 350
customers x 100%.
2) However, the actual sales per customer is below the targeted performance i.e. targeted
sales per customer is RM4,000 per customer whereas actual sales per customer is only
RM1,860 per customer.
3) There is a lesser number of warranty claims in actual performance as compared to that of
the targeted performance. However, such result is not conclusive as the actual total sales
is far lesser than the targeted total sales.
4) The branch managed to secure larger number of customers with lower number of staff as
compared to that of the preset target. i.e. targeted customer number per staff ratio is 35:1
whereas actual customer number per staff ratio is 48:1 (approximately).
5) The branch able hire staff at lower pay. The actual average annual remuneration per staff
is only RM19,200 i.e. RM153,600 / 8 staff whereas the targeted average annual
remuneration per staff is RM28,000 i.e. RM280,000/10 staff.
6) The business spent higher amount of training cost per staff i.e. targeted training cost per
staff is RM35,000/10 staff = RM3,500 per staff whereas actual training cost per staff is
RM36,000/8 staff = RM4,500 per staff. But the actual overall sales generated per staff (i.e.
RM716,000/8 staff = RM89,500/staff) is lower than the targeted overall sales generated
per staff (i.e.RM1,400,000/10 staff = RM140,000/staff).
7) The branch managed to create and launch higher number of new products as compared to
that of the targeted number of new products. This could be due to the business has high
commitment and good internal business research and development support.
8) The branch incurred lower machine maintenance cost as compared to that of the targeted
machine maintenance expenses. This may cause negative impact on the internal business
production efficiency.
9) The branch made losses in 2019 and failed to meet the targeted profit in 2019.
10)The branch encountered negative return on investment ratio i.e. -RM76,000
/RM2,700,000 x 100% = - 2.8% (approximately).
 Suggested Answers Guide For Question 2 (b)

Students may indicate and discuss the following points or any other justifiable
points on key factors that have positive impact on the new branch performance.
Each point 1 mark and maximum 5 marks for this section
1) Employ Nilai resident because local staff has a better understanding on the Nilai
customers’ expectation and needs.
2) Conduct market survey in Nilai in order to gather relevant information on local
people’s perceived value and expectation, before new products are being
engineered and launched.
3) Set proper standard operation procedure in provision of sufficient maintenance
of machine in order to ensure the machine always in good condition.
4) Identify strategic location of the branch that allow easy access to customers.
5) Assign at least one of the head quarter’s top management personnel to sit in
the branch management team.
Suggested Answers Guide For Question 2 (c)
Students may propose additional required information for better business
performance assessment based on the following points or any other justifiable
points. Each point 2 marks and maximum 12 marks for this section.
1) The customers’ profile including categories of customers such as corporate and
individual; customers’ with various level of purchase quantity; ranking of product
types popularity and etc. Customers’ with different profile have different
expectation.
2) The proportion of customers’ payment mode in term of cash and credit. As
compared to that of cash sales, credit sales tend to boost up sales quantity but
may attract higher credit recovery risks.
3) The demographic of population in Nilai. Management will be able to provide
suitable products and services that able to meet expectation of both customers
and potential customers in Nilai in order to improve the business profitability at
the same time.
4) More details on the types of warranty claims. With identified types of
warranty claim, the management able to focus on the identified issues
and response the claim effectively. So that the management able to
minimise or avoid such similar warranty claims in future.
5) It will be good to identify staff in terms of profession, job functions,
experience and education background and etc. With appropriate staff
profile information, management will be able to design and arrange
relevant and suitable training in order to develop staff capabilities
effectively.
6) Should indicate more detailed information about the new launched
products instead of only the number of new launched products in order to
have more insight about the new launched products. For examples, each
new launched product sales value, types of customers who purchased the
new launched products, any customers’ complaints on the new launched
products and etc.