Company Case Analysis Vershire Company - 1662 Words

Vershire Company Case Analysis Commerce 4AA3 C03 Professor: Janet Pierce Name: Kaiwen Luo Student Number: 001300672 Due date: January 24th, 2017 Introduction Vershire Company is a diversified packaging company with several major divisions, including the Aluminum Can division which is one of the largest manufacturers of aluminum beverage cans in the United States. The Aluminum Can division has to meet customers’ cost and quality specifications or their standards for delivery and customer service, otherwise, customers would choose other available suppliers. Thus, it is important for the company to implement rigid budgetary control system and performance measurement and evaluation system. The major problem Vershire Company faced is†¦show more content†¦These visits are extremely significant since plant managers have an opportunity to explain their situations and controllers can be more familiarized with the rationale behind the numbers. As a result, a more accurate and detailed budget report can be produced. Planning system weaknesses: To begin with, fundamental assumptions, such as new plants, inventory carryovers, packaging trends, etc., which are used for initial sales forecast, are entirely made by corporate headquarters. However, the divisional managers assume full responsibility for the estimates they submitted to the corporate head office. As a result, they have to make efforts to increase the overall accuracy of forecast and avoid making changes in subsequent reviews of the budget. Moreover, each product line uses the same forecasting method. It is ineffective for the company to make accurate budget since factors affecting each product line are different, such as industry trends, customer preferences and so on. Lastly, instead of plant managers, the district sale managers raise the sales budgets. However, the plant managers are held accountable for this budgeted profit number, which is connected with their performance and is not controlled by them. Control system strengths: Initially, divisional general managers are given full control of their businesses except in the areas of raising capital and labor relations. Full control gives divisional managers power to makeShow MoreRelatedVershire695 Words   |  3 PagesCase 4-1 Vershire Company Internal Environment Analysis * Vershire is a diversified packaging company * Several major divisions * One of the largest manufacturers of aluminum beverage cans in the United States. * Plants scattered throughout the U.S * Key players include: CEO, divisional GM, vice presidents of marketing and manufacturing External Environment Analysis Industry competitors: * Five beverage container manufacturers accounted for 88% of the market. Read MoreVershire Company2962 Words   |  12 Pagesescribe the strengths and weaknesses in planning and control systemVershire Company!Settlement:a.    Pros:1.    In 1972 the industry experienced a revolution since the aluminum maker chosetwo kinds of processes in which a piece of metal inserted into the cupand closed at the top.  So in 1996 capable of producing more than2,000 cans per minute, because it has more efficient manufacturing processes.2.    Authorization limitation on the general manager of the division.  Division general manager hasfullRead MoreCase Study 4.1 Vershire Company1508 Words   |  7 PagesManagement Control Systems Case 4-1 Vershire Company The case 4-1 deals with the control system, budgeting process and performance measurement of Vershire Company, a large business in the metal can industry. Vershire experienced a strong pressure as they have to meet the customers` expectations about quality, customer service and prices because otherwise they will take another supplier. This situation leads to a very high demand for efficiency and effectiveness and therefore a good planning and