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The manager of Wilkinson's Window Tinting was disappointed with the performance of the business after one year of trading - VCE - SSCE Business Management - Question 3 - 2018 - Paper 1
Question 3
The manager of Wilkinson's Window Tinting was disappointed with the performance of the business after one year of trading. As a result, she decided to purchase new m... show full transcript
Worked Solution & Example Answer:The manager of Wilkinson's Window Tinting was disappointed with the performance of the business after one year of trading - VCE - SSCE Business Management - Question 3 - 2018 - Paper 1
Step 1
Define the term 'key performance indicator'.
Answer
A key performance indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs to evaluate their success at reaching targets. KPIs provide crucial data that helps managers assess performance and make informed decisions.
Step 2
With reference to the data above, analyse the extent to which the purchase of the new machinery has assisted Wilkinson’s Window Tinting in improving the performance of the business.
Answer
The analysis of key performance indicators (KPIs) for Wilkinson’s Window Tinting illustrates a mixed outcome following the purchase of new machinery.
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Net Profit Figure: The net profit significantly decreased from 223,000 in Year 2. This substantial drop suggests that the investment in new machinery may not have translated into immediate financial benefits, possibly due to high operational costs or underutilization of the new equipment.
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Rate of Productivity Growth: The productivity growth rate improved from 2% to 8%, indicating that the new machinery has contributed to a more efficient production process, allowing the company to potentially serve more customers or complete jobs faster.
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Number of Customer Complaints: The reduction in customer complaints from 112 to 28 highlights a positive outcome of the automation, suggesting improvements in product quality or service delivery. Fewer complaints typically reflect a higher level of customer satisfaction.
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Rate of Staff Absenteeism: The average rate of staff absenteeism increased from four days to 12 days per year per staff member. This rise may indicate that employees are feeling more pressure or job insecurity due to automation, which could negatively affect morale and performance.
Overall, while the new machinery has positively impacted productivity and reduced customer complaints, it has failed to enhance profitability and may have contributed to lower employee morale. Therefore, a balanced approach in managing both technology and workforce engagement is vital for future success.