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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. KPIs provide targets for teams to shoot for, milestones to gauge progress, and insights that help people across the organization make better decisions. In this context, KPIs like net profit, productivity growth, customer complaints, and staff absenteeism are crucial for assessing business performance.
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 data shows mixed results regarding the performance of Wilkinson's Window Tinting after the purchase of the new machinery.
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Net Profit Figure: There was a significant decline in net profit from 230,000 in Year 2. This suggests that the investment in new machinery might have incurred high initial costs relative to the revenue generated, indicating that the change may not have improved profitability.
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Rate of Productivity Growth: The rate increased from 2% to 8%, reflecting improved efficiency and output from the new machinery. This indicates that the automation process is positively affecting productivity.
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Number of Customer Complaints: The decrease in customer complaints from 112 to 28 shows that the quality of service or product has likely improved, suggesting effective machinery usage and better handling of customer needs.
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Rate of Staff Absenteeism: However, the change in staff absenteeism is concerning, as it increased from an average of 4 days to 12 days per staff member. This might suggest employee dissatisfaction or anxiety related to the automation process, possibly due to fears about job security.
In conclusion, while there are positive signs in productivity and customer satisfaction, the declines in net profit and increases in absenteeism highlight significant issues that may need to be addressed. The new machinery has brought some benefits but also has associated challenges that need to be managed for overall performance improvement.