Exam

This exam solution analyzes the application of Balanced Scorecard and Benchmarking in AB Limited, a business equipment solutions provider. It explores how these tools can be used to measure performance, identify areas for improvement, and gain a competitive advantage. The solution also includes a critical evaluation of standard costing and its applicability in manufacturing and service businesses.

EXAM

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 3............................................................................................................................................1
3.a Explaining balance score card with its application in AB limited for measuring
performance.................................................................................................................................1
3.b Explaining benchmarking with its application in AB limited for measuring performance...3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Balanced score card is performance metric with context of strategic management for
improving and identifying internal functions of business with external outcome. Benchmarking is
replicated as process of comparing business entity as process against other organization. The
present report will discuss about AB Limited as it is giving different business equipment
solutions for purpose of local business. This report will help in evaluating performance with
application of monthly financial reports for purpose of analysing it profitability on kinds of
equipment.
TASK 3
3.a Explaining balance score card with its application in AB limited for measuring performance
The balanced scorecard is referred as management system whose objective is to
transformed as AB Limited's strategic goals for purpose of setting performance objectives and it
will be monitored, measures and altered if there is necessity for ensuring that its strategic goals
are accomplished or not. It is tool for monitoring the strategic decisions which are undertaken by
AB limited on basis of established specific indicators and it should be capable to permeate via
four aspects such as customer, financial, internal process along with learning and growth (Muda,
Erlina and Nasution, 2018).
AB Limited must have presence of different measurement capabilities and to expand its
monitoring which allows for relevant points of its supply chain which is going to be measured in
this company. It helps in bringing various improvement with appropriate understanding of
strategy which is elaborated through top level and it is assessed so that every employee is
engaged in process. It could be performed through appropriate development of strategic maps.
 Financial Outlook: For purpose of succeeding financially, how company is valued from
shareholders. AB Limited has to increase profitability which could be measured from
financial statements.
 Customer perspective: The vision could be attained by tracing consumer views on basis
of organization. There is requirement of reflecting that it how its equipments are superior
in quality as compared to its competitor. It will be measured by consumer and number of
equipments which are launched per quarter (Abadi, Sari and Widiyarto, 2018).
 Internal process perspective: The customer will be satisfied by extracting information
about business process for accomplishing excellence. AB Limited could attain excellence
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in innovation along with quality control as it could be measured through appropriate
statistical analysis of reports of consumer care services and social networks.
 Learning and growth perspective: For accomplishing vision, it would sustain capability
for improving and changing. It could be easily measured through number of hours spent
for training and certificates accomplished through employees (Balanced Scorecard,
2017).
Strategic map for AB Limited
Objectives Goals Indicators Initiatives
Financial
perspective
To raise
profitability
The profitability
could be raised by
10%
Financial
statements
Negotiating with
suppliers and
innovative credit
policies with
perspective of
distributors
Customer
perspective
Reference for
equipment's
variety
Increment in
launching
innovative
equipments in
each quarter by
10%.
Measuring
innovative
equipments which
are launched in
each quarter
Creation of
committee for
innovation and
development
Internal process
perspective
Capability of
developing
innovative
equipment on
constant basis
Taking initiative
of at least 4
innovative
equipment
development in
every month
Reports of project
innovation
Acquiring
software for
purpose of
managing
development of
equipment
Learning and
growth
perspective
Presence of
extremely
qualified staff for
equipment
Necessity of
comprising 2
professionals for
equipment
Numerous
equipment
development
professionals
Choosing
employees to gain
masters training
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development development
holding masters
degree
holding masters
degree
3.b Explaining benchmarking with its application in AB limited for measuring performance
Bench-marking is replicated as process of measuring performance of products, services
or process of AB Limited which is against business and considered appropriate best in its
industry. It has to determine internal opportunities for purpose of improvement. The superior
performance could be studied with possibilities of different break down. These process could be
compared with business operation for implementing changes for yielding significant
improvements. There is presence of two types of opportunities for improvement such as dramatic
and continuous (Aguilar and et.al., 2018).
It could be implied through customised aspect on basis of organization policies,
availability of resources along with process or project to deal with various issues. It gives
recommendation about particular process in AB Limited could be strengthened. It is meant for
improving various discrete areas for AB Limited and to monitor shifting strategies of competitor
with its approaches. There are various drivers of different initiative of benchmarking in AB
Limited. Generally, it comes through internal perspective where process and approach could be
improved. The data will be gathered on its performance at unique point in time undertaken in
huge circumstances for determining gaps and areas of strengthening in AB limited.
AB Limited could compare itself from its competitors with attempt to determine and
substitute gaps in delivery of equipment and service to gain competitive advantage. The
initiatives of benchmarks gives insights related to process and thinking of competitors. With
reference to strategic benchmarking, it is used for elaborating AB Limited's interest with
comparison of performance from best in class and deemed for world class performance. It
comprises engagement to look beyond core industry of AB Limited which are replicated for their
success with specific process or function (Yadav, Seth and Desai, 2018).
AB Limited has improved practices of customer services which might be compared for
processes and metrics which are against its successful competitor. In case negative discrepancies
are determined or variations in measures, it might embark on improvement of process for
strengthening its performance and to increase profitability. AB Limited will measure and observe
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operation of competitor and in some industries, it will send its employees as consumer for
gaining direct experience (Understanding the purpose and use of Benchmarking, 2018).
Question 4
A) Uses of standard costing and reasons for reviewing standards
The standard costing is effectively used in initiating controlling over cost. Another use is
that it helps in simplifying valuation of inventory and improving upon pricing of items. It is
useful as it helps in implementing and set benchmark for estimating future performance in the
best way possible (Baguley, 2017). It is beneficial as it helps in contributing to budgeting
function of organization.
The reasons for reviewing standards are as follows-
 It assists in making comparison of planned performance with that of actual and extract
deviations if any.
 It is required to review and monitor standards as it helps management to take corrective
action for improvement of services quite effectually.
 Setting and reviewing standards help in eradicating inefficiencies and enhance level of
efficiency of operations of AB Ltd in effective manner.
 Cost awareness by management is attained as standard cost act as a target cost for
achieving planned performance.
B) Critical evaluation of standard costing to apply in manufacturing and service businesses
The standard costing is one of the important function which is used in preparing and
setting benchmark as per the planned performance. The actual performance is then compared
with it to analyze deviations if any in the performance. The standard costing can be applied to
service and manufacturing businesses. This is evident from the fact that both type of businesses
analyses stock and then seek for valuation in effective manner (Ross, 2017). Moreover, it can be
said that it is applicable to processing, service and manufacturing industries as it leads to
correctly price products in effectual manner. The standard costing is used for revealing variances
that arises among expected and actual costs which is cost-effective method for manufacturing
companies.
While, for service industry, standard costing is also helpful in service industry where
operating cost system is applicable such as transport, gas and water etc. The company is able to
analyse per passengers and expected and actual performance in relation to the transport business
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can be assessed. Moreover, deviations can be analyzed and management can take decisions.
Thus, standard costing is applied to both businesses.
CONCLUSION
From the above study it had been concluded that AB Limited could improve its
performance with application of Balanced score card and benchmarking. It had shown that BSC
is strategic management and planning system which is used for communicating when they are
trying to attain. In the similar aspect, it aligns regular work with strategy. Further, with
application of benchmarking in AB Limited it is considered as powerful tool for promoting
continuous improvement in its innovative equipment.
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REFERENCES
Books and Journals
Abadi, S., Sari, K .P. and Widiyarto, S., 2018. MODEL PENGUKUR KINERJA PERGURUAN
TINGGI SWASTA DI KABUPATEN PRINGSEWU MENGGUNAKAN METODE
BALANCE SCORECARD DAN FUZZY MULTIPLE ATTRIBUTE DECISION
MAKING. SEMNASTEKNOMEDIA ONLINE. 6(1). pp.2-8.
Muda, I., Erlina, I. Y. and Nasution, A. A., 2018. Performance Audit and Balanced Scorecard
Perspective. International Journal of Civil Engineering and Technology. 9(5). pp.1321-
1333.
Yadav, G., Seth, D. and Desai, T .N., 2018. Application of hybrid framework to facilitate lean six
sigma implementation: a manufacturing company case experience. Production Planning &
Control. 29(3). pp.185-201.
Baguley, P., 2017. Best Practices in the Cost Engineering of Through-Life Engineering Services
in Life Cycle Costing (LCC) and Design To Cost (DTC). In Advances in Through-life
Engineering Services (pp. 275-289). Springer, Cham.
Ross, J. E., 2017. Total quality management: Text, cases, and readings. Routledge.
Aguilar, E. and et.al., 2018, April. Quality control and homogenization benchmarking-based
progress from the INDECIS Project. In EGU General Assembly Conference
Abstracts (Vol. 20. p. 16392).
ONLINE
Balanced Scorecard. 2017. [Online]. Available through
<https://www.balancedscorecard.org/BSC-Basics/About-the-Balanced-Scorecard>.
Understanding the purpose and use of Benchmarking. 2018. [Online]. Available through
<https://www.isixsigma.com/methodology/benchmarking/understanding-purpose-and-use-
benchmarking/>.
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