Managing Finance and Operations Essay

Added on - 21 Jul 2020

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MANAGING FINANCE AND OPERATIONS1|P a g e
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1(a)Operational and Regulatory factors to be considered by board..............................................1(b)Financing Alternatives for New Life Brewery.......................................................................4©Critical evaluation of financial worth.......................................................................................6Challenging the proposed plan:...................................................................................................4(d)Conclusion and recommendation................................................................................................5Conclusion...................................................................................................................................5Recommendations........................................................................................................................6REFERENCES................................................................................................................................72|P a g e
INTRODUCTIONNew life brewery is operating in beverage business. Becerage industry is growing at rapidrate and due to this reason, number of firms in mentioned domain are also elevating consistently.In the current report In this report, in context of firm’s operational and regulatory factors need tobe considered are described. Finance is the one of the important domain where firms needs tofocus heavily in order to improve their performance.Varied aspects of finance are discussed indetail. Calculation related to project evaluation methods are applied on data and interpretation ismade. Viability of the project is measured because of with the help of calculated figures. Figuresthat are taken into account in order to perform calculations are also challenged in order to makeproject more viable. In the current research study, varied other calculations are also performedlike break-even analysis and contribution analysis. Apart from this, operational and regulatoryfactors in respect to beer business are also discussed briefly. At end of the report on basis ofoverall workings, conclusion is formed derived.(a)Operational and regulatory factors to be considered by boardLegal partThere are number of operational and regulatory factors that need to be considered byBoard as per law of UK. This is because there are strict rules and regulations and firms arerequired to follow them in order to do business in a lawful manner. In case managers fail tocomply with these rules, strict action can be taken against them. Thus, it is very important for thefirms to follow all rules and regulations tightly. In past couple of years, those firms that are inbeer business tried to improve their corporate governance system so that it can be ensured that allrules are followed strictly in the organisation (Beer trade regulations,2012).It is observed that in UK, courts take strict decisions actions against firms who areinvolved in unethical practices. Thus, it becomes very important for the companies to developseparate team within their premise who will look after all legal matters and ensure that all rulesare abided by, for performing business operations. It can be observed that there are varied qualitystandards for beer that must be followed by managers. Some of these quality standards areexplained below.Minimum and maximum intensity of alcohol.Level of acidity in beer.1|P a g e
Additives that are added in beer.Sugar quantity in beer that is packed in bottle.Concentration of additives on fragmentation.Concentration of sulphur dioxide.Copper presence in beer.Beer blends.Rules for labeling of beer bottles: These are some of the important parameters that aretaken into account for different categories and subcategories of beer. As per rules, testingof beer is done in UK, by-UK Vineyards Association (UVKA). Apart from this, there arelabeling rules and regulations in respect to beer. It can be observed that labeling rulesapply to all beer-based products that are marketed in EU. In respect to specific situation,if there is no rule then food regulations are applied on them. For all firms that areoperating their businesses in UK it is mandatory foe them to furnish information aboutdifferent categories and sub categories of beer (Galbreath, 2011). In case not all relevantinformation is available, on packaged bottle then in that case warnings are given to thefirms and penalty is also charged on firm.Rules for keeping record of transactions: Record keeping is another factor that need tobe considered by Board. As per rules, it is mandatory for the firms to keep record ofaccomplishment of all transactions and movement in their goods and services. Means thatbeermaker have liability, in which it is responsible to give notification to local beerstandard branch inspector ,48 hours before production (Beer duty,2009). In this regard,on basis of analysis it can be said that firm is requiredto fill a form, WSB10 notificationfor enrichment. Business firm needs to keep record of accomplishment of enrichmentprocess of day-to-day operations.For example, it is mandatory for the firms to keeprecord of ransactionsof movement of graphs like from vineyard to berry.Rules for transportation of products: Commercial Accompanying Documents (CAD) arerequired by the firms to give information to relevant authority about logistics relatedoperations.This document is needed to be filled by the firm when grapes are transportedmore than 25 miles (Hanf, Belaya and Schweickert, 2012). CAD form also need to befilled by those who are growing grapes, which will be sold to beer companies. Each yearbefore harvest relevant entity needs to submit document to relevant authority. This thing2|P a g e
helps beer board to check berry record.On analysis, it can be said that in caseit isidentified that beer making firms failed to submit relevant documents then in that casestrict action can be taken against them. For this the regulatory authority on the businessfirm charges strict penalty. 24 hours before operation it is necessary to completeprocedures related to enrichment, de-acidification, sweetening, blending and packagingas well as sparkling beer.Rules for in depth recording of product related information: It is also mandatory forbeer making companies to record nature and quantity of products that they are producinglike cane, beet sugar and calcium bicarbonate. Managers need to forward informationabout quantity of goods that they produced for different beer to relevantauthority(Mitchell, Charters and Albrecht, 2012). Managers require giving details ofsupplier and date on which raw material was received from them. In case of bottling ofbeer legally firm need to maintain record under which it need to reveal date of packaging,number of packaging in single day and size of bottle. Electronic record of these factsneed to be kept in the firm. As per rules, Beer standard branch inspector must approvecomputer.Rules for import of beer products: Apart from this, in case of transport of beer also thereis strict need to follow rules very tightly. UK firms that import beer from other nationsneeds to ensure that all documents are scrutinized and all rules are followed in conform toEU rules. Several forms need to be received from exporting company like A VI 1 is thedocument that is issued in third party country under which beer imported in to Europeancommunity is fully described in detail (Beer duty,2009). In case consignment is splittingto different locations in UK then in that case it is mandatory to receive VI 2 forms.It isvery hard task for the managers to keep in mind every rule and there are chances offailure to comply with these rules. Government must try to simplify these rules so thatwith limited procedures all rules can be followed.Therefore, these are varied operational and legal rules and regulations that beer makingfirms or those companies that are selling beer needs to follow in their business. It can be said thatslight failure in following rules and regulations may prove costly to the firm. In case of failure tofollow rules and regulations firm image may tarnished among customers. Thus, it is veryimportant for Board members to focus on all relevant factors. In this regard they can do lot of3|P a g e
things such as they can form a team of 5 to 6 members who will look after entire process andwill ensure that each and every paper work is completed on time.Market information and developmentFigure1Trends in market4|P a g e
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