Sustainable Business Models and Ethical Sourcing

This assignment explores sustainable business models and their implementation within a supply chain context. It analyzes various literature sources to understand how companies can adopt ethical sourcing practices, emphasizing the importance of transparency and accountability throughout the supply chain. The case study of Premier Investments provides a practical example of challenges and considerations related to sustainability and ethical sourcing in a real-world business setting.

Running head: SUSTAINABLE AND STRATEGIC ACCOUNTING
Sustainable and Strategic Accounting
Name of the Student:
Name of the University:
Author’s Note:

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SUSTAINABLE AND STRATEGIC ACCOUNTING
Table of Contents
Answer to Question No 1...........................................................................................................2
Reference List and Bibliography...............................................................................................5

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SUSTAINABLE AND STRATEGIC ACCOUNTING
Answer to Question No 1
This question has tried to recognise and explain the environmental and the social
concerns that are in relation to the operational activities of Premier Investment. Premier
Investment is a retail organization which concentrates on providing the exclusive garments to
their customers in the countries where they operate. Each and every organization has their
own strategies and every one of them constructs their social and environmental strategies
with respect to the concerns that are associated with them.
Premier Investment have identified that environmental concerns has been looking at
the environment of the country and eco-system where the organization operates. The other
environmental issue has been proper utilisation and incineration of the wastes that have been
obtained from the manufacturing process of Premier Investment (Home - Premier
Investments 2017). The social concerns that the company has tried to recognise has been
gaining knowledge about the changing trends and the tastes and preferences of the
consumers. The organization needs to analyse the market from time to time so that the
changes in the market can be understood and several strategies can be undertaken in order to
mitigate the social concerns.
In relation to the operational activities of the company, the three objectives that are
associated with the business sustainability commitments of Premier Investment has been to
look at the looking at the people associated with the organization. There are a variety of
individuals who are related to the operational functions of the company as an employee,
stakeholder or as a customer and therefore effective measures can be taken in order keep
them satisfied and happy so that they remain associated with the company for a long time
(Crane, & Matten 2014). The next business sustainability objective has been to understand
and look after the communities that are related to Premier Investment organizations. The
company tries to look into the communities in order to gain knowledge about their desires

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SUSTAINABLE AND STRATEGIC ACCOUNTING
and then looks to develop plans and strategies that would be influential for the manufacturing
of the products desired by the communities and assisting in the development of the
organization and the community (Grob, & Benn 2014). The third objective has been looking
at the environment of the area where the company thereby understanding the problems that
are prevalent so that effective performance measures can be taken in order to rectify the
matter.
The three objectives that are related to ethical sourcing of Premier Investment has
been developing the sourcing framework and models that would be constructed in accordance
to the policies and the principles. The next ethical objective has been framing the assurance
and promoting them to among the employees and the environment where the company
operates so that ethical processes are maintained (Perry et al., 2015). The third objective has
been establishment of the ethical raw material procurement so that the products produced and
the raw materials used are of ethical and are of good quality so that the customers feel
satisfied.
The two measures that could be made in order to measure the progress of the
organizations for the accomplishment of the objectives has been given below with the help of
the table.
Dimension Objective Possible Performance Measures
Business Sustainability 1.People 1. Initiatives for retention and
attraction of the existing and
potential employees and
customers.
2. Measuring the workplace
security and keeping personnel
to manage and supervise the
workplace environment
2.Community 1.Keeping relationship with the
Smiggle Community
Partnerships
2.Maintaining relationship with

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SUSTAINABLE AND STRATEGIC ACCOUNTING
PAW JUSTICE
3.Environment 1.Looking after the waste and
recycling of the wastes
generated during the process
manufacturing
2. Making sure that the energy
is used effectively.
Ethical Sourcing 1. Constructing
sourcing models with
the help of policies and
principles
1. Assessing the effectiveness
of the models with the help of
survey from the stakeholders
and the customers.
2. Assessing the models and
comparing with the ethics
constructed internationally.
2. Establishing and
promoting the
assurance
1.Comparing the assurance
with the assurance set by the
rival companies
2. Frequent analysis and the
review of the assurance so that
changes can be undertaken
3. Ethical Raw
Material procurement
1.Checking the raw material
before purchasing
2. Establishing good relation
with the supplier.
Answer to Question No 2
Particulars Amount Particulars
With Spare
Capacity
Without
Spare
Capacity
Direct Material per kg. $10 Transfer Price $24.70 $40
Direct Labour per kg. $5
Variable Overhead per kg. $3
Fixed Overhead per kg. $1
Total Cost per kg. $19
Add: Mark-Up 30%
Transfer Price per kg. $24.70

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SUSTAINABLE AND STRATEGIC ACCOUNTING
Answer to Question No 3
Period
Particulars 0 1 2 3 4 5 6 7
Initial Investment ($1,650
,000)
Annual Cash
Flow:
Service Charges
per customer
$0 $35 $35 $35 $35 $35 $35 $35
Nos. of Customers 0 35000 38500 42350 46585 51244 56368 62005
Service Revenue $0 $1,225,
000
$1,347,
500
$1,482,
250
$1,630,
475
$1,793,
523
$1,972,
875
$2,170,
162
Increase in Sales of
Jeans
$0 $550,0
00
$616,0
00
$689,9
20
$772,7
10
$865,4
36
$969,2
88
$1,085,
602
Total Incremental
Revenue
$0 $1,775,
000
$1,963,
500
$2,172,
170
$2,403,
185
$2,658,
958
$2,942,
163
$3,255,
765
Cost of Sales of
Jeans
$0 ($330,0
00)
($369,6
00)
($413,9
52)
($463,6
26)
($519,2
61)
($581,5
73)
($651,3
61)
Staff Costs $0 ($900,0
00)
($954,0
00)
($1,011
,240)
($1,071
,914)
($1,136
,229)
($1,204
,403)
($1,276
,667)
Material Costs $0 ($210,0
00)
($222,6
00)
($235,9
56)
($250,1
13)
($265,1
20)
($281,0
27)
($297,8
89)
Marketing Costs $0 ($46,00
0)
($48,76
0)
($51,68
6)
($54,78
7)
($58,07
4)
($61,55
8)
($65,25
2)
Other Costs $0 ($25,00 ($26,50 ($28,09 ($29,77 ($31,56 ($33,45 ($35,46

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SUSTAINABLE AND STRATEGIC ACCOUNTING
0) 0) 0) 5) 2) 6) 3)
Depreciation
Expenses
$0 ($235,7
14)
($235,7
14)
($235,7
14)
($235,7
14)
($235,7
14)
($235,7
14)
($235,7
14)
Net Profit before
Tax
$0 $28,28
6
$106,3
26
$195,5
32
$297,2
55
$412,9
97
$544,4
31
$693,4
18
Less: Tax
Expenses
$0 ($8,486
)
($31,89
8)
($58,66
0)
($89,17
6)
($123,8
99)
($163,3
29)
($208,0
25)
Annual after Tax
Profit
$0 $19,80
0
$74,42
8
$136,8
72
$208,0
78
$289,0
98
$381,1
02
$485,3
93
Add: Depreciation
Expenses
$0 $235,7
14
$235,7
14
$235,7
14
$235,7
14
$235,7
14
$235,7
14
$235,7
14
Annual after Tax
Cash Flow
$0 $255,5
14
$310,1
42
$372,5
87
$443,7
93
$524,8
12
$616,8
16
$721,1
07
Net Cash Flow ($1,650
,000)
$255,5
14
$310,1
42
$372,5
87
$443,7
93
$524,8
12
$616,8
16
$721,1
07
Cumulative Cash
Flow
($1,650
,000)
($1,394
,486)
($1,084
,343)
($711,7
57)
($267,9
64)
$256,8
48
$873,6
65
$1,594,
771
Payback Period 4.51
Discount Rate 20% 20% 20% 20% 20% 20% 20% 20%
Discounted Cash
Flow
($1,650
,000)
$212,9
29
$215,3
77
$215,6
17
$214,0
20
$210,9
10
$206,5
70
$201,2
48
Net Present Value ($173,329)
IRR 16.729%

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SUSTAINABLE AND STRATEGIC ACCOUNTING
Average Annual
after Tax Profit
$463,539
ARR 28.09%
Required Rate of Return
Particulars 12% 16% 20%
NPV
$309,10
2
$42,74
7
($173,329
)
Payback Period 4.51 4.51 4.51
ARR 28.09% 28.09% 28.09%
The recommendation that can be given to Just Jeans is that they should go on with the
proposal and the new recommendation has various aspects that would reduce the level of
sensitivity with respect to the financial impact of the new capital investment.

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SUSTAINABLE AND STRATEGIC ACCOUNTING
Reference List and Bibliography
Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review
to develop sustainable business model archetypes. Journal of cleaner production, 65,
42-56.
Chen, J. Y., & Slotnick, S. A. (2015). Supply chain disclosure and ethical
sourcing. International Journal of Production Economics, 161, 17-30.
Chkanikova, O., & Mont, O. (2015). Corporate supply chain responsibility: drivers and
barriers for sustainable food retailing. Corporate Social Responsibility and
Environmental Management, 22(2), 65-82.
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in
managing and measuring corporate social, environmental, and economic impacts.
Berrett-Koehler Publishers.
Grob, S., & Benn, S. (2014). Conceptualising the adoption of sustainable procurement: an
institutional theory perspective. Australasian journal of environmental
management, 21(1), 11-21.
Home - Premier Investments. (2017). Premier Investments. Retrieved 15 September 2017,
from http://www.premierinvestments.com.au
Kim, S., Colicchia, C., & Menachof, D. (2016). Ethical sourcing: An analysis of the literature
and implications for future research. Journal of Business Ethics, 1-20.