Page 14 - OCS Workbook - Day 1 Task (May 2018)

CIMA MAY 2018 – OPERATIONAL CASE STUDY

Quality

The company makes high quality products so an exam task could focus on assessing the costs of
quality (P1) and discussing whether TQM (E1 and P1) should be adopted.
Working capital
There are few references within the pre-seen to the working capital cycle (F1) but ratio analysis of
the financial statements indicates some concerns over high levels of inventory. This is particularly
concerning as older designs may become difficult to sell without excessive price discounting. This
suggests that some variants of the real exam will have tasks that look at Mansako’s working
capital policies. In particular, make sure you feel comfortable discussing whether the company
could change its inventory policies, say switching to just-in-time or using the EOQ model.
Organisational structure

Mansako is vertically-integrated with in-house operations including production, warehousing,
distribution and retail. Given this it is probably that one variant of the exam will include a task to
consider outsourcing (E1) one of these elements. Make sure you revise the arguments for and
against outsourcing and what transitional aspects such a move would involve.
Information systems

Given its customers’ willingness to buy online, Mansako’s business model is highly reliant on its
IT/IS strategy. It is thus a possible concern that Mansako’s digital business is managed using
generic rather than bespoke software. Make sure you are able to discuss different approaches to
IT/IS (E1) and make recommendations if necessary.

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