Page 11 - CIMA OCS Workbook May 2019 - Day 1 Tasks

VITAMINE FAMILIARISATION

Be careful how you set out your response if these two aspects are combined into a single task:
top-down incremental v bottom-up ZBB.

Decision making
We are told the company will be developing new product lines so expect to discuss the risks
associated with this using CVP analysis, break-even, etc.
In addition, there will probably be exam variants that explore decision making under constraints –
for example, if Vitamine had labour shortages. Be prepared to discuss the best approach –
contribution per labour hour or throughput or... – and justify why that approach is to be
preferred.

E1
Organisational structure
Vitamine is currently organised on functional grounds. An obvious change would be to switch to
divisional to facilitate growth. Make sure you revise the pros/cons and other issue associated with
such a switch.
IT/IS

VitaMine operates a JiT manufacturing and purchasing system and currently has a logistics system
that records the movement of goods from receipt of raw materials to distribution of finished
goods. However, there is no indication that there is a system (e.g. DSS, EIS, MRP) that helps with
planning and decision making. Be prepared to be able to discuss the benefits of such systems.
Operations

VitaMine has invested heavily in new manufacturing equipment and has a significant degree of
automation. However, there may still be scope to use BPR to improve the approach further or a
change in capacity management to reduce inventory levels.
VitaMine currently uses its own fleet of haulage trucks in Eastland, so a possible exam task could
be to consider outsourcing. Ensure you can discuss the pros and cons of this move.
Marketing – 4Ps

Marketing is always a key issue within the operational case study. In the case of VitaMine obvious
areas could be to examine selling B2C, perhaps through a website and the important role of social
media marketing

Human Resources
We are told that the rapid expansion of the company has caused problems for HRM and that new
processes are required to ensure the well-being of both existing and new staff. We are not told
specific issues but make sure you are ready to discuss implementing new recruitment and
induction processes, improving training and/or improving processes relating to appraisals.

F1
Working capital

Inventory levels seem excessively high, given we are supposed to be operating a JiT system, so
make sure you can discuss different approaches to reducing this and the likely pros and cons of
each approach.

Furthermore, many companies struggle to manage working capital effectively when experiencing
high growth, so ensure you can discuss options to improve receivables management and cash
flow as well.

KAPLAN PUBLISHING 7