ice cream (jojo)

7/25/2019 Ice Cream (Jojo)

1/21

Midwest Ice Cream Company

Facility #1 : Midwest Ice Cream Company

Basic Facility Info

Facility ID 100000135267

Deregistered (Yes/No) No

Facility Name Midwest Ice ream om!a"y

#treet $ddress %i"e 1 630 Meadow #treet

ity &el'idere

#tate I%

i! ode 6100

i! ode *+te"sio" 332

o,"ty &oo"e o,"ty

113t- o"gressio"al District I%16. Illi"ois 16

w"er or !erator Name Midwest Ice ream om!a"y

are"t om!a"y Dea" Midwest%%

%atit,de 2261667

%o"git,de 4036111

N,mer o M #,missio"s 5

Ma! t-is acility link to map

Most Recent Submission Info

M ID 100001613

#,missio" 8y!e re'ised s,missio" or acility

#,missio" Date 06/0/201

easo" For #,missio" 54year ,!date (0 F 6190()(1))

rocess 8o+ic $mo,"t 8otal (ls) 000

rocess Flammale $mo,"t 8otal (ls) 0

Search Criteria sed !More"

%e'el o Detail

8y!e o e!ort ,t!,t

Extended GO

Text (HTML) GO
http://www.arcgis.com/home/webmap/viewer.html?webmap=8c29fa208027479182ac7d4ee35517aa&center=-88.836453,42.262847&marker=-88.836453,42.262847,,Click%20on%20facility%20dot%20for%20facility%20info,,Midwest%20Ice%20Cream%20Company&level=13http://data.rtknet.org/rmp/rmp.php?facility_id=100000135267&database=rmp&detail=3&datype=T#searchcriteriahttp://www.arcgis.com/home/webmap/viewer.html?webmap=8c29fa208027479182ac7d4ee35517aa&center=-88.836453,42.262847&marker=-88.836453,42.262847,,Click%20on%20facility%20dot%20for%20facility%20info,,Midwest%20Ice%20Cream%20Company&level=13http://data.rtknet.org/rmp/rmp.php?facility_id=100000135267&database=rmp&detail=3&datype=T#searchcriteria


2/21

rocess $mo,"t 8otal (ls) 000

N,mer o ote"tial site o"se:,e"ce rocesses 1

ote"tial site o"se:,e"ce 8o+ic $mo,"t 8otal (ls) 000

ote"tial site o"se:,e"ce Flammale $mo,"t 8otal (ls) 0

ote"tial site o"se:,e"ce $mo,"t 8otal (ls) 000

$ll rocess N$I# 31152

*+ec #,mmary #,missio" Date 06/0/201

$ecuti%e Summary (Facility ;1 . Midwest Ice ream om!a"y e+ec,ti'e s,mmary. all)

*+ec,ti'e #,mmary

F$I%I8Y $ND *$ND%*D

Midwest Ice ream om!a"y ormerly ?"ow" as Dea" Foods om!a"y/&el'idere !rocesses Ice ream!rod,cts 8-e acility ,tili@es a"-ydro,s ammo"ia as a rerigera"t to mai"tai" !ro!er tem!erat,res ormil?cream a"d ice cream wit-i" t-e acility$"-ydro,s ammo"ia is a" eecti'e rerigera"t t-at is ,tili@ed y",mero,s ood !rocessi"g acilities $mmo"ia is "ormally a gas at amie"t tem!erat,re -owe'er -ere it is-a"dled as a gas li:,iied ,"der !ress,re 8-e reigeratio" system co"sists o a o"trol4!ress,re recei'ere'a!orators o"de"sers'essels com!ressors!i!i"g a"d 'al'es$ID*N8$% *%*$#* *A*N8IN $ND *M*a@ard $"alysis(>$Bs)rocess #aety I"ormatio" re4start,! e'iew Ma"ageme"t o -a"ge Mec-a"ical I"tegrity o"tractor#aety a"d >ot wor?s !ermits*M*$M$8 team to i"cl,de all s-its a"d e'ac,tio" drills Ce willco"ti",e to o!erate a"d mai"tai" t-e system i" accorda"ce wit- II$


3/21

im!leme"t a"d ollow #>$ #M !rogram i" co","ctio" wit- t-e is? Ma"ageme"t la"

Submission & 'ther Facility Info

N,mer o F,ll 8ime *m!loyees 120

w"er or !erator Name Midwest Ice ream om!a"y

w"er or !erator $ddress %i"e 1 630 Meadow #treet

w"er or !erator ity &el'idere

w"er or !erator #tate I%

w"er or !erator i! 6100

w"er or !erator i! *+te"sio" 339

are"t D," a"d &radstreet N,mer 0

#eco"d are"t D," a"d &radstreet N,mer 0

N,mer o F,ll 8ime *m!loyees 120

N,mer o F8* &I Flag No

o'ered y #>$ #M #ta"dard Yes

o'ered y *$ #ectio" 302 Yes

o'ered y $$ 8itle A No

%ast #aety I"s!ectio" Date 10/31/2013

%ast #aety I"s!ectio" &y FM $ #tar or Merit a"?i"g No

%* Name &oo"e o,"ty %*

Submission & Contact Info (Facility ;1 . Midwest Ice ream om!a"y M s,missio" ;1 . 20140640)

w"er or !erator -o"e 1552105

Facility D," a"d &radstreet N,mer 3191721

M o"tact Dale Folt@

M o"tact 8itle la"t Ma"ager

M o"tact *mail daleEolt@dea"oodscom

Submission & (dditional Info

M om!lete Flag Yes

redicti'e Fili"g No

No M $ccide"ts %ast 5 Years No


4/21

om!lete -ec? Date 06/0/201

ostmar? Date 06/0/201

$""i'ersary Date 06/0/2019

o"ide"tial &,si"ess I"ormatio" No

Submission & )at*)on+ Info

%atit,de 2261667

%o"git,de 4036111

Aalid %at/%o"g Yes

%at/%o"g Met-od I"ter!olatio" 4 Ma!

%at/%o"g %ocatio" 8y!e e"ter o Facility

F# %atit,de 2260

F# %o"git,de 4361

F# %at/%o"g Descri!tio" %$N8 *N8$N* (


5/21

M $ccide"t $mo,"t 8otal (ls) 0

8otal M $ccide"t Deat-s 0

8otal M $ccide"t I",ries 0

8otal M $ccide"t *'ac,ated/#-elteri"g I" lace 0

8otal M $ccide"t ro!erty Damage G0

-rocesses(Facility ;1 . Midwest Ice ream om!a"y M s,missio" ;1 . 20140640 !rocess ;1 . $mmo"ia#ystem)

rocess Descri!tio" $mmo"ia #ystem

rogram %e'el 3


8o+ic $mo,"t 8otal (ls) 000

Flammale $mo,"t 8otal (ls) 0

rocess $mo,"t 8otal (ls) 000

N,mer o rocess -emicals 0

N,mer o 8o+ic Corst4ase #ce"arios 1

N,mer o 8o+ic $lter"ate #ce"arios 1

N,mer o Flammale Corst4ase #ce"arios 0

N,mer o Flammale $lter"ate #ce"arios 0

-rocess Chemicals

rocess -emical ID $mmo"ia (a"-ydro,s)

$# ",mer 0076617

-emical 8y!e 8o+ic

rocess -emical $mo,"t (ls) 000


-rocess

Chemicals(Facility ;1 . Midwest Ice ream om!a"y M s,missio" ;1 . 20140640 !rocess ;1 .

$mmo"ia #ystem !rocess c-emical ;2)

rocess -emical ID ,lic $ -emical

$# ",mer 000000000

rocess -emical $mo,"t (ls) 0



6/21

.orst&Case ,o$ic Scenarios

erce"t Ceig-t (Cit-i" Mi+t,re) 100

-ysical #tate


7/21

$cti'e Mitigatio" 4 Ne,trali@atio" No

$cti'e Mitigatio" 4 *+cess FlowAal'es

No

$cti'e Mitigatio" 4 Flares No

$cti'e Mitigatio" 4 #cr,ers No

$cti'e Mitigatio" 4 *merge"cy#-,tdow"

Yes


-rocess/(ICS

(Facility ;1 . Midwest Ice ream om!a"y M s,missio" ;1 . 20140640 !rocess ;1 .$mmo"ia #ystem !rocess N$I# code ;1 . 31152)

N$I# ode 31152. Ice ream a"d Fro@e" Dessert Ma",act,ri"g

-re%ention -ro+ram 0

#aety I"o e'iew Date 12/02/2011

>$ =!date Date 05/22/2013

>$ 8ec-"i:,e 4 C-at I No

>$ 8ec-"i:,e 4 -ec?list No

>$ 8ec-"i:,e 4 C-at I/-ec?list Yes

>$ 8ec-"i:,e 4 >$ No

>$ 8ec-"i:,e 4 FM*$ Yes

>$ 8ec-"i:,e 4 F8$ No

>$ -a"ge om!letio" Date 06/13/2013

>a@ard Ide"tiied 4 8o+ic elease Yes

>a@ard Ide"tiied 4 Fire No

>a@ard Ide"tiied 4 *+!losio" Yes

>a@ard Ide"tiied 4 ,"away eactio" No

>a@ard Ide"tiied 4 olymeri@atio" No

>a@ard Ide"tiied 4 'er!ress,re Yes

>a@ard Ide"tiied 4 orrosio" Yes

>a@ard Ide"tiied 4 'erilli"g Yes

>a@ard Ide"tiied 4 o"tami"atio" No


8/21

>a@ard Ide"tiied 4 *:,i!me"t Fail,re Yes

>a@ard Ide"tiied 4 ooli"g %oss Yes

>a@ard Ide"tiied 4 *art-:,a?e Yes

>a@ard Ide"tiied 4 Flood Yes

>a@ard Ide"tiied 4 8or"ado Yes

>a@ard Ide"tiied 4 >,rrica"e No

rocess o"trols 4 Ae"ts Yes

rocess o"trols 4 elie Aal'es Yes

rocess o"trols 4 -ec? Aal'es Yes

rocess o"trols 4 #cr,ers No

rocess o"trols 4 Flares No

rocess o"trols 4 Ma",al #-,tos Yes

rocess o"trols 4 $,to #-,tos Yes

rocess o"trols 4 I"terloc?s Yes

rocess o"trols 4 $larms Yes

rocess o"trols 4 eyed &y!ass No

rocess o"trols 4 *merge"cy $ir No

rocess o"trols 4 *merge"cy ower No

rocess o"trols 4 &ac?,! ,m! No

rocess o"trols 4


9/21

Mitigatio" #ystems 4 Cater ,rtai"s No

Mitigatio" #ystems 4 *"clos,re Yes

Mitigatio" #ystems 4 Ne,trali@atio" No

Mitigatio" #ystems 4 No"e No

Mo"itori"g #ystems 4 rocess $rea Yes

Mo"itori"g #ystems 4 erimeter No

Mo"itori"g #ystems 4 No"e No

-a"ges #i"ce >$ 4 ed,ced I"'e"tory No

-a"ges #i"ce >$ 4 I"creased I"'e"tory No

-a"ges #i"ce >$ 4 rocess arameters No

-a"ges #i"ce >$ 4 rocess o"trols No

-a"ges #i"ce >$ 4 rocess Detectio" No

-a"ges #i"ce >$ 4 erimeter Mo"itori"g No

-a"ges #i"ce >$ 4 Mitigatio" #ystems No

-a"ges #i"ce >$ 4 No"e ecomme"ded No

-a"ges #i"ce >$ 4 No"e Yes

roced,re e'iew Date 06/13/2013

8rai"i"g e'iew Date 10/17/2013

8y!e o 8rai"i"g 4 lassroom Yes

8y!e o 8rai"i"g 4 " t-e Ko Yes

om!ete"cy 8esti"g 4 Critte" 8ests Yes

om!ete"cy 8esti"g 4 ral 8ests Yes

om!ete"cy 8esti"g 4 Demo"stratio" Yes

om!ete"cy 8esti"g 4 ser'atio" Yes

Mai"te"a"ce e'iew Date 0/2/201

Mai"te"a"ce I"s!ectio" Date 0/2/201

*:,i!me"t 8ested *'a!orators

Ma"ageme"t o -a"ge Most ece"t Date 09/20/2012

Ma"ageme"t o -a"ge e'iew Date 09/20/2012

re4start,! e'iew Date 0/16/2012

om!lia"ce $,dit Date 11/01/2011


10/21

om!lia"ce $,dit -a"ge om!letio" Date 12/01/2011

artici!atio" la" e'iew Date 10/17/2013

>ot Cor? e'iew Date 10/07/2013

o"tractor #aety e'iew Date 07/29/2013

o"tractor #aety *'al Date 03/11/2013


-re%ention -ro+ram 0Chemicals

(Facility ;1 . Midwest Ice ream om!a"y M s,missio" ;1 . 20140640 !rocess;1 . $mmo"ia #ystem !rocess N$I# code ;1 . 31152 !re' !rogram 3 ;1 !re'!rogram 3 c-emical. all)

rocess -emical ecord ID

100006216

-re%ention -ro+ram 0 ,e$t

re'e"tio" rogram Descri!tio"

$"-ydro,s $mmo"ia erigeratio" re'e"ti'e Mai"te"a"ce

mer+ency Response -lan Info

Facility I" omm,"ity la" Yes

Facility w" es!o"se la" Yes

#!eciic Facility es!o"se la" Yes

I"orm roced,res i" es!o"se la" Yes

*merge"cy are i" es!o"se la" Yes

la" e'iew Date 01/0/201

es!o"se 8rai"i"g Date 0/30/2013

%ocal es!o"se $ge"cy &el'idere Fire De!artme"t

%ocal es!o"se $ge"cy -o"e 155270

#,ect 8o 4 #>$ *$ Yes

#,ect 8o 4 #>$ >$C* Yes

#,ect 8o 4 C$ Yes

#,ect 8o 4 $ No

#,ect 8o 4 $ No

#,ect 8o 4 #tate *$ Yes


11/21

H*ND F *8H

8-is searc- was do"e o" Decemer 9 2015 It was com!iled rom go'er"me"t data last released o"Decemer 31 201 8-e data were otai"ed rom t-e =# *$Bs Risk Mana+ement Systemdataase(M)

Midwest Ice Cream

The first major reason for the favorable operating income variance of $!"## is that there have been higher salesvolme than that forecasted% Essentiall&" higher sales volme has been responsible for the favorable operating

income variance% The actal net sales are $'""*##" +hereas" the bdgeted sales volme +as $'","*##% On the

other hand nfavorable variance de to operations have actall& decreased the favorable operating income variance

b& $,"###% -pecificall&" the major reason for the favorable operating income variance is the higher actal sales than

planned sales of prodct . and prodct E% The planned prodct sales of prodct . +as /#"### nits instead *"###

nits +ere sold and the planned sales of prodct E +as 0"### nits" instead /0"### nits +ere sold% The basis reason

for the favorable profit variance +as that Mid+est1s actal sales volme +as higher than forecast%

2nd also the second 3estion4 ho+ an anal&sis of the profit variance cold highlight those areas needing

management attention%%

The anal&sis of profit variance can sho+ can highlight those areas that need management attention% 5articlarl& in

case of Mid+est is that the variance de to operations +as nfavorable% This means that areas +here the costs have

been higher than the bdgeted costs re3ire corrective measres% 6f +e consider the manfactring cost" the variable

costs sho+ that mil7 price variance and sgar price variance have been responsible for nfavorable variable costs%-imilarl&" higher fixed costs of repairs" electricit& and +ater" and spoilage have been responsible for higher actal

fixed costs% 8rom the perspective of sales" the actal sales of 5rodct 2" 9" :" and 8 have been lo+er than planned

sales% Each of these areas needs management attention% The management needs to address those areas +here the

costs have been high and find ot reason +h& the sales of for prodcts have been lo+er than the planned sales%

The management +ill have to ta7e corrective action%

E;E:


12/21

nonBtechnical presentation to the board of directors% 6DT>O.


13/21

Ialgreens 2 -trategic 2nal&sis

Table of :ontents T29LE O8 :ODTEDT- ! T29LE O8 86GE- / THE >ET26L .>E 6D.? * 9=6EI 92:CG>OD .>E- 0 :>EDT O>G2D6K2T6OD %%%

to 2ppendix 2 The overall sales variance is $!!"## this nmber on its o+n can be

misleading that is +h& it is necessar& to brea7 it do+n into the specific areas% The sales

variance can be dissected into three areas4 indstr& volme" mar7et share and sales

mix% 6ndstr& =olme $!"!'8 Mar7et -hare $("/')< -ales Mix $"**'8 Total

$!!"##8 Do+ that the specific variances have been identified it is eas& to nderstand

+hat corrective action needs to

Ialgreens B 2 -trategic 2nal&sis

Table of :ontents T29LE O8 :ODTEDT- ! T29LE O8 86GE- / THE >ET26L .>E 6D.? * 9=6EI 92:CG>OD .>E- 0 :>EDT O>G2D6K2T6OD %%%

be ta7en% 8or example the mar7et share is $("/')ET26L .>E 6D.? * 9=6EI 92:CG>OD .>E- 0 :>EDT O>G2D6K2T6OD %%%

be bro7en do+n into $(0#"##)< de to price increase and $/!"##8 de favorable

sage variance% The $(0#"##)< price increase is most li7el& de to an nforeseen

environmental change +hich Mid+est probabl& has little control over% The detailed

manfactring variance anal&sis allo+s management the opportnit& to ma7e the

proper corrective actions for !',1s bdget% Operating B >efer to 2ppendix : The

operating variance can be fond b& sbtracting the flexible bdget income from the

actal income% 6n the case of

Organiational -7ills

ffIalgreens B 2 -trategic 2nal&sis Table of :ontents T29LE O8 :ODTEDT- ! T29LE O8 86GE- / THE >ET26L .>E

6D.? * 9=6EI 92:CG>O


14/21

Midwest a

:ase /,B, Mid+est 6ce :ream :ompan& (2)

N


15/21

SHUMAN AUTOMOBILES, INC.

RESPONSIBILIT ACCOUNTIN!

TRANS"ER PRICIN!

Su#mitte$ B%&

Ame, 'onna Mae B.

'ela Pena, Melissa S.

'ula$, ()une E.

Su#mitte$ to&

Si* (a% Ste+)en Si%

- Octo#e* -/

CASE -- 0 & SHUMAN AUTOMOBILES, INC.

Res+onsi#ilit% Accounting 1 T*ansfe* P*icing

"acts of t)e Case&

. Cla*2 S)uman, o3ne* an$ gene*al manage*, +lans to *eti*e an$ *elin4uis)e$ )is

cont*ol o5e* t)e com+an%

-. Business )as #een $oing goo$ 3it) an em+)asis of selling ne3 ca*s as t)e

+*inci+al #usiness of t)e $eale*s)i+

6. He c*eate$ t)*ee in$e+en$ent $e+a*tments, namel% ne3 ca* sales, use$ ca*

sales, an$ se*5ice $e+a*tment.

7. Sala*% is $e+en$ent on eac) $e+a*tment8s g*oss +*o9t

:. U+on t)e ta2e o5e* of t)e manage*ial +ositions, (anet Mo%e* of t)e ne3 ca* sales

)a$ a 9*st c)allenge of ma2ing a sale t)*oug) a costume* 3)o 3ante$ to t*a$e )is ol$

ca* 3it) a ne3 ca*.

/. Mo%e* )a$ to $eci$e t)e amount s)e 3oul$ o;e* t)e costume* fo* t)e t*a$e in

5alue of t)e ol$ ca*.

77.


16/21

List P*ice of Ne3 Ca*& >77

Cost of t)e Ne3 Ca*& --7

?. Paul "ie$le*, t)e use$ ca* manage*, estimate$ t)e *econ$itioning 3o*2 to cost

>=7, an$ t)e ca* coul$ #e *etaile$ at >/.

. Blue Boo2 +*ice *ange of #u%ing t)is mo$el of ca* in goo$ con$ition is f*om>:: @ >:=. "ie$le* estimate$ )e coul$ sell t)e t*a$ein ca* at an auction as is at

>:.

. If Mo%e* 3oul$ sell t)e ca* 3it)out t*a$e in, s)e 3ill )a5e to $e$uct a#out =

f*om t)e list +*ice, 3)ic) ma2es t)e sales to >6,-7=.

-. Nate Bianci is c)a*ging t)e use$ ca* $e+a*tment fo* >-,. Total cost of *e+ai*

amounte$ to ,:?7 an$ #ase$ on Blue #oo2, c)a*ges fo* t)is 2in$ of *e+ai* *anges f*om,?/ 0 -,7 an$ s)e )as al3a%s aime$ fo* t)e mi$$le of t)e BB *ange.

uestions&

. Su++ose t)e ne3ca* $eal is consummate$, 3it) t)e *e+ai*e$ use$ ca* #eing

*etaile$ fo* >,:?7. Assume t)at all sales +e*sonnela*e on sala*% Dno commissions an$ t)at gene*al o5e*)ea$ costs a*e 9Fe$. G)at is t)e

$eale*s)i+ inc*emental g*oss +*o9t on t)e total t*ansaction Di.e., ne3 an$ *e+ai*e$use$ca*s sol$0

ANSGER&

SHUMAN AUTOMOBILES, INC

Income Statement

Sales of ne3 ca*s >7,7

Cost of ne3 ca* sales >-,-7

Ne3 ca* g*oss +*o9t >-,/

Sales of use$ ca* >/,:

Se*5ice 3o*2 on *econ$itioning >,:?7

Use$ ca* g*oss +*o9t >D??7

'eale*s)i+ g*oss +*o9t >,//


17/21

-. Assume eac) $e+a*tment Dne3, use$, se*5ice is t*eate$ as a +*o9t cente*, as

$esc*i#e$ in t)e case. Also assume in a @ c t)at it is 2no3n 3it) ce*taint% #efo*e)an$

t)at t)e *e+ai*s 3ill cost >,:?7.

a. In %ou* o+inion, at 3)at 5alue s)oul$ t)is t*a$ein Dun*e+ai*e$ #e t*ansfe**e$

f*om t)e ne3ca* $e+a*tment to t)e use$ca* $e+a*tment0 G)%0

G)olesale afte* *econ$itioning : fo* t)e ca* as is at t)e auction.

0 Mo%e*8s consi$e*ations&

0 T)e ne3 ca* )a$ #een in stoc2 fo* some time an$ t)e mo$el 3as not selling 5e*%

3ell.

0 T*% to +e*sua$e t)e use$ca* manage* to ta2e o5e* t)e ca* an$ acce+t t)e use$ca* manage*8s a++*aisal +*ice

0 S)e )e*self coul$ sell t)e ca* t)*oug) 3)olesale c)annels o* at t)e auction.

0 Balance t)e nee$ to satisf% t)e custome* D3)o )a$ an inJate$ 5ie3 of t)e 3o*t)

of )is ol$ ca* an$ mo5e t)e ne3 ca*s out on in5ento*%.

0 No t*a$ein, s)e 3oul$ )a5e to $e$uct = f*om t)e list +*ice.

0 Nate Bianci8s c)a*ges in *e+ai*ing t)e ol$ ca* D$eal )as #een consummate$

T*ansfe* P*ice K Outla% Costs O++o*tunit% Costs

K DCost of *e+ai*s Cost of aFle *e+lacement O+C


18/21

K :?7 7/

T*ansfe* P*ice K -

0 "ie$le* faile$ to see t)e #*o2en aFle 3)ic) 3as not inclu$e$ on )is estimation

0 Mo%e* sol$ t)e ca* an%3a%, out of #oun$s of "ie$le*8s estimate an$ t)e Blue

Boo2.

0 T)ese t3o manage*s s)oul$ a#so*# t)e cost t)e% faile$ to consi$e* an$ t)e

se*5ice cente* c)a*ges s)oul$ not #e com+*omise$ #ecause of t)ese failu*es.

0 So as +e* t)e facts of t)e case, Bianci is c)a*ging t)e use$ ca* $e+a*tment -,

fo* t)e *e+ai*s of t)e ol$ ca* an$ 3e see it $eeme$ fai* enoug) #ecause it 3as #ase$ ont)e #lue #oo2.

G)olesale afte* *econ$itioning


19/21

Cost of ne3 ca* -,-7

T*a$ein 5alue of un*e+ai*e$ :, :,

Re5enue f*om sale of use$ ca*


20/21

7. 'o %ou feel t)e t)*ee+*o9tcente* a++*oac) is a++*o+*iate fo* S)uman0 If so,

eF+lain 3)%, inclu$ing an eF+lanation of )o3 t)is is #ette* t)an ot)e* s+eci9c

alte*nati5es. If not, +*o+ose a #ette* alte*nati5e an$ eF+lain 3)% it is #ette* t)an t)*ee

+*o9t cente*s an$ an% ot)e* alte*nati5es %ou )a5e consi$e*e$.

0 U+on consi$e*ations, t)e g*ou+ 5ie3s t)at t)e t)*ee+*o9t cente* must #e o+te$

*at)e* t)an t)e cent*alie$ fo*m of management. Liste$ #elo3 a*e some a$5antagesan$ $isa$5antages of $ecent*aliation&

A$5antages&

0 P*o5i$es manage*s 3it) t)e f*ee$om to ma2e local $ecisions.

0 It ma2es t)e in$i5i$ual $e+a*tments c*eati5e in coming u+ 3it) 3a%s to ma2e

+*o9t, es+eciall% 3it) inc*ease$ moti5ation $ue to t)e fact t)at M*. S)uman +lace$ t)ei*

*emune*ation #ase$ on $e+a*tmental g*oss +*o9t.

0 P*o5i$es incenti5es to $e+a*tment manage*s an$ in$i5i$uals to o+timie t)ei*in$i5i$ual +e*fo*mances.

0 Eac) $e+a*tment 3ill #ecome mo*e conse*5ati5e 3it) t)ei* cost management.

0 Su++o*ts management an$ in$i5i$ual s+ecialiation #ase$ on com+a*ati5e

a$5antage.

0 P*o5i$es to+ management 3it) mo*e time to ma2e +olic% $ecisions an$ engage

in st*ategic +lanning.

0 Bette* $ecisions can #e ma$e at t)e local le5el.

'isa$5antage&

0 Eac) $e+a*tment 3ill #e +*one to #e focuse$ on ma2ing +*o9t fo* t)ei* o3n

$e+a*tment, 3it)out *ega*$ fo* t)e ot)e* $e+a*tments, to t)e +oint t)at t)ei* $ecisions

mig)t not #e in cong*uence 3it) t)e o5e*all attainment of o*ganiational goal.

0 'ecent*aliation )as some c*e$i#ilit% at t)e $i5ision le5el, #ut a RA o*ganiation

c*eates conJicts #et3een segments, e.g., t*ansfe* +*icing +*o#lems, +u*c)asing

$e+a*tment #u%ing on t)e #asis of +*ice, +*o$uction $e+a*tments +us)ing $efecti5e

+*o$ucts $o3nst*eam to maFimie la#o* ecienc%

0 T)is causes com+etition #et3een segments an$ in$i5i$uals *at)e* t)an

coo+e*ation an$ team3o*2. P*e5ents goal cong*uence. C*eates slac2 an$ eFcess, e.g.,

in5ento*% #u;e*s, eFcess ca+acit%, +eo+le, an$ 5en$o*s.

0 Ten$s to igno*e man%, if not most inte*$e+en$encies 3it)in t)e s%stem. 'ecisions

a*e #ase$ on self inte*est *at)e* t)an t)e #est inte*est of t)e s%stem.


21/21

0 P*omotes *an2ing +eo+le 3)ic) igno*es statistical 5a*iation. Acco*$ing to 'eming,

t)is $est*o%s mo*al, int*insic moti5ation an$ team3o*2.

It ma% seem t)at t)e com+an% is )a5ing +*o#lems at t)e moment 3it) )o3 t)ese

t)*ee +*o9t cente*s coo*$inate 3it) eac) ot)e*. Ho3e5e*, t)is is t)ei* 9*st time to $o

t)is. !i5en enoug) time fo* t)e lea*ning cu*5e, it ma% #e assume$ t)at t)e com+an%

3ill #ecome mo*e +*o9ta#le 3it) eac) cente* gea*e$ to3a*$s gene*ating +*o9ts.A$o+ting a $ecent*alie$ fo*m of management ma% 3o*2 3ell if eac) $e+a*tment 3ill

still t)in2 of t)e 3elfa*e of t)e ot)e* $e+a*tments in t)e com+an%. 'ecent*aliation

s)oul$ not c*eate $i5ision #ut g*eate* coo+e*ation an$ team3o*2.

Anot)e* o+tion t)at t)e com+an% can ta2e is #% me*ging t)e useca* $e+a*tment

an$ t)e se*5ice $e+a*tment, ma2ing t)e latte* #ot) a cost cente* an$ a +*o9t cente*.

P*o5i$ing se*5ice inte*nall% 3it)out an% c)a*ge #ut 3ill still acce+t o# o*$e*s f*om t)e

outsi$e to cate* t)e maintenance se*5ice #ot) fo* t)e ne3 ca* custome*s an$ use$ ca*

#u%e*s. Besi$es, #ase$ on t)e statement of income of t)e se*5ice $e+a*tment )as not

#een ma2ing an% +*o9t an$ e5en incu**e$ loss of a#out >=,.

ice cream (jojo)

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