Project #18288 - creative problem solving

Retro Repro Furniture Ltd. is a small, but rather exclusive, producer of reproduction bedroom furniture and is based in the north of England.


Turnover last year was just over £1 million and the business continues to provide a steady profit margin. It is a private limited company owned by Joseph Carpenter and his wife Sarah, and has been trading for 25 years. Joseph, who is a fully qualified cabinet maker, started in the trade immediately after leaving school. He has little formal training in management, but has much hands-on experience gained from running his business.


The company originally operated from small, cold and draughty premises in the back streets of

Manchester. The business grew steadily in the early years and about ten years ago Joseph was able to move from the original site to a location in Manchester, which provides a small showroom area, a workshop, staff room and storage. However, the product range has remained fairly constant and consists of three pieces of bedroom furniture, namely, a wardrobe, a chest of drawers and a dressing table. These are sold directly to customers either as separate items or as a bedroom suite.


The furniture is hand-made to a very high standard, authentically reproducing the Baxendale style which was popular in the late nineteenth century. This requires a high degree of skill in the construction and finishing stages of the production process. Although most of Joseph’s time these

days is spent in managing the business, he still keeps a watchful eye on activities and likes to help out if the men are over-stretched.


The furniture is made from mahogany supplied by Manchester Timber Company, which imports

high-quality, seasoned timber from South America. Although Joseph could buy mahogany more

cheaply elsewhere, he has dealt with this company for a long time and has confidence that the

quality will be consistently good. The grain and colour of the wood is extremely important and,

because the fronts of the furniture must match in grain and colour for each piece or suite of

furniture, the company expects to have a high level of off-cuts and waste.

The unique finish to the furniture is produced through a highly-skilled hand-waxing process,

using beeswax mixed to a special recipe created especially for Retro Repro Furniture by Charlesworth Specialist Waxes, who make and supply this recipe exclusively to the company. Mahogany and beeswax are the two main materials used to make the finished products.


Twelve people are now employed full time in the production process: ten are highly skilled

cabinet makers and two are young apprentices. All of the cabinet makers have been with the

company for a long time and Fred is now the workshop supervisor. Fred is a bit set in his ways

but, according to Joseph, ‘He does a damned good job and he is a very good craftsman.’


Careful delivery of the furniture to the customer is very important and Joseph is proud of the fact

that the company receives very few complaints of furniture damaged in transit.


The company sub-contracts this part of its activities to a well- established company in the city of Manchester. This company has always been reliable and has provided a high class service to customers carefully protecting the furniture in transit, setting the piece in its position for the customer and asking them to check it over. If the customer is not satisfied with the furniture, then it is returned to the workshop immediately. Of course, Retro Repro pay a premium price for this service, but it has proved of benefit to both the company and the customer, since problems can be resolved immediately.


The specialised nature of the production process and the specialised delivery service results in

high product costs. However, Joseph has found that the company’s products attract the type of

customer who is willing to pay a premium price.


In the past year, the company has invested £100 000 in the refurbishment of the offices and

showroom and in the extension of the workshop and storage area to meet increasing demand

for the company’s products. This was funded by a five year loan from the company’s bank.


Joseph believes that the increase in demand is mainly due to the showing of a television documentary

of Manchester which featured Retro Repro. The company appeared in a very favourable light as part of the new face of Manchester emerging from the aftermath of the shrinking textile industry and the programme was given prime-time national coverage. In order to capitalise upon this free publicity, Joseph also launched a national advertising campaign, using the documentary as a marketing ploy. However, the increased demand is putting pressure on the workforce and the lead time (the time between the customer ordering the furniture and the expected delivery date) is increasing.


Iris has been responsible for the paperwork ever since Joseph started the business. Initially she

worked part- time whilst her children were young but has worked full time for the last five years.

She has had the help of Brian, who is a qualified accountant, for the last twelve months. Brian

spends two days each month on the company premises, assisting with costings and accounts.

Although, according to Joseph, ‘Iris has always done a great job of sorting us out’, Joseph feels that

the company is getting too busy for her to cope. He has asked Brian’s advice and Brian has

suggested that it is probably time to employ a full time management accountant, even though

this will mean a reduction in his own services for the company.

Two months ago


Joseph took Brian’s advice and contacted Manchester University to advertise the post on the

undergraduate careers board. He felt that the post would suit a new graduate and that he could

offer a fair salary whilst not placing too large a burden on the company’s overheads. A number

of students expressed an interest and Joseph interviewed three of these. He selected Mary, who is

due to start with the company as soon as her final exams are successfully completed.


Last week


Mary arrived at Retro Repro and settled in nicely. Wisely, Joseph involved Iris in the selection process and the two seem to be getting on well together.


Joseph received a profit statement from Brian for the previous six months’ trading which itemised

the performance of the company’s three products. This is attached as Extract 1. Joseph was

appalled to see that the dressing tables had made a loss!


He has called a meeting for next week with Mary, Iris and Fred to discuss the situation. It could not be before then, as Joseph had important appointments for the rest of the week. Firstly, he had to visit the beeswax suppliers who are located in the Scottish Highlands, in order to renegotiate a contract for beeswax for the coming year; secondly, Manchester Timber had telephoned and asked for an urgent meeting.


Joseph warned Mary, Iris and Fred that at next week’s meeting he also wishes to discuss another

matter with them.


This concerns a potential new venture for the company. Much to his amazement, knowledge of the company has reached the Canadian market through the screening of the television programme. One particular company has approached Joseph with an enquiry for 50 chests for export to America. Retro Repro has never supplied bulk orders before and this customer is only willing to pay 70 % of the normal selling price.


He has briefly discussed the problems with Mary who, being keen and enthusiastic in her first

job, wishes to anticipate Joseph’s information needs before the meeting takes place. She has

been working overtime (after Iris has left for the day) to produce the information which is

attached in Extract 2. She hopes to impress Joseph at the meeting by being well prepared, but has

only managed to obtain the raw data by the date of the meeting.






Brian’s Profit Statement for the last six months’ trading






Dressing Tables









Sales revenue





Direct materials





Direct labour





Variable workshop overheads





Apportioned fixed workshop overheads





Total manufacturing costs





Gross profit (loss)





Selling & distribution costs





Net profit








Mary’s Initial Information Gathering


Profit statement:


Numbers of each product sold in the period covered by the statement:




Wardrobes                    200

Dressing tables                         160

Chests of drawers         200


Selling and distribution costs includes delivery costs to the customer

Amount paid to delivery contractor for last six months                              £19,600

Average delivery cost per product                                                             £35 each


Dressing tables:


Six months ago Joseph made the decision to buy in the mirror section of the dressing tables from a

local firm at a cost of £200 each. Mary has found the original estimate of the cost if the company

were to continue making the mirror section in house, which was used for comparison with the

sub-contract price. This is shown below:



Direct materials              120

Direct labour                   40

Variable overheads           20

Fixed overheads             40

Total                              220



In order to ensure that the timber used to frame the mirror section matched the main body of the

dressing table, it was agreed that the supplying firm would buy their timber from the same

supplier, i.e. Manchester Timber Company. The mirror sections were delivered to Retro Reproductions in an unfinished state and were hand-waxed by the company’s own craftsmen. Control over the quality of the mirror sections has been problematic.



The Canadian Enquiry


Mary has obtained the following information:

Delivery charges

(50 chests to the dockside)                                3 vans @ £300 each


Average lead time:

for the last six months                                        12 weeks

for the six months prior to that                             8 weeks


Average overtime:

last week                                                          6 hours per man

for the last six months                                        1 hour per man per week



Stocks of mahogany                                        3250 square metres

Average usage of mahogany per product:

Wardrobes                                                         10 square metres

Dressing tables (excluding mirror)                        4 square metres

Mirror section                                                      1 square metre

Chests of drawers                                               5 square metres


The meeting

It is obvious to everyone (except Mary) that Joseph is worried. Mary is puzzled but she dares not to comment.


The first item on the agenda is the loss-making situation of the dressing tables. Joseph comments,


‘I am appalled to find that the dressing tables are making a loss of £30 000. I can’t understand it

as it has never happened before. It looks as though we shall have to stop making them and

concentrate on the other products, unless any of you can offer an alternative solution’.


Iris says that, given Brian’s figures, she has to agree with Joseph about the dressing tables. Fred

comments that he hasn’t had time to look at the figures as he has been ‘snowed under’ with

work. Mary decides to keep her data to herself at this stage and offers to go away and ‘work on

some numbers’.


The second item is the potential new venture. Joseph passes copies of the Canadian enquiry to all

those present. ‘I intimated to you all last week that we might discuss this today. Do you have any

views on whether we should accept it or not?’


Iris and Fred have discussed this item before the meeting. Fred tells Joseph that the order is totally

impossible, given that the workshop is getting very overstretched, and Iris agrees with him,

adding, ‘How on earth do they expect us to make a profit at only 70 per cent of the normal selling

price?’ Mary interrupts at this stage, having gained a little more confidence, and suggests to

Joseph that the enquiry might be worth looking into.


She promises to provide further information by the end of the week. Joseph decides that they should meet again on Friday, when Mary will have more information for them and hopefully Fred will have had time to give the issues greater consideration.
















SECTION A ( Total 60%)


PART 1 (60%)


Mary has decided to restate Brian’s original profit statement by using the additional information she has collected and by employing a marginal costing approach, clearly identifying both the contribution made by each product over the last six months and the overall profit.


1.     What decision should be made regarding the first item on the agenda, the dressing tables?  

2.     What decision should now  be made regarding the mirror section

3.     What is the optimal production schedule for the stocks of mahogany?

4.     What decision should Retro Repro make regarding the Canadian enquiry?


Support your decisions by showing your calculations and outlining other factors that may be relevant.




Emmanuel et al (1990) distinguish between programmed  and non-programmed decisions . In this paper, a programmed decision is  defined as “one where the decision situation is sufficiently well understood for a reliable  prediction  of the decision outcome to be made”.  Discuss and evaluate the above decisions in the context of this analysis. 




 Additional Information

Write your answer as a Business report to Retro Repro from Mary, combining all elements of the above. Word limit 2,000 words, excluding calculations and appendices.

 Marking criteria-see attached grid.







Total Mark Awarded:



UG  Standard Assessment & Grading Criteria for HBS Coursework -

Module Code:_______6BUS1084__        Lecturer Mary Taylor_____________________________          Student:



Presentation & structure

Use & presentation of Harvard Referencing


Business Application & Integration of Data/Literature

Academic essay

Task details



Follows report structure & keeps to word limit of 2000 words, excluding appendices.

 Complete report integrated(both parts)  with  executive summary

Follows Harvard style for in-text citation & Reference List

Use a minimum of 4 sources 

Part ONE(decisions based on calculations and factors)


 Integration & application of information

Students are expected to apply theory to a practical scenario

Line of argument, development of discussion of programmed/non- programmed decisions- interpretation of decisions and


                10 marks

             5 marks

           45 mark

20 marks

             20 marks




Outstanding...  Presentation & report structure, with numbered paragraphs, list of contents/figures &appendices.

Articulate & fluent academic writing style with ideas cross referenced. No grammatical / spelling errors.

Outstanding... Standard of referencing within text & consistent use of Harvard referencing system.

Accuracy of in-text references & full details shown in Reference list.





Outstanding... Business insight & application.

Breadth, depth & integration of literature/data into work.


Outstanding...  Level of discussion/analysis/ critical evaluation &/or reflection.

Highly developed/ focused work.




Excellent ... Presentation & report structure, with numbered paragraphs, list of contents/figures, appendices & cross referencing.

Articulate & fluent academic writing style. Only a minor error.

Excellent... Standard of referencing within text & consistent use of Harvard referencing system.

Accuracy of in-text references & full details shown in Reference list.



Covers all relevant points & issues.

Excellent ... Business insight & application.

Breadth, depth & integration of literature/data into work.


Excellent...  Level of discussion/analysis/ critical evaluation &/or reflection clearly developing points in the appropriate way with thorough consideration of all possibilities.




Very Good

Very good...  Presentation & report structure, paragraphing, use of numbering, list of contents/figures, appendices & cross referencing.

Fluent academic writing style.

Very few grammatical errors & spelling mistakes.

Very good...  Standard of referencing within text & consistent use of Harvard referencing system.

Accuracy of in-text references & full details shown in Reference list.

Very good

Few errors / omissions in content/calculations.

Very good...  Business insight & application.

Breadth, depth & integration of literature/data into work.


Very good...  Level of discussion/analysis/ critical evaluation &/or reflection & a few ideas/points could benefit from further development &/or evaluation/comparison.




Good...  Clear presentation & report structure, use of numbering & appendices.

Writing is mainly clear but some spelling &/ or grammatical errors.

Good...  Standard of referencing within text & consistent use of Harvard referencing system.

Accuracy of in-text references & full details shown in Reference list.

Good... Grasp of the topic & some of its implications presented.

Knowledge & understanding is demonstrated.

Minor errors / omissions in content/ calculations.

Good... Business insight & application.

Breadth, depth & integration of literature/data into work.

Good... Level of discussion/analysis/ critical evaluation &/or reflection but more ideas/points could be addressed /developed further.




Satisfactory... Basic report structure.

Not always written clearly & has grammatical & / or spelling errors.

Satisfactory... Basic referencing within text & consistent use of Harvard referencing system.

Accuracy of in-text references & full details shown in Reference list.

Satisfactory... Content / level of knowledge of the topic.  Addresses part of the task. Some errors / omissions in content/ calculations. May benefit from further research.

Satisfactory... Business insight & application. Limited integration with literature/ data. 

Use of literature/data but limited in breadth OR depth.

Satisfactory... Basic evidence of discussion/analysis/ critical evaluation &/or reflection but some points superficially made so need further development.



Marginal Fail

Weak... Report format, limited or poor structure.

Muddled work with many spelling & / or grammatical errors.

Weak...Use of Harvard referencing system with errors & inconsistently applied. Limited referencing within the text.Limited accuracy of in-text references compared to those in the final Reference list.

Weak... Limited content / knowledge/ calculations. Limited or muddled understanding of the topic/question.

Does not meet all the learning outcomes.

Weak... Unsatisfactory evidence of business application & insight

Work needs to show better links between practical application and theory.


Weak... Limited evidence of discussion/analysis/ critical evaluation &/or reflection.

More development & comment needed. May need to do more than describe.

20 – 29


Clear Fail

Inadequate... Report format and poor paragraphing / signposting.

Inappropriate writing style

Poorly written &/or poor spelling & grammar.        Must see ASU

Inadequate...  Use of Harvard referencing with many errors &/or inconsistencies.


Must see ASU

Inadequate... Lacking in relevant content/ knowledge/calculations. Content irrelevant / inaccurate. Does not meet all the learning outcomes.

Inadequate... Lacks evidence of business application & insight. Some literature irrelevant to topic.

Inadequate... Lacking / inadequate level of discussion/ analysis/critical evaluation & /or reflection. Descriptive.

Must see ASU

1 – 19


Little or Nothing of merit

Nothing of merit...  Poorly written work, lacking structure, paragraphing / signposting.

Many inaccuracies in spelling & grammar.          Must see ASU

Nothing of merit... No or little attempt to use the recommended Harvard referencing system.


   Must see ASU

Nothing of merit...  Unsatisfactory level of knowledge demonstrated.

Content used irrelevant / not appropriate/ to the topic. Does not meet the learning outcomes.

Nothing of merit...  No evidence of appropriate business application & insight.


Nothing of merit...  Unsatisfactory level of discussion/analysis/critical evaluation &/or reflection


Must see ASU


READINGS PLUS the ones we have read in class.-

especially Matthew Hall and Earl


Readings in accounting for management control

CR Emmanuel, DT Otley, KA Merchant - 1992 - Chapman & Hall

Library Search

[PDF] from [PDF]

The role of management control systems in creating competitive advantage: new perspectives

R Simons - Accounting, organizations and society, 1990 - Elsevier

Resources @ UHLibrary Search

[PDF] from [PDF]

A framework for management information systems

GA Gorry, MSS Morton - 1971 -

... Original plans for operational control sys- tems were met with more or less difficulty ... In The New Science of Management Decision, Simon is concerned with the manner in ... His distinction between "programmed" and "nonprogrammed" de- cisions is a useful one: Decisions are ...


Management control systems and strategy: a critical review

K Langfield-Smith - Accounting, organizations and society, 1997 - Elsevier

... high resource sharing relied on behavior controls (the continual monitoring of decisions and actions ... Simons (1991) refined his theory and identified five different types of control systems which managers may choose to use inte

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