Project #61203 - case study 1


To prepare for this case study, please read the Institute of Management Accountants’ - “Pelarsen Windows: Humans v. Robots.” 




An effective company will perform projects to capitalize on opportunities or resolve issues.  These projects represent organizational change that must be managed to be on time and budget, deliver the promised quality, and maintain organizational support.  Project managers and change leaders can have roles in the discovery of potential projects.  This involvement can be valuable because the project manager will have better appreciation for the project goals and more input into the project structure and plans.  Change leaders can see the potential impact of the changes these projects will create.  This allows for early work to build support for those changes and to navigate around change barriers.


Pelarsen Windows is a company that has an apparent issue.  Its Texas plant produced a loss of $6.34 million in the most recent year of operations.  This type of loss cannot be sustained.  The organization faces some hard decisions including the potential of closing the Texas plant.  Before this happens, Ingred Pelarsen, CEO, is willing to evaluate potential improvement projects to turnaround the Texas plant’s operations.


Your role as part of the company’s leadership is to help the organization assess potential improvement areas based on the information provided.  The tools that will be used include:


  • Financial ratio analysis – use the various ratios learned in Accounting – What the Numbers Mean including profitability ratios, liquidity ratios, solvency ratios, and activity ratios.
  • Benchmark analysis – use industry benchmarks, typically in conjunction with financial ratios, to compare performance and see opportunities for improvement.
  • Throughput analysis – use the capacity that machines can handle to determine bottlenecks and opportunities for more efficiency.
  • Other analysis – use any other financial or non-financial analysis to determine opportunities for improvement or to resolve issues.




After reviewing the Pelarsen Windows case, complete the following instructions:


Part 1:  Financial Analysis


Complete the following calculations and assessments of current operations and place them in the designated Excel sheet:


Excel Sheet 1:


  1. Calculate the current Texas activity ratios for receivables, inventories and payables. 
  2. Compare the activity ratios for the Texas plant to the industry benchmarks.
  3. Determine any opportunities for improvement based on the activity ratio analysis.


Excel Sheet 2:


  1. Calculate a common-sized income statement for the Texas plant for standard windows and architectural windows.
  2. Compare the common-sized income statement for the Texas plant to the industry benchmarks.
  3. Determine any opportunities for improvement based on the common-sized income statement.


Excel Sheet 3:


  1. Calculate the throughput for the Texas plant for standard windows and architectural windows.
  2. Evaluate any bottleneck issues that exist within the Texas plant.


In addition to the directed analysis, review the other case data and determine any additional opportunities for improvement.  The following items are hints to where opportunities may be found.  Always consider the difference between standard and architectural windows.  Place the items in the designated Excel sheet.


Excel Sheet 4:


  1. Review opportunities regarding product rework or inefficiencies.


Excel Sheet 5:


  1. Review opportunities regarding the blend of skilled and unskilled labor.


Excel Sheet 6:


  1. Review opportunities regarding the allocation of costs between standard and architectural windows.


Excel Sheet 7:


  1. Review opportunities comparing the standard costs for production versus actual costs for production.


Part 2:  Change Assessment


Review the results of the Part 1:  Financial Analysis and complete the following activities and place them in the designated Excel sheet:


Excel Sheet 8:


  1. List each analysis area and list the job titles that would be impacted by changes to each of those areas.  It is expected that the students will develop descriptive job titles.
  2. Describe how the potential employees would be affected by any changes to the analysis areas.


Part 3:  Summary Proposal


Once both analyses are done, prepare a simple one-page business memo to summarize the findings from the various analyses performed, the employees impacted, and the potential effects of the changes.




Subject Business
Due By (Pacific Time) 03/13/2015 12:00 am
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