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Case Study example - The Oriole Furniture Inc. ( )

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The Oriole Furniture Inc. (Case Study) Case Study example
Undergraduate
Case Study
Finance & Accounting
Pages 4 (1004 words)
Oriole Furniture, Inc is a thirty year old distributor of high quality imported furniture. It has four divisions categorized as teakwood, antiques, rosewood, and rattan supported by four centralized staff departments such as finance & control, marketing, purchasing and engineering…

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The sales and production activities of all the three lines are managed by Mr. Mente. Each division’s vice president prepares an annual profit plan, in which the result of estimation for the year has been a profit of $22.7m and the sales volume is $77m. Mr. Menson, the company’s president, has not been satisfied with the submitted profit plan. He wants a profit of $23.9m on a sales volume of $81m. When the actual performance of the division is compared with the budget, Mr. Mente finds that sales remain at 11% below plan and profit is 18% below plan. The challenge before the company is that the division failed to meet the budgeted requirement during the year, and the company may consider action in midyear to ensure it reaches its budget by year-end. What does Mr. Mente need to do? What is he proposing to do about his situation? Mr. Mente should revise the plan to reach up to the new sales budget. He should try to figure out the reason for the difference in actual performance with the budgeted performance through a complete analysis of the situation. The reasons he will explain to his top manager for not attaining the expected performance are the tough economic situation and old machineries besides the difficulty in finding good furniture designers. ...
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