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    Vershire Company: Brief About The Case

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    Nikku Singh
    Vershire Company is a large packaging manufacturer with a focus on aluminum cans. It is important for Vershire to tightly control its plants' budgets and performance to meet customers' expectations. Each plant is currently treated as a profit center rather than an expense center. The case discusses Vershire's budgetary control system where plant managers must perform monthly variance analyses and anticipate large variances daily. Divisional managers have control over their divisions except for capital and labor relations.

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    Vershire Company: Brief About The Case

    Uploaded by

    Nikku Singh
    39 views1 page
    Vershire Company is a large packaging manufacturer with a focus on aluminum cans. It is important for Vershire to tightly control its plants' budgets and performance to meet customers' expectations. Each plant is currently treated as a profit center rather than an expense center. The case discusses Vershire's budgetary control system where plant managers must perform monthly variance analyses and anticipate large variances daily. Divisional managers have control over their divisions except for capital and labor relations.

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    Group B3_Assignment 3

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    Vershire Company is a large packaging manufacturer with a focus on aluminum cans. It is important for Vershire to tightly control its plants' budgets and performance to meet customers' expectations. Each plant is currently treated as a profit center rather than an expense center. The case discusses Vershire's budgetary control system where plant managers must perform monthly variance analyses and anticipate large variances daily. Divisional managers have control over their divisions except for capital and labor relations.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    39 views1 page

    Vershire Company: Brief About The Case

    Uploaded by

    Nikku Singh
    Vershire Company is a large packaging manufacturer with a focus on aluminum cans. It is important for Vershire to tightly control its plants' budgets and performance to meet customers' expectations. Each plant is currently treated as a profit center rather than an expense center. The case discusses Vershire's budgetary control system where plant managers must perform monthly variance analyses and anticipate large variances daily. Divisional managers have control over their divisions except for capital and labor relations.

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    Vershire Company

    Brief about the case:


    Vershire Company is a large business in the packaging industry with several major divisions.
    The focus is on the aluminium can division and its control systems including the budgeting
    process and performance measurement. This division is one of the largest manufacturers of
    aluminium beverages cans in the United States. However, if customers’ expectations for cost,
    quality, and service are not met, they can easily purchase from another manufacturer.
    Therefore, it is important for Vershire to keep tight control over their plants, budgets, and
    performance in terms of efficiency and effectiveness.

    Central point of the case:


    The major concern currently facing Vershire Company is that each plant within the division is
    being treated as a profit centre, rather than an engineered expense centre. Also, the plant
    managers were not supposed to wait until the monthly statements were prepared. Corporate
    management reviewed the variances for those items where figures exceeded budgetary
    amounts.

    Control Systems discussed in the case:


    There is budgetary control system in the case. The budget is in terms of sales, manufacturing.
    Finally, there is constant oversight on meeting the budget, as plant managers are required to
    perform a variance analysis explaining differences each month and are expected to anticipate
    large variances daily. The other control system is incentive for performance. Divisional
    managers are given full control over their divisions except in the areas of raising capital and
    labour relations. Secondly, there is timely communication between the various hierarchies of
    the company as there are not that many tiers - plant managers report to the divisional
    managers who then report to the corporate office.

    Learnings from the case:


    • Divisional managers are required to predict market conditions and capital expenditures
    five years in advance and prepare a forecast for the subsequent two years.
    • Leaving labour relations and capital to the corporate head office allows the company to
    enjoy the benefits of operating as a large organization and economies of scale, such as the
    ability to obtain preferred interest rates from financial institutions.
    • Profit shouldn´t be the main factor when evaluating plant managers. Even if sales fall
    below the budgeted levels, it is still the plant manager’s responsibility to achieve the
    budgeted profit levels.

    Submitted by Group B3
    (Prashant, Manohar, Rinshad)

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