The Marble Copier Repair Person Problem
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages Description/Paper Instructions
Case
The Marble Copier Repairperson Problem: Investing In Human Capital
Abstract
Marble Corporation is experiencing declining repairperson productivity in the highly competitive copier industry. Marble turns to their internal training division to investigate a program to address this costly problem. This case introduces students to investing in employee training, an example of a so-called soft project, by applying capital budgeting techniques to justify a project. Additionally, agency conflicts are introduced at an introductory level to promote student discussion and insights.
Marble
The Marble Corporation, a manufacturer of office equipment, is headquartered in Connecticut. Marble stock (MBL) is traded on all major exchanges. The price of common stock has languished in the $7-9 range, for the past several years. Annual sales are $18 billion.
Dominic Clear established Marble in 1911 as a family owned business. The office equipment industry was intensely competitive, even in that era. The family guided the corporation successively through changes in technology and economic turmoil. In 1953, the family took Marble public, issuing common stock both as class A and class B. The class B stock provides sufficient voting rights for the Clear family to maintain control of the company. Mattie Clear-Murphy, the great granddaughter of the founder, serves as the current president.
Marble has been subject to intense domestic and international competition in recent years, especially in the Office Copier Division (OCD). In response to the competition, OCD has changed the models of the copiers more frequently. In the past, any of the copier models were expected to remain in the market for 5 to 7 years. In response to the competition, OCD is changing each model in their product line every 3 to 5 years. This competitive tactic has increased market share. However, there has been a decline in productivity of repairing machines that are in the field. The Repair and Maintenance Operations (RMO) unit provided a detailed report on declining repair productivity. Their findings state that the more frequent introduction of new copier models, to replace existing models, has created a lack of familiarity in repairing copiers. The RMO report indicates that learning-by-doing has declined and reduced labor efficiency. Statistical models of the learning curve indicate a 20% decline in productivity because of the frequent introduction of new models. The current labor costs for field repair and maintenance is $7,000,000 annually and is expected to stay at that level for several years.
Kenmore Atwell is charged with devising a solution to the OCD repairperson problem. Atwell has been employed at Marble for 28 years. He started in the accounting department and is currently the comptroller for the OCD. He expects to retire in the next several years. John Murphy is the treasurer of Marble and is married to Mattie Clear-Murphy. He has an MS degree in finance from a prestigious East coast university. He maintains a watchful eye on a variety of Atwell’s projects, reasoning that he may becoming either complacent or overly cautious regarding his decisions. Murphy recalls his finance education and learning about agency theory; his concern about Atwell is that he has accumulated a sizeable number of Class A stock over the years. Murphy assumes that Atwell might be overly prudent in selecting projects and is solely interested in not seeing fluctuations in the stock price from risky projects this close to his retirement.
Training Edge
The OCD problem was turned over to the Professional Training (PT) unit of Marble. PT has responded with a program proposal called the Training Edge. The proposal requires state-of-the-arts training for all field repair personnel. PT estimates that the Training Edge program will immediately restore the 20% loss of labor productivity. In other words, if you accept the project the loss of productivity goes away. Training Edge will require repair personnel to engage in five-day training programs annually to review the technical aspects of new copier models. The program will include virtual reality labs, physical repair labs, training videos, and manuals. A training center is also proposed at a site near corporate HQ, which is owned by Marble and managed my Marble Land. Marble leases the building commercially for $575,000 annually, however, the lease expires soon. The lease provides a five-year option to renew at $575,000 annually, but can be cancelled by either party. Marble can cancel the lease, which would provide an excellent training facility, though the current tenant would like to renew the lease. PT commissioned a study by Tonka Associates for $47,000.00 to consider retrofitting the building for training. The Tonka Associates study indicates that the lab space, classroom space, etc. will cost $900,000 to retrofit the building and PT estimates that the total costs will be $255,000 annually (table 1).
Table 1: Annual Operating Expenses
Operating Expense Annual Cost Videos $40,000 Training Manuals $20,000 Instructors $100,000 Instructional Material $5,000 Hotel/Travel $90,000 Total $255,000
The Financial Decision
OCD is delighted with the concept of Training Edge. They have asked PT to develop a financial justification for the program. OCD wants the proposal to cover only the next five years, since senior Marble management intends to sell the OCD at that time. The corporate tax rate is 35%. The training center building is fully depreciated. However, the retrofitting of the building is considered a capital improvement. It will be depreciated over the next three years on a straight-line depreciation basis. After “initial investments” today (retrofitting and so forth) all annual benefits and costs are assumed to occur at the end of the year, for each year over five years. Training Edge terminates at the end of five years and there are no salvage costs, etc., incurred at the end of the program. The required return for Marble is 16%.
Your Mission
You are to write a financial evaluation of the Training Edge program. Your proposal should not exceed three typed pages (single-spaced) plus supporting material in an appendix (if required). Financial justification (calculations) should be clearly expressed for a broad readership within the company and for presentation to the capital budgeting committee. Your financial arguments should be compelling and fully explained. You are encouraged to consider the validity of the concerns Murphy has about Atwell with regard to the decision you provide.
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Note: The textbook information regarding agency theory is sufficient to address this case.
RUBRIC
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. GET THIS PROJECT NOW BY CLICKING ON THIS LINK TO PLACE THE ORDER
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