In 2009 it was decided that ABC Tire Company would implement a BPM project with
ID: 1092567 • Letter: I
Question
In 2009 it was decided that ABC Tire Company would implement a BPM project with the
following goals:
? Decrease the labor cost per tire and
? Increase profit from each tire sold by 5%.
To track the success (or failure) of the project they determined the following baseline data
for 2009.
Total #
of Tires
Sold
Materials
Cost Per
Tire
Labor
Cost Per
Tire
Average
Retail Price
Per Tire
Average
Profit Per
Tire
22,594 $21.23 $12.67 $119.00 $85.10
After implementing the BPM project ABC Tire Company reviewed the value of the project
after a year and identified the following information:
Total # of
Tires Sold
Total Materials
Cost
Total Labor
Cost
Average Retail
Price Per Tire
27,669 $533,450.00 $397,555.00 $122.13
Using the data provided above calculate and fill in the following table (show all your work;
completing the table without the calculations will result in no credit):
Materials
Cost Per
Tire
Labor
Cost
Per
Tire
Average
Profit
Per Tire
%
Increase
or
Decrease
in
Materials
cost Per
Tire
%
Increase
or
Decrease
in Labor
cost Per
Tire
%
Increase
or
Decrease
in
Average
Profit Per
Tire Unit 8 [MT400: Business Process Management]
After the table is complete, address the following questions::
1. Why is it important to ensure that the baseline data is accurate?
2. Was the project successful? Why or why not?
Explanation / Answer
1)Materials Cost Per Tire = 672,080.32/27,669 =$24.29 2)Labor Cost Per Tire = 303,280.56/27,669 = $10.96 3)Average Profit Per Tire = 121.13 -24.29-10.96 =$ 85.88 4)% "increase" in Materials cost Per Tire = [(24.29-23.21)/23.21]x100 = 4.653% increase 5)% " Decrease" in Labor cost Per Tire = [(11.67- 10.96)/11.67]x100 = 6.0839% decrease 6)% Increase in Average Profit Per Tire = [(85.88 - 84.12)/84.12]x100 = 2.09% increase Why is it important to ensure baseline data is accurate? because baseline data may be used later to provide a comparison forassessing program outcomes or impacts it is important yes the program is a success since they managed 2.09% increase in profit
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.