Clotheshound is a local clothing store in New England.Clotheshound has been experiencing increased competition from the national clothing chains.In an effort to improve performance,management intends to create a Balanced Scorecard.In a meeting,several measures were suggested by various managers.
Management has identified a key problem.Customers are taking too long to pay their department store's charge card bills,and the company has an abnormal amount of bad debts.If this problem were solved,the company would have far more cash to invest in store improvements.Investigation has revealed that much of the problem with late payments and unpaid bills is apparently due to disputes about incorrect charges on the customer bills.Incorrect charges usually occur because sales clerks enter data incorrectly on the charge account slip.
The performance measures suggested by the managers are given below:
Total sales revenue
Sales per square foot of floor space
Sales to inventory ratio
Sales per employee
Sales to total assets
Customer satisfaction with accuracy of charge account bills from monthly customer survey
Customer wait time for service
Travel expenses for buyers' trips
Average age of accounts receivable
Courtesy shown by junior staff members based on surveys of senior staff
Unsold inventory at the end of the season as a percentage of total cost of sales
Percentage of suppliers malcing just-in-time deliveries
Quality of food in the staff cafeteria based on staff surveys
Written-off accounts receivable as a percentage of sales
Percentage of charge account bills containing errors
Percentage of employees who have attended the city's cultural diversity workshop
Total profit
Profit per employee
Percentage of salesclerks trained to correctly enter data on charge account slips Required:
a.Build an integrated Balanced Scorecard using only performance measures suggested by the managers.You do not have to use all the measures,but build a Balanced Scorecard that reveals a strategy for dealing with the problems with accounts receivable and unsold merchandise.
b.Construct a testable strategy by showing the causal links (with arrows)between measures in the different perspectives,and show whether the performance measure should show an increase or decrease.
c.Assume that the company adopts the Balanced Scorecard.After operating for a year,there are improvements in some performance measures but not in others.What should management do next?

Question

Clotheshound is a local clothing store in New England.Clotheshound has been experiencing increased competition from the national clothing chains.In an effort to improve performance,management intends to create a Balanced Scorecard.In a meeting,several measures were suggested by various managers.
Management has identified a key problem.Customers are taking too long to pay their department store's charge card bills,and the company has an abnormal amount of bad debts.If this problem were solved,the company would have far more cash to invest in store improvements.Investigation has revealed that much of the problem with late payments and unpaid bills is apparently due to disputes about incorrect charges on the customer bills.Incorrect charges usually occur because sales clerks enter data incorrectly on the charge account slip.
The performance measures suggested by the managers are given below:
 Total sales revenue
Sales per square foot of floor space
Sales to inventory ratio
Sales per employee
Sales to total assets
Customer satisfaction with accuracy of charge account bills from monthly customer survey
Customer wait time for service
Travel expenses for buyers' trips
Average age of accounts receivable
Courtesy shown by junior staff members based on surveys of senior staff
Unsold inventory at the end of the season as a percentage of total cost of sales
Percentage of suppliers malcing just-in-time deliveries
Quality of food in the staff cafeteria based on staff surveys
Written-off accounts receivable as a percentage of sales
Percentage of charge account bills containing errors
Percentage of employees who have attended the city's cultural diversity workshop
Total profit
Profit per employee
Percentage of salesclerks trained to correctly enter data on charge account slips Required: 
a.Build an integrated Balanced Scorecard using only performance measures suggested by the managers.You do not have to use all the measures,but build a Balanced Scorecard that reveals a strategy for dealing with the problems with accounts receivable and unsold merchandise.
b.Construct a testable strategy by showing the causal links (with arrows)between measures in the different perspectives,and show whether the performance measure should show an increase or decrease.
c.Assume that the company adopts the Balanced Scorecard.After operating for a year,there are improvements in some performance measures but not in others.What should management do next?

Quizplus · Accepted Answer

The Answer of Clotheshound is a local clothing store in New England.Clotheshound has been experiencing increased competition from the national clothing chains.In an effort to improve performance,management intends to create a Balanced Scorecard.In a meeting,several measures were suggested by various managers.
Management has identified a key problem.Customers are taking too long to pay their department store's charge card bills,and the company has an abnormal amount of bad debts.If this problem were solved,the company would have far more cash to invest in store improvements.Investigation has revealed that much of the problem with late payments and unpaid bills is apparently due to disputes about incorrect charges on the customer bills.Incorrect charges usually occur because sales clerks enter data incorrectly on the charge account slip.
The performance measures suggested by the managers are given below:
 Total sales revenue
Sales per square foot of floor space
Sales to inventory ratio
Sales per employee
Sales to total assets
Customer satisfaction with accuracy of charge account bills from monthly customer survey
Customer wait time for service
Travel expenses for buyers' trips
Average age of accounts receivable
Courtesy shown by junior staff members based on surveys of senior staff
Unsold inventory at the end of the season as a percentage of total cost of sales
Percentage of suppliers malcing just-in-time deliveries
Quality of food in the staff cafeteria based on staff surveys
Written-off accounts receivable as a percentage of sales
Percentage of charge account bills containing errors
Percentage of employees who have attended the city's cultural diversity workshop
Total profit
Profit per employee
Percentage of salesclerks trained to correctly enter data on charge account slips Required: 
a.Build an integrated Balanced Scorecard using only performance measures suggested by the managers.You do not have to use all the measures,but build a Balanced Scorecard that reveals a strategy for dealing with the problems with accounts receivable and unsold merchandise.
b.Construct a testable strategy by showing the causal links (with arrows)between measures in the different perspectives,and show whether the performance measure should show an increase or decrease.
c.Assume that the company adopts the Balanced Scorecard.After operating for a year,there are improvements in some performance measures but not in others.What should management do next?

Clotheshound Is a Local Clothing Store in New England