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2 SBL Mock 1(b) Question
Strategic Business Leadership (SBL)
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ACCA MOCK 1(b) – COLOSSAL ENGINEERING
Strategic Business
Leader (SBL)
Pre-seen material
You should read the pre-seen information relating to this Mock Exam (in a separate document), and attempt Mock Exam 1(a), BEFORE opening this paper.
Time allowed
Writing time: 1 hour 5 minutes including reading time
All questions are compulsory and MUST be attempted
Do NOT open this paper until instructed by the supervisor.
This question paper must not be removed from the examination hall.
Kaplan Publishing/Kaplan Financial
ACCA – SBL
SB L : S T R A TE G I C B U SIN E SS LE A DE R
2 KA PL AN P U BLI SH IN G
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EXHIBIT 1
Notes relating to the proposed investment in Integrated Manufacturing technologies (provided by the Operations Director of Winter)
OVERVIEW
As noted in the Project Initiation Document (PID 23/20X3), this proposal is for the purchase, installation and commissioning of an Integrated Manufacturing Facility (IMF) in the main Fairport factory. This facility will replace a number of existing manufacturing machines (about half of the factory area), many of which are book-life-expired (though still in use).
NEEDS ANALYSIS
Maintenance costs on the machines being replaced by the IMF have increased to intolerable levels. The savings in maintenance costs, alone, will more than cover the additional interest costs on the borrowing required for this investment.
Winter is increasingly being asked to produce large batches of identical products. The introduction of IMF will allow Winter to exploit economies of scale, reduced set-up costs (when amortised across the batch quantity) and reduction of work-in-process inventories. This will allow Winter to achieve a cost leadership position, and thus win more orders.
SUPPLIERS
The manufacturing machinery for the IMF will be purchased from Farland Factory Systems (FFS). Winter has previously used FFS, as its preferred machinery supplier, and enjoys a good relationship. FFS will, in turn, source machines from a range of domestic and foreign suppliers, and develop the software to control the IMF.
SCALE OF INVESTMENT
The original plan for funding this investment was to issue redeemable bonds. Following the acquisition of Winter, by Colossal, we will need to approach our new Parent for funding. Although the investment falls within the authority level delegated to The Board of Winter, funds are currently not available. This project will therefore require approval by the Investment Committee of Colossal.
TIMESCALE
We are assured, by FFS, that the IMF can be installed and commissioned during the annual winter factory closedown. This will mean that normal production will not be affected, as we can close down the existing manufacturing plant on 24 December, and re-open on 29 January using the IMF.
CRITICAL PATH
Final approval of this proposal is required by 30 September, so we can place an order with FFS in time for them to commence installation on 3 January 20X4.
End of Question Paper
2 SBL Mock 1(b) Question
Module: Strategic Business Leadership (SBL)
University: Association of Chartered Certified Accountants
