BBUS 425 Advanced Management Accounting
Case 1: Private Fitness, Inc.
Analysis of existing management and operation issues
Yunlong TangYen Hao ChaoInstructor: Tony BellSep 16, 2012
DATE: Sep 16, 2012
TO: Rosemary Worth, the owner of Private Fitness, Inc.
FROM: Yen Hao Chao and Yunlong Tang
RE: Analysis of existing management and operation issues
It’s a pleasure that we have a chance to review your company’s existing management and operation system. We believe that there are some serious management and operation problems which need to be changed or improved immediately. In this memorandum, we will identify those issues in management and operation system, and provide recommended solutions for solving problems. Issues in management and operation system
1. The biggest issue is that the company has less control on tracking all records, such as the number of clients, the length of any private fitness class, and the money transactions between customers and the company. Without this information, the company may not collect cash properly and prevent crimes from happening in the operation, such as money stealing 2. Some of the jobs from management level have not been well performed in the normal business operation, since all power and jobs have been centralized onto one person. 3. Employees might provide some private fitness classes to the client without reporting to the company. This is a very serious problem, since employment honesty is a huge benefit to the health of your business. Solution
We will provide you the suggestions based on two types of control which are action control and personal control. In action control, we recommend you to install a control system for tracking classroom usage and hire another financial manager to take over any financial jobs, operation cost and profit recording from Kate. In personnel control, we recommend you to regulate some new...
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