Chicken Run Case Study
Introduction
Excel Poultry & Meat Sdn Bhd (EPM) was established in 1998 to carry on chicken farming and supplying of whole chickens to various outlets in Malaysia. The company was one of the members of the Federation of Live-stock Farmers’ Associations of Malaysia (FLFAM). It was small and medium sized enterprise (SME) located in Kluang, Johor. Encik Selamat, a Certified Public Accountant (CPA) had been the General Manager of EPM. He was transferred from another subsidiary of the same group which dealt in the transportation business. At first, he was reluctant to accept the current position, however he began his function as the General Manager as he considered the job as a promotion that would add to his basket of skills and expertise. The career track had been smooth until the closing of the year 2008 when the company he presently helmed faced operational crises. This case highlighted the rule and regulation, leadership skill, and internal control system of this company.
Questions
1. Problem and issue facing by the company.
There are several problems and issues facing by the company. One of the problem is related to poor account receivable system. The balance amount in the account receivable of the company is not match with the confirmation sent to the customer. These things happen when Mr. Siva, one of the retail customers complaining that the figures on the statement of accounts sent to him was incorrect. He had made cash payment and paid all outstanding balance but the transaction was not recorded by Encik Munir, one of the former staff at the finance department. It shows that the company’s accounts are not in a proper order. Another problem arose is the rising cost of chicken feed gave big impact to this company and also to the country. As by August 2008, costing of chicken feed was increased from RM54.50 to RM88. The rising cost has automatically effect the cost of production which is had risen about 56.5%. Then, the sellers of chicken also did
Excel Poultry & Meat Sdn Bhd (EPM) was established in 1998 to carry on chicken farming and supplying of whole chickens to various outlets in Malaysia. The company was one of the members of the Federation of Live-stock Farmers’ Associations of Malaysia (FLFAM). It was small and medium sized enterprise (SME) located in Kluang, Johor. Encik Selamat, a Certified Public Accountant (CPA) had been the General Manager of EPM. He was transferred from another subsidiary of the same group which dealt in the transportation business. At first, he was reluctant to accept the current position, however he began his function as the General Manager as he considered the job as a promotion that would add to his basket of skills and expertise. The career track had been smooth until the closing of the year 2008 when the company he presently helmed faced operational crises. This case highlighted the rule and regulation, leadership skill, and internal control system of this company.
Questions
1. Problem and issue facing by the company.
There are several problems and issues facing by the company. One of the problem is related to poor account receivable system. The balance amount in the account receivable of the company is not match with the confirmation sent to the customer. These things happen when Mr. Siva, one of the retail customers complaining that the figures on the statement of accounts sent to him was incorrect. He had made cash payment and paid all outstanding balance but the transaction was not recorded by Encik Munir, one of the former staff at the finance department. It shows that the company’s accounts are not in a proper order. Another problem arose is the rising cost of chicken feed gave big impact to this company and also to the country. As by August 2008, costing of chicken feed was increased from RM54.50 to RM88. The rising cost has automatically effect the cost of production which is had risen about 56.5%. Then, the sellers of chicken also did