Operation management tma worksheet

Topics: Investment, Net present value, Capital budgeting Pages: 7 (1981 words) Published: December 4, 2013
Arab Open University
Tutor Marked Assignment (TMA)
Academic Year 2012 - 2013
Semester: Second 2012-2013
Branch: Kuwait
Program: Business Studies
Course Title: Business functions in context II
Course Code:B203B
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Section Number: 201
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Question 1
Hazelwood’s investment appraisal
Hazelwood Sandwiches is one of the largest food companies; it competes in a growing market this requires maintaining techniques for investing in people, product and plant. Investment decisions could be short or long terms decisions, they include using financial resources to purchasing assets for the company such as properties and equipment’s or advertising campaigns, those assets will bring future benefits for the company. In fact Investment appraisal is an evaluation of the investment opportunities, choosing the most profitable investment in order to maximize the profits of the company. Actually Hazelwood evaluate the effectiveness of each investment by investment appraisal methods such as net present value, payback period and Account Rate of Return.

Hazelwood Sandwiches market is growing so that they tend to make capital investments in people, products and plant in order to maximize the profit. First reason that led Hazelwood to invest in people because nowadays people are much busier, large amount of women is working so they don’t have time to prepare food for their families. Actually they are in their jobs taking short breaks for eating, so Hazelwood invest in their staff to develop their skills to do the tasks as fast as possible to meet the customer demand. Second, Hazelwood has made investments in plant; they build a manufacture in London with 1 million productions of sandwiches per week but when they invest more by building Manton Wood they produce more by 3 million sandwiches. Also with new powerful machines, they could reduce the human resources costs because fewer tasks need to be done .Also the stock levels will be reduced so that this will be successful for the company. Third reasons lead Hazelwood Sandwiches to make investments in the product that customers are looking for quality, different types of Sandwich to compare it when they are abroad, So Hazelwood try to provide a high quality, healthy and delicious sandwiches in order to meet the customer demand. In addition providing different types of sandwiches to satisfy all types of tastes and modify old items or create new ones.

Over all, there are many other reasons that lead Hazelwood to made capital investment .In fact they are trying to gain competitive advantage to maximize the wealth of owners. They use different techniques to evaluate the investment opportunities, and then choose the best project. Moreover, Hazelwood...

References: Robinson, H.1. (1986). Marketing Expenditure as Capital Investment. . European Journal of Marketing. 20 (1), p83-12p.
Levy, Haim1. (Dec68). A NOTE ON THE PAYBACK METHOD. Journal of Financial & Quantitative Analysis. 3 (4), p433-443.
News - Media Centre: Newsroom: News | NBK (National Bank of Kuwait). 2013. News - Media Centre: Newsroom: News | NBK (National Bank of Kuwait). [ONLINE] Available at: http://kuwait.nbk.com/mediacentre/newsroom/DetailNews_en_gb.aspx?newsid=1020_en_gb. [Accessed 29 April 2013]
ZAIN Careers | Our People. 2013. ZAIN Careers | Our People. [ONLINE] Available at: http://careers.zain.com/careers/zaingroup/Page.aspx?PageId=6020. [Accessed 29 April 2013]
Eddie McLaney, Peter Atrill (2010). Accounting: An Introduction. 5th ed. Harlow: Pearson Education Limited. P1-p856.
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