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Key terms: problem solving techniques; focal points; nutshelling; brainstorming.

Exercises

Exercise 1. Review questions:

  1. How can you minimise your difficulties and maximise the effectiveness while gathering and analysing the information for the report?
  2. What techniques can you use to solve the problem of writing a report?
  3. What are the rules for brainstorming?

Exercise 2. Reading and understanding:

Below you will see four sets of information. You have to decide the importance of this information for the reporting task.
Your company, Interblock Inc., is a large manufacturer of industrial machinery. You work as Assistant Manager in the Supply Department of Interblocks London headquarters. You have been asked by the Finance Manager to write the following report.
Terms of Reference:

  1. To investigate the range of photocopying equipment on the market in order to make recommendations for the purchase of new machines for the HQ offices.
  2. To establish the relative costs of renting, buying and leasing photocopying equipment and to make recommendations.

You have begun your investigation. So far, you have assembled four pieces of information. Read through these four pieces of evidence (A,B,C and D) and answer any questions that come before or after each one.

In deciding the relevance of some information, it is important to distinguish who it was written for. Was the following extract written for:

  1. photocopying equipment manufacturers?
  2. general readers?
  3. office supervisors?
  4. purchasers of photocopying equipment?

A. Article from office equipment survey

It is essential to get the correct machine for the volume that is required. In order to do this, it is necessary to obtain accurate estimates of the number of copies you make. A large proportion of companies who have replied to the Office Equipment Survey have not made proper estimates. The result is that they are running the wrong machine or are below minimum billing.
We asked Charles Sands, a business equipment consultant, to suggest a simple method of checking copy costs. He told us, First, establish the

monthly cost of your machine as $x. Over three years this is, say, 3.3% of capital cost. For example, a machine purchased for $2,670 gives a monthly cost of $88. Alternatively, work out a figure based on your own financial method. Because of high maintenance costs, a formula of $x + 1.25c per copy is required so as to cover most machines.
Taking a machine at $88 a month doing 7,000 copies, this works out at 2.5c per copy. Or, for 3,000, it equals 4.2c per copy. And then, of course, theres the paper, too.

 

You should be able to extract important details. Answer the following questions:

  1. What is most important when buying a photocopier?
  2. Why do many companies have the wrong machine?
  3. How much is it necessary to allow per copy above the cost of the machine?
  4. If the cost of a machine is $95 per month, what is the copy cost for 5,000 copies.

 

The second piece of evidence is the tapescript of an interview you had with Mrs Clarke, Office Supervisor in the Sales Department. During the interview, Mrs Clarke commented on the following aspects of the AX20 photocopier used in her office:

  1. speed
  2. situation
  3. breakdowns
  4. quality noise

While you are reading the tapescript, decide which of these factors is not relevant to your enquiry.

B. Interview with mrs Clarke

 

I: Mrs Clarke, Id like some information about AX20 photocopier used here in this office. For example, its efficiency ... suitability?
C: The worst thing, as far as Im concerned, is its position. Its placed very close to my desk and it also blocks the filing cabinets. Its very difficult for people...
I: I see. How long does it take to do a copy?
C: Im not sure exactly, but its extremely slow. And there always seem to be a lot of people waiting to use it. And more important, its always breaking down.
I: Can you be more specific on that last point?
C: I know the machine is unreliable because I had to call the engineer five times last month.
I: Yes, thats significant. What other disadvantages are there?
C: Well, I feel its an extremely noisy machine ... much noisier than the last one we had and the quality is not good either.
I: The quality?
C: Yes, according to my records, there were over 8% spoilt copies in June and nearly as many as that the month before ...

 

When deciding on the relevance of information, it is important to judge the value of opinions. Answer the following questions:

  1. In Mrs Clarkes opinion, what is the most disadvantageous thing about the photocopier?
  2. What evidence does Mrs Clarke give for poor quality?
  3. What evidence does Mrs Clarke have for slow copy time?
  4. Which of the following pieces of information would it be useful to obtain from Mrs Clarke:
  5. personnel permitted to use the photocopier?
  6. type of documents photocopied?
  7. number of photocopies done per day?
  8. type of copy paper used?

 

The next piece of evidence is much more factual.

C. Summary of Previous report made by
the purchasing department at interblock
HQ in July

 

The purpose of this report is to assess the relative costs of copy facilities based on different methods of payment. The methods examined are:

1 Rental 2 Leasing 3 Buying

1.1. The rate of rental depends on copy volume. On an AX20 at the minimum rate of 3,000 copies per month, the price is 2.9c per copy, excluding paper. At 10,000 copies a month, the rate is 1.75c. A total of $175.

2.1. On a five-year lease, the monthly charge, depending on tax relief, is approximately $44.13. In addition, 1.1c per copy is required for maintenance and service. On 3,000 copies, this amounts to $77.13 a month. On 10,000, it is $154.13.

3.1. The capital cost of buying, after tax, is $1125.60. Over five years, that is $18.76 a month. Add running costs of 1.1c per copy and that gives a monthly total of $51.76 for 3,000 copies and $128.76 for 10,000.

 

  1. When leasing, what does the machine charge depend on?
  2. Which method gives the cheapest copy cost?
  3. What is the copy cost at 3,000 copies per month when buying?

 

The fourth piece of evidence has been provided by Mr Madson of the Accounts Department at Interblock. It is a written statement of his views. While you are reading the statement, decide if Mr Madson is:

  1. putting forward an argument against renting?
  2. putting forward an argument against buying?
  3. putting forward an argument for leasing?
  4. putting forward an argument for renting?

 

D. Mr Madsons statement

 

The question of whether to lease, rent or buy is very complicated. It very much depends on the tax and cash position of a company. But one thing is clear: our present policy of buying is unwise. Because this type of equipment is constantly improving, it is necessary to make frequent changes. If you own a copier, you have to sell it. The trouble is that there is a very poor market for used machines. A secondary point is that Interblock is a large company that does not need to build up its assets in this way or have a debt on the balance sheet. At the same time, the advantages of leasing have been overstated. Many companies have regarded leasing as a means of avoiding tax. In fact, it only postpones it. The company must face a tax bill in the end. The only way to avoid making payment is for the company to go on leasing at an increased rate.

 

    • What is Mr Madsons principal argument against buying?
    • What have many companies misunderstood about leasing?
    • What causes companies to go on leasing at a higher level?
    • Now look back at the terms of reference on page 10. Which of the following would you like to know more about:
    • costs of renting, buying and leasing equipment;
    • the range of photocopying equipment on the market.

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