How to write your Thesis Writing?

Outline of the Thesis Writing:

Part I Preliminaries

Title Page
Acknowledgement
Table of Contents
List of Tables
List of Figures (if any)

Part II Main Text

Chapter 1 The Problem and its Setting
Chapter 2 Review of Related Literature and Studies
Chapter 3 Research Design and Procedure
Chapter 4 Presentation, Analysis, and Interpretation of Data
Chapter 5 Summary, Conclusion, and Recommendation

Part III Reference Materials

Bibliography
Appendices
Curriculum Vitae

Modified Constitution and By-laws of DPBE

Republic of the Philippines
RAMON MAGSAYSAY TECHNOLOGICAL UNIVERSITY
Graduate School
Castillejos Campus
Castillejos, Zambales


CONSTITUTION AND BY- LAWS
OF MBA-DYNAMIC PROFESSIONALS FOR BUSINESS EXCELLENCE
(DPBE) Organization


PREAMBLE

We, the Graduate Students of Ramon Magsaysay Technological University, in our earnest desire to foster closer professional relationship among ourselves that we may be able to work cooperatively on any activity that will redound to our own welfare in particular and to the progress of our Master of Business Administration in general, do hereby promulgate and adopt this Constitution and By-Laws.

ARTICLE I – NAME AND NATURE

Section 1. That, as bonafide students of Master of Business Administration (MBA) our organization shall be known as the Dynamic Professionals for Business Excellence and shall be identified hereafter as DPBE.

Section 2. That; this organization shall be an educational, civic, non-political, and non-sectarian organization.

Section 3. That, this organization aims to carry faithfully the ideals and objectives declared in the Preamble of the organization.

ARTICLE II – DECLARATION OF AIMS AND PRINCIPLES

Section 1. General Objectives:

Our organization aims to promote the academic welfare of MBA Graduate Students in attaining common goals and aspirations.

Section 2. Specific Objectives:

a. To support the aims and projects of this DPBE organization in the advancement of education and uplift the student’s moral values.
b. To help school authorities carry out the rules and regulations of the organization.
c. To serve as the voice of the Graduate students in expressing their needs to the RMTU administration.
d. To maintain its status as an independent organization.

ARTICLE III – MEMVERSHIP, FEES AND FUND

Section 1. MBA Graduate students officially enrolled in the Ramon Magsaysay Technological University (RMTU), Castillejos Campus are automatically members of the DPBE.

Section 2. For membership fee - Every DPBE Member agreed to pay the amount of P100.00 (pesos) every semester upon enrollment.

Section 3. Every DPBE Officer and Member shall contribute to any activities or projects of the organization.

Section 4. Fund – all funds collected, solicited and generate from fund raising activity shall be exclusively own by the organization. Funds shall be under the dual custody of the Treasurer and the President of the organization.

In the absence of any of the authorized signatory custodian, the organization thru its elected officers shall appoint an alternate signatory custodian for effectively dispensing organization funds.

ARTICLE IV – MEMBERSHIP AND PENALTIES

Section 1 Qualifications of members.

This organization shall be open for members with the following qualifications:

a. Bonafide Graduate students of RMTU Business Administration.
b. Must possess good moral character.
c. Must have satisfactorily passed all their academic subjects they were enrolled in during the previous semester immediately prior to their application for membership
d. Must be able to prove their worth and upholding the values and principles of the DPBE Organization.

Section 2. Status of Membership

The status of membership of every member shall be evaluated every second week of the first month of trimester. Members shall be classified according to the following qualifications:

a. DPBE members deemed active members if they paid the corresponding fees and able to attend at least 50% of the total number of the regular activities held by the organization and are present in at least 50% of the total number of special activities held within the current year.
b. The members shall be deemed inactive if the requirement in the succeeding paragraph is not met.
c. They shall be deemed probationary members if Section 1 (b-c) and
paragraphs (a) of this section are not complied with.

Section 3. Privileges and Obligations of Members
Privileges of Members

a. All active members shall have the following privileges:

1. To vote in the regular election of members.
2. To be voted to any position in the organization.
3. To attend all the meetings of the organization.
4. To participate in any activity and program of the DPBE organization.
b. All members regardless of status shall enjoy the following:

1. To be recognized as members
2. To avail of the trainings and other services that the organization shall offer.

c. To attend participate in the regular and special activities of the organization.
d. To consult with the group regarding any major problem or conflict that may be experienced or encountered.
e. All members have a responsibility to promote and contribute to the general welfare of the institution.
f. All members are responsible in maintaining standard of the academic performance established by the University.
g. All members have the right t use the school facilities provided with the permission from the administration or officials of the campus.
h. All active members with good standing in the organization have the
right to use organization facilities, equipment/s wholly own by the organization, books and other educational materials

1. Usage of organization facilities, equipment/s, and educational material shall be solely intended for the MBA class or school activity/s. No member shall be allowed to use such facilities, equipment other than as mention above.

Section 4. Penalties for non-payment of membership fee:

a. Members of the said organization that fails to pay membership fee of 100.00 will lose the following:

1. Membership status
2. Privileges of members

ARTICLE V - DPBE ADVISERS

Section 1. The DPBE Board of Advisers shall be composed of two members.

Section 2. The advisers are elected by the students from among the professors of the graduate program.

Section 3. The advisers shall have the following duties and responsibilities:

a. Attend the meetings of the organization;
b. Make themselves available for consultation to all members of the organization, especially the officers;
c. Assist in the planning of activities of the organization to assure that the activities realize the objectives of the organization.
d. Shall foster unity within the organization.

ARTICLE VI – ORAGANIZATIONAL STRUCTURE AND
ELECTION OF OFFICERS

Section 1. This organization shall have the following regular officers:

President
Vice - President
Secretary
Treasurer
Auditor
PRO’s
Business Managers
Sgt. at Arms

Section 2. Any regular active member shall be eligible for election to any of the positions above.

Section 3. Any of the positions above is vacated only on the following reasons:

a. Inactivity the officer according to Article IV – Membership Section 2 (a) and (c).
b. If the officer shall have graduated and is no longer enrolled in the University.
c. Failure of the officer to assume his or her functions as provided in Section 5 of this article and such failure threatens the organization's image or the success of any of its projects.
d. Failure of any officer to comply with the moral character requirement and is deemed to have committed any act that degrades the image of and negates the values that the organization stands for.
e. If the officer is unable to cope with his academic requirements manifested by failure in at least 30% of the total number of subject he or she has enrolled in during the semester immediately preceding the period of his evaluation shall be performed by all the regular officers with their advisers meeting in a regular or special session.

Section 4. Term of Office and Succession. All officers shall have a one academic year (three consecutive semesters). Any position vacated not by termination of the regular term of the officer shall be filled in by any member elected by at least a majority of all the regular active members of the organization in a special election which shall be held within 2 weeks immediately after the office has been vacated. The succeeding officer shall serve only for the remaining period of the term of the officer he or she has replaced.

Section 5. Election. The Election for the new set of officers shall be held on the third week of the first month after enrollment of every semester.

Section 6. Candidates to any position must file their certificate of candidacy at the Office of the RMTU Executive Dean at least 15 days before the scheduled date of election.

a. Re-election of officers. No officers shall be allowed to run for the same position for two consecutive years. However, should a present officer aim to run for the next election he/she should apply for a different position.

Section 7. The duly elected officers shall meet within one (1) week after the proclamation to which time the outgoing officers shall turn over all records and properties to the new DPBE Officers.

Section 8. Functions of the Officers. The Officers listed in Section 1 of this Article shall have the following respective functions:

A. President:

1. To preside in all regular and special meetings of the organization;
2. To lead the members in their regular and special activities both within and outside the campus;
3. To represent the organization school and community affairs where such participation is called for;
4. To coordinate the functions of various committees and school officers regarding all major activities that shall significantly affect the normal operation of the school;
5. To make recommendations to the body and to the designated advisers on how to discipline members.
6. To delegate functions to officers and members as needs arise.

B. Vice President

1. To assist the President in his or her major functions;
2. To assume and perform the functions of the President in his or her absence;
3. To assume functions and responsibilities delegated by the DPBE President and Advisers within the framework of this Charter.

C. Secretary

1. To make the minutes of all the regular and special sessions and meetings and submit a copy of the report thereof to the advisers and keep a copy for filing;
2. To lead in the documentation of all the activities of the organization.
3. To assume functions and responsibilities delegated to him by the DPBE President and Advisers within the framework of this Charter.

D. Treasurer

1. To keep records of all financial transactions of the organization including receipts, voucher, etc;
2. To make available such records to any member or any party who has a valid stake in the organization's operation;
3. To keep all monies from donations, contributions, solicitation, and fees of the organization;
4. To make a yearly organizational financial statement, a report of which shall be delivered to the body in the last regular meeting for the current year.
5. To present a budget and tentative schedule of suggested fund raising activities for the organization.
6. To see that the money used on behalf of the organization is used wisely and in a manner which suits its purpose.
7. To see the day to day expenditures of the organization.
8. To assume functions and responsibilities delegated by the DPBE President and Advisers within the framework of this Charter.


E. Auditor

1. To make a regular audit of the organization's financial and other related transactions, a report of which he or she shall accomplish and make ready for public consumption;
2. To report any anomaly or defect in the disbursement and collection of organizational funds to the advisers and the Board of Directors; and
3. To assume functions and responsibilities delegated by the DPBE President and Advisers within the framework of this Charter.

F. Business Manager

1. To lead in the designing of plans and proposal for projects that shall generate income for the organization;
2. To lead in the making of yearly budget for the organization;
3. To assume functions and responsibilities delegated by the DPBE President and Advisers within the framework of this Charter.

G. Sergeant at Arms

1. To call officers and members meetings to order, and shall adjourn each said meeting.
2. To see to it that all activities taken by the organization are in accordance with the constitution and by-laws.
3. To see to it that all members are given the chance to speak and to be heard at general membership meetings.
4. To supervise elections and see that they are carried out as set forth in the by-laws in a fair and just manner.
5. To oversee the impeachment process.
6. To lead in securing the safety of the members and functions of the organization.
7. To report any untoward events that shall threaten the security of the organization; and
8. To assume functions and responsibilities delegated by the DPBE President and Advisers within the framework of this Charter.

ARTICLE VII – IMPEACHMENT AND SUSPENSION

Section 1. Grounds for Impeachment

a. Abuse of power
b. Deliberate disregard of the DPBE Constitution.
c. Willful misbehavior or scandalous and immoral conduct inside and outside of the campus.
d. Misappropriation of DPBE Funds and Properties

Section 2. Grounds and Suspension

a. Three (3) consecutive unexcused absences from the DPBE meetings and activities.
b. Officers of the DPBE may be impeached and suspended for his misbehavior with the concurrence of 2/3 votes of the officers.

ARTICLE VIII – MEETINGS AND QUORUM

Section 1. There shall be two classes of meetings namely: regular meeting and special meeting.

Section 2. Regular meeting composed of DPBE Members, which shall be held every last Saturday of the month from 11:30 am to 12:00 noon. In the event that the meeting is not held due to bona-fide reasons, it must be held in the following Saturday.

Section 3. Special meeting shall be called for any time of the regular school days as may be deemed necessary.

Section 4. Any officers of the DPBE who failed to attend every meeting without valid reason shall punish as follows:

1. first absence.....................................30.00
2. second absence.....................................50.00
3. third absence.....................................replacement

Section 5. Quorum. A majority of the DPBE Officers of fifty percent (50%) plus fifty percent (50%) of the DPBE-Members shall constitute a quorum to conduct a business.

ARTICLE IX – SPECIAL PROVISION

Section 1. The DPBE Organization Officers whether elected or appointed shall take an oath of office to support this constitution.

Section 2. The DPBE Organization shall adopt the University Seal and the prescribed School Identification (I.D.) Card.

Section 3. All MBA Graduate students who will not wear the school I.D. shall be subject to fine 10.00 of which goes to the DPBE Organization fund.



ARTICLE X – AMENDMENTS, RATIFICATION AND EFFECTIVITY

Section 1. Amendments - This Constitution and By-Laws is or any provisions may hereby be amended, modified or replaced by a two-thirds vote of the active DPBE Members present, provided that the amendment proposed had been submitted in writing to the president and posted in the bulletin board of the school for at least two weeks prior to regular or special meeting dully called for the purposes.

Section 2. This Constitution shall take effect of on the day following its ratification and upon approval by the DPBE President.



Approved by:



Dr. Renato P. Ruba
Executive Dean

DPBE-MBA Officers 2010-2011

Republic of the Philippines
RAMON MAGSAYSAY TECHNOLOGICAL UNIVERSITY
Graduate School
Castillejos Campus
Castillejos, Zambales

MASTER OF BUSINESS ADMINISTRATION
Dynamic Professionals for Business Excellence (DPBE) Officers:


President : Dante O. Alatiit

Vice-President : Marycel V. Pamintuan

Secretary : Liezel G. Lachica

Treasurer : Jamaica F. Austria

Auditor : Arvin Hernandez


PRO’s : 1. Ronald V. Tactaquin
2. Robert M. Castro
3. Rhoda N. Flore

Business Managers : 1. Iredell M. Bueno
2. Dexter E. Bergonio


Sgt. at Arms : 1. Norvadez R. Gonzales
2. Pocholo Mangohig


DPBE Advisers : 1. Dr. Magdalena D. Bautista
2. Dr. Irene M. Ebal


Approved by:


DR. RENATO P. RUBA
Executive Dean

How to Write Chapter 5 for Thesis Writing

HOW TO WRITE CHAPTER 5
Chapter 5: SUMMARY, CONCLUSION, & RECOMMENDATION

This is the last chapter of the thesis and the most important part because it is here where the findings, and the whole thesis for that matter, are summarized; generalizations in the form of conclusions are made; and the recommendations for the solutions of problems discovered in the study are addressed to those concerned.

Summary of Findings
Guidelines in writing the summary of findings. The following should be the characteristics of the summary of findings:
1. There should be a brief statement about the main purpose of the study, the population of respondents, the period of the study, method of research used, the research instrument, and the sampling design. There should be no explanations made.
2. The findings may be lumped up all together but clarity demands that each specific question under the statement of the problem must be written first to be followed by the findings that would answer it. The specific questions should follow the order they are given under the statement of the problem.
3. The findings should be textual generalizations, that is, a summary of the important data consisting of text and numbers. Every statement of fact should consist of words, numbers, or statistical measures woven into a meaningful statement. No deduction, nor inference nor interpretation should be made otherwise it will only be duplicated in the conclusion.
4. Only the important findings, the highlights of the data, should be included in the summary, especially those upon which the conclusions should be based.
5. Findings are not explained nor elaborated upon anymore. They should be stated as concisely as possible.
6. No new data should be introduced in the summary of findings.

Conclusions:

1. Conclusions are inferences, deductions, abstractions, implications, interpretations, general statements, and/or generalizations based upon the findings. They should not contain any numerical because numerical generally limit the forceful effect or impact and scope of a generalization. No conclusions should be made that are not based upon the findings.
2. Conclusions should appropriately answer the specific questions raised at the beginning of the investigation in the order they are given under the statement of the problem. The study becomes almost meaningless if the questions raised are not properly answered by the conclusions.
3. Conclusions should point out what were factually learned from the inquiry. However, no conclusions should be drawn from the implied or indirect effect of the findings. The conclusion should be based upon the responses to the questions.
4. Conclusions should be formulated concisely, that is, brief and short, yet they convey all the necessary information resulting from the study as required by the specific questions.
5. Without any strong evidence to the contrary, conclusions should be stated categorically. They should be worded as they are 100 percent true and correct. They should not give any hint that the researcher has some doubts about their validity and reliability. The use of qualifiers such as probably, perhaps, may be, and the like should be avoided as much as possible.
6. Conclusions should refer only the population, area, or subject of the study.
7. Conclusions should not be repetitions of any statements anywhere in the thesis. They may be recapitulations if necessary but they should be worded differently and they should convey the same information as the statements recapitulated.

Some Dangers to Avoid in Drawing up Conclusions Based on Quantitative Data
This is so important because in some instances quantitative data are either inaccurate or misleading either unwittingly or by design. The data should be analyzed very critically to avoid misleading interpretations and conclusions. Among the factors that a researcher should guard against are the following:
1. Bias –usually present or manipulate figure of their surveys or respondents of a certain business establishments, agencies, or organizations in their favor.
2. Incorrect generalization – an incorrect generalization is made when there is a limited body of information or when the sample is not representative of the population. This is the result of built-in sampling bias.
3. Incorrect deduction – this happens when a general rule is applied to a specific case.
4. Incorrect comparison – a basic error in statistical work is to compare two things that are not really comparable.
5. Abuse of correlation data – a correlation study may show a high degree of association between two variables. They may move in the same direction at the same rate but it is not right to conclude at once that one is the cause of the other unless confirmed so by other studies.
6. Limited information furnished by nay one ratio – a ratio shows only a partial picture in most analytical work. Avoid as much as possible making conclusions not sufficiently and adequately supported by facts.
7. Misleading impression concerning magnitude of base variable – ratios can give erroneous impressions when they are used to express relationships between two variables of small magnitudes. To avoid making false impressions by making conclusions using ratios concerning variables of very small magnitudes, use the original data because the relationship is clear even without the use of a ratio.

Recommendations:
Guidelines in writing the recommendations. Recommendations are appeals to people or entities concerned to solve or help solve the problems discovered in the inquiry. They should have the following characteristics:
1. As mentioned above, the recommendations should aim to solve or help solve problems discovered in the investigation
2. No recommendations should be made a problem, or any thing for that matter, that has not been discovered or discussed in the study. Recommendations for things not discussed in the study are irrelevant.
3. There may also be recommendations for the continuance of a good practice or system, or even recommendation for its improvement. This is to insure a continuous benefit being accorded to the universe involved.
4. Recommendations should aim for the ideal but they must be practical, feasible, and attainable. It is useless to recommend the impossible.
5. Recommendations should be logical and valid.
6. Recommendations should be addressed to the persons, entities, agencies, or offices who or which are in a position to implement them.
7. There should be a recommendation for further research on the same topic in other places to verify, amplify, or negate the findings of the study. This is necessary so that if the findings are the same, generalizations of wider application can be formulated.

For recommending similar researches to be conducted, the recommendation should be: It is recommended that similar researches should be conducted in other places.
Evaluation of a Thesis or Dissertation
Generally, a thesis or dissertation has to be defended before a panel of examiners and then submitted to the proper authorities for acceptance as a piece of scholarly work. The following are offered to be the general criteria in judging the worthiness of a thesis or dissertation:
For Conclusions (Generalizations):
1. Are the conclusions based upon the findings?
2. Do they answer the specific questions raised at the beginning of the investigation?
3. Are they logical and valid outcomes of the study?
4. Are they stated concisely and clearly and limited only to the subject of the study?
For Recommendations:
1. Are the recommendations based upon the findings and conclusions?
2. Are they feasible, practical, and attainable?
3. Are they action-oriented? (They recommend action to remedy unfavourable condition discovered)
4. Are they limited only to the subject of the study but recommend further research on the same subject?

Final Exam Questions in Business Environment

Final Examination in Business Environment:

1. In Philippine Airlines (PAL). Discuss and have your own position from the point of view of the employee and management. Do you think it will be resolved?
2. The proposal to have common currency in Asian country. Discuss and have your own position.
3. The impact of modern technology in terms of socio-economic influence.

Final Exam Questions - Investment Management

Final Examination in BA 405 – Investment management

Discussions:

1. What make stocks a good investment? Explain
2. What is the most basic measurement of investment risks? When you have identified the most basic measurement of investment risks, what is the logic in using this measure & what do the values represent?
3. If an investor is considering two stocks with exactly the same projected rates of return and identical standard deviation of returns. What condition would it make sense to hold both of them rather than just one?
4. What is the common risk measurement for fixed income investment? Explain.

Reaction from our MBA 2010 Field trip

The whole trip was indeed successful although, I experienced hardships and sleepless night in planning a successful educational MBA Field Trip for our Marketing and Investment Class. It serves as our bonding trip for all of us. We able to learned so many things in starting a business and its marketing strategies. It was indeed successful and a very informative trip.

Contribution for the Field Trip

Attention to all DPBE Officers & Members:

Please be informed that our 1,000.00 contribution for our field trip must be given this coming September 4, 2010 and additional 100.00 for the DPBE membership fee.


Thank you,

Jamaica "Jham"
Treasurer

DPBE Officers 1st Meeting

ATTN: All DPBE Officers

Please be informed that we will be having our 1st meeting this coming Saturday (September 4, 2010) between 11:30-12:30pm; headed by our Pres. Marlon Jaranilla. We will be discussing MBA by Laws. Location will be announced early in the morning on Saturday.

DPBE Officers, Kindly post your contact number/email address for further details.


Thank you,
Liezel Lachica
(Secretary)

Mid-Term Examination in Business Environment

Mid-Term Examination in Business Environment


Questions:

1. Business organizations are primarily established for profit. However they also have responsibilities to individual workers/employees and to society as well. How do you reconcile these conflicting objectives/goals? Or are they irreconcilable? Why or why not?

2. Competition in the economy is the name of the game. If you were to put up a business today would you opt to do in perfectly competitive monopolistic or oligopolistic market situation. Why?

3. Is the government of President Aquino conducive to business activities? Assess the business environment during his first 100 days in office, will his call for “Tuwid na Landas” in governance and public administration spell magic for its economy? Compare this environment with that of PGMA’s nine years stay in power.

DPBE Officers and Members

DPBE Officers & Members

1. Name : Marlon D. Jaranilla, “Marl”
Position : DPBE - President
: Bachelor of Science in Business Administration
Major: Management
Manager -LBC


2. Name : Dante O. Alatiit, “Dan”
Position : DPBE - Vice-President
: BS Psychology
Professor –RMTU
Administrator in Education - CELTECH

3. Name : Liezel G. Lachica
Position : DPBE - Secretary
: BS Psychology

4. Name : Jamaica F. Austria, “Jham”
Position : DPBE - Treasurer
: Bachelor of Science in Computer Engineering (BS-CoE)
Specialized in Web Development & AUTOCAD 2D & 3D

5. Name : Arvin Hernandez, “Arvin”
Position : DPBE- Auditor
: Bachelor of Science in Business Administration
Major : Management Information System (MIS)
Instructor – Gordon College

6. Name : Robert M. Castro
Position : DPBE- PRO
: BS- Computer Science

7. Name : Ronald V. Tactaquin, “Nad”
Position : DPBE – PRO
: BS- Accountancy
Manager- KAZAMA GRAMEEN INC.

8. Name : Rhoda N. Flores, “Rhoda”
Position : DPBE –PRO
: BSC - Management

9. Name : Iredell M. Bueno, “Ding”
Position : DPBE- Business Manager
: Bachelor of Science in Mechanical Engineering (BS-ME)
Businessman


10. Name : Bernabe A. Gamboa, “Bern/Bernie”
Position : DPBE – Business Manager
: BSBA - Management
Branch Operation Manager – PJ Lhuillier Inc

11. Name : Norvadez R. Gonzales, “Norvz”
Position : DPBE- Sgt. At Arms
: Bachelor of Science in Information Technology (BS-IT)
Instructor I – AMA
Instructor - RMTU

12. Name : Pocholo Mangohig
Position : DPBE- Sgt. At Arms
: BS Customs Administration
Course Coordinator/ Instructor – Gordon College


DPBE Members:

1. Francisco Alejo Jr., “Francis”
BS- Computer Science
Instructor – Kolehiyo ng Subic


2. Vanessa Joy L. Acuevera, “Nessa”
BS-Computer Science
Instructor – Network Computer & Business Colleges


3. Jeffrey J. Amante
BS – Computer Science
Pastor/Instructor – Prayer of Faith Church/Network Computer & Business Colleges


4. Angelica M. Alforte, “Gigi”
BS – Computer Science
Pastor/Instructor – Prayer of Faith Church/Network Computer & Business Colleges



5. Reynaldo A. Bascon


6. Jason M. Bagason
Bachelor of Science in Hotel & Restaurant Management (BS- HRM)
Instructor – Gordon College


7. Ma. Lorenee S. Belino
BS- Business Administration- Management


8. Dexter E. Bergonio, “Dex”
BS- Business Administration – Management
Area Technical Staff – PJ Lhuillier, Inc.


9. Ashley C. Borja
Office Personnel – Precious Child Montesorri of Zambales, Inc.


10. Eugene Butalon
BS – Computer Science


11. Mary Jane N. Concepcion, “Jane”
BS- Accountancy
Manager- KAZAMA GRAMEEN INC.


12. Jaypee H. Cruz, “Jia Pei”
BS – Information Technology
Instructor


13. Shirly P. Daliposa, “She”
Bachelor of Science in Business Administration
Major: Accounting
San Felipe Water District




14. Catherine M. Derla, “Cath”
Bachelor of Science in Hotel & Restaurant Management (BS-HRM)
Instructor I -RMTU


15. Lourdes M. Dela Cruz, “Dhes”
Bachelor of Science in Business Administration
Major: Banking & Finance
Treasurer’s Office in Municipality of Subic, Zambales


16. Eva Rosal O. Doropan
Bachelor of Science in Tourism
Instructor- Botolan Community College


17. Ma. Lota G. Figueroa, “Lhota”
BS – Computer Science
Pastor– Prayer of Faith Church


18. Sherydan P. Gamboa, “Dhang”
BS – Psychology
Collection Representative/ Financial Analyst
Treasury Department, SBMA


19. Myline G. Hermogino


20. Jean Pearl A. Justo, “Pearl”


21. Jessica C. Lingad, “Jes”
BS – Accountancy
PAG-IBIG Branch Dinalupihan Branch


22. Evangeline L. Malong, “Vangie”
BS- Accountancy
KAZAMA GRAMEEN INC.


23. Diana Ross N. Mazo
Subic Shipyard & Engineering, Inc.


24. Alexander R. Molina, “Zander”
BS- Accountancy
Area Manager-KAZAMA GRAMEEN INC


25. Mary Ann E. Nozuelo, “Mhean”
BSBA- Management
Pastor/Instructor – Prayer of Faith Church/Network Computer & Business Colleges

26. Marycel V. Pamintuan, “Cey”
BSC- Banking & Finance
Manager-KAZAMA GRAMEEN INC

27. Jealina A. Solidon, “Jhe”
BS – Information Technology
Pastor/Instructor – Prayer of Faith Church/Network Computer & Business Colleges

DPBE Constitution and By-Laws

Republic of the Philippines
RAMON MAGSAYSAY TECHNOLOGICAL UNIVERSITY
Graduate School
Castillejos Campus
Castillejos, Zambales

CONSTITUTION AND BY- LAWS
OF DYNAMIC PROFESSIONALS FOR BUSINESS EXCELLENCE(DPBE) Organization

PREAMBLE

We, the Dynamic Professionals for Business Excellence students of Ramon Magsaysay Technological University, in our earnest desire to foster closer relationship among ourselves that we may be able to work cooperatively on any activity that will redound to our own welfare in particular and to the progress of our MBA Organization in general, do hereby promulgate and adopt this Constitution and By-Laws.


ARTICLE 1- NAME AND NATURE

Section 1. This MBA Organization shall be known as the Dynamic Professionals for Business Excellence and shall be identified as DPBE.
Section 2. This organization shall be a civic, non-political, and non-sectarian Organization.
Section 3. This organization shall be composed of bonafide MBA students of Ramon Magsaysay Technological University of the Graduate Studies Program.
Section 4. The Purpose of this organization is to carry faithfully the ideals and objectives declared in the Preamble of the organization.


ARTICLE 11- DECLARATION OF AIMS AND PRINCIPLES


Section 1. The DPBE is a MBA organization composed of dynamic professionals in different field of expertise.
Section 2. General Objectives:
a. to promote general welfare of the masteral students.
b. to unite masteral students in attaining common goals and aspirations.
Section 3. Specific Objectives:
a. to support the aims and projects of this institution in the advancement of education and upliftment of the student's moral values.
b. to help school authorities carry out the rules and regulations of the organization.
c. to be the voice of the masteral students in expressing their needs to the administrations.
d. to maintain its status as an independent organization.
e. to primarily be identified as DPBE an MBA Organization composed of dynamic business professionals.
f. to serve as a forum for discussions of issues and develop a policy agenda for DPBE.



ARTICLE III - MEMBERSHIP, FEES, AND REFUND


Section 1. Masteral students officially enrolled in the Ramon Magsaysay Technological University, are automatically members of the DPBE.

Section 2. For membership fee - Every DPBE Member shall pay 100.00 every semester upon enrollment.

Section 3 Every DPBE Officer and Member shall pay specific fees for contribution for any class activities or class projects.

Section 4 Excess fund –all excess fund with regards to all contributions will become a secured fund for future activities.



ARTICLE IV – MEMBERSHIP AND PENALTIES

Section 1. Oualifications of members.
This organization shall be open for membership to anyone with the following qualifications:
a. Bonafide student of Master in Business Administration of Ramon Magsaysay Technological University, Graduate Studies Program of Castillejos Campus.
b. Must posses good moral character
c. Must have satisfactorily passed all their academic subjects they were enrolled in during the previous semester immediately prior to their application for membership.
d. Must be able to prove their worth and upholding the values and principles of the DPBE Organization.

Section 2. Status of Membership.
The status of membership of every member shall be evaluated every second week of the first month of trimester. Members shall be classified according to the following qualifications:
a. DPBE members shall deemed active members if they are able to attend at least 50% of the total number of the regular activities held by the organization and are present in at least 50 % of the total number of special activities held within the current year.
b. The members shall be deemed inactive if the requirement in the succeeding paragraph is not met.
c. They shall be deemed probationary members if Section 1 (b-c) and paragraph (a) of this section are not complied with.


Section 3. Privileges and Obligations of Members
Privileges of Members
a. All active members shall have the following privileges:
1. To vote in the regular election of members.
2. To be voted to any position in the organization.
3. To attend all the meetings of the organization.
4. To participate in any activity and program of the DPBE Organization.
b. All members regardless of status shall enjoy the following:
1. To be recognized as members.
2. To avail of the trainings and other services that the organization shall offer.
c. To attend and participate in the regular and special activities of the organization.
d. To consult with the group regarding any major problem or conflict that may be experienced or encountered.
e. All members have a responsibility to promote and contribute to the general welfare of the institution.
f. All members are responsible in maintaining standard of the academic performance established by the university.
g. All members have the right to use the school facilities provided with the permission from the administration or officials of the campus.

Section 4 Penalties for non-payment of membership fee:
a. members of the said organization that fails to pay membership fee of 100.00 will lose the following:
1. Membership status
2. Privileges of members
3. No refund for the contribution fees


ARTICLE IV – DPBE ADVISERS

Section 1. The DPBE Board of Advisers shall be composed of two members.
Section 2. The advisers are elected by the students from among the professors of the graduate program.
Section 3. The advisers shall have the following duties and responsibilities:
a. attend the meetings of the organization;
b. make themselves available for consultation to all members of the
organization, especially the officers;
c. assist in the planning of activities of the organization to assure that the activities realize the objectives of the organization.
d. Shall foster unity within the organization.


ARTICLE V - ORGANIZATIONAL STRUCTURE AND ELECTION OF OFFICERS


Section 1. This organization shall have the following regular officers:
President
Vice - President
Secretary
Treasurer
Auditor
PRO’s
Business Managers
Sgt. at Arms

Section 2. Any regular active member shall be eligible for election to any of the positions above.

Section 3. Any of the positions above is vacated only the following reasons:
a. inactivity of the officer according to Article IV – Membership Section 2 (b) and (c).
b. if the officer shall have graduated and is no longer enrolled in the University
c. failure of the officer to assume his or her functions as provided in Section 5 of this article and such failure threatens the organization's image or the success of any of its projects.
d. Failure of any officer to comply with the moral character requirement and is deemed to have committed any act that degrades the image of and negates the values that the organization stands for.
e. If the officer is unable to cope with his academic requirements manifested by failure in at least 30% of the total number of subject he or she has enrolled in during the semester immediately preceding the period of his evaluation shall be performed by all the regular officers with their advisers meeting in a regular or special session.

Section 4. Term of Office and Succession. All officers shall have a one academic year (three consecutive semesters). Any position vacated not by termination of the regular term of the officer shall be filled in by any member elected by at least a majority of all the regular active members of the organization in a special election which shall be held within 2 weeks immediately after the office has been vacated. The succeeding officer shall serve only for the remaining period of the term of the officer he or she has replaced.

Section 5. Election. The Election for the new set of officers shall be held on the third week of the first month after enrollment of every semester.

Section 6. Candidates to any position must file their certificate of candidacy in the
Commission on Election at least 15 days before the scheduled date election.

Section 7. The duly elected officers shall meet within one (1) week after the proclamation to which time the outgoing officers shall turn over all records and properties to the new DPBE Officers.

Section 8. Functions of the Officers. The Officers listed in Section 1 of this Article shall have the following respective functions:


A. Mr. Marlon D. Jaranilla - President:
1. To preside in all regular and special meetings of the organization;
2. To lead the members in their regular and special activities both within and outside the campus;
3. To represent the organization school and community affairs where such participation is called for;
4. To coordinate the functions of various committees and school officers regarding all major activities that shall significantly affect the normal operation of the school;
5. To make recommendations to the body and to the designated advisers on how to discipline members.
6. To delegate functions to officers and members as needs arise.


B. Mr. Dante O. Alatiit - Vice – President:
1. To assist the President in his or her major functions;
2. To assume and perform the functions of the President in his or her absence;
3. To assume functions and responsibilities delegated by the DPBE President and Advisers within the framework of this Charter.

C. Ms. Liezel G. Lachica - Secretary:

1. To make the minutes of all the regular and special sessions and meetings and submit a copy of the report thereof to the advisers and keep a copy for filing;
2. To lead in the documentation of all the activities of the organization.
3. To assume functions and responsibilities delegated to him by the DPBE President and Advisers within the framework of this Charter.

D. Ms. Jamaica F. Austria - Treasurer:

1. To keep records of all financial transactions of the organization including receipts, voucher, etc;
2. To make available such records to any member or any party who has a valid stake in the organization's operation;
3. To keep all monies from donations, contributions, solicitation, and fees of the organization;
4. To make a yearly organizational financial statement, a report of which shall be delivered to the body in the last regular meeting for the current year.
5. To present a budget and tentative schedule of suggested fund raising activities for the organization.
6. To see that the money used on behalf of the organization is used wisely and in a manner which suits its purpose.
7. To see the day to day expenditures of the organization.
8. To assume functions and responsibilities delegated by the DPBE President and Advisers within the framework of this Charter.

E. Mr. Arvin Hernandez - Auditor:
1. To make a regular audit of the organization's financial and other related transactions, a report of which he or she shall accomplish and make ready for public consumption;
2. To report any anomaly or defect in the disbursement and collection of organizational funds to the advisers and the Board of Directors; and
3. To assume functions and responsibilities delegated by the DPBE President and Advisers within the framework of this Charter.


F. Mr. Iredell M. Bueno - Business Manager
Mr. Bernabe A. Gamboa – Business manager

1. To lead in the designing of plans and proposal for projects that shall generate income for the organization;
2. To lead in the making of yearly budget for the organization;
3. To assume functions and responsibilities delegated by the DPBE President and Advisers within the framework of this Charter.

G. Mr. Norvadez R. Gonzales -Sgt. - At- Arms
Mr. Pocholo Mangohig – Sgt. At Arms

1. To call officers and members meetings to order, and shall adjourn each said meeting.
2. To see to it that all activities taken by the organization are in accordance with the constitution and by-laws.
3. To see to it that all members are given the chance to speak and to be heard at general membership meetings.
4. To supervise elections and see that they are carried out as set forth in the by-laws in a fair and just manner.
5. To oversee the impeachment process.
6. To lead in securing the safety of the members and functions of the organization.
7. To report any untoward events that shall threaten the security of the organization; and
8. To assume functions and responsibilities delegated by the DPBE President and Advisers within the framework of this Charter.


ARTICLE VI - IMPEACHMENT AND SUSPENSION

Section 1. Grounds for Impeachment
a. abuse of power
b. deliberate disregard of the DPBE Constitution.
c. willful misbehavior or scandalous and immoral conduct inside and outside of the campus.
d. Misappropriation of DPBE Funds and Properties.
Section 2. Grounds and Suspension
a. three (3) consecutive unexcused absences from the DPBE meetings and activities.
b. Officers of the DPBE may be impeached and suspended for his misbehavior with the concurrence of 2/3 votes of the officers.


ARTICLE VII - MEETINGS AND QUORUM


Section 1. There shall be two classes of meetings namely: regular meeting and special meeting.
Section 2. Regular meeting composed of DPBE Members, which shall be held every last Saturday of the month from 11:30 am to 12:00 noon. In the event that the meeting is not held due to bonafide reasons, it must be held in the following Saturday.
Section 3. Special meeting shall be called for any time of the regular school days as may be deemed necessary.
Section 4. Any officers of the DPBE who failed to attend every meeting without valid reason shall punish as follows:
1. first absence. .. .. .. .. .. . . .. .. .. .. . .30.00
2. second absence... ... ... ....... …….. 50.00
3. third absence.. . .. .. . .. . .. .. .. .. …..replacement
Section 5. Quorum. A majority of the DPBE Officers of fifty percent (50%) plus fifty percent (50%) of the DPBE-Members shall constitute a quorum to conduct a business.


ARTICLE VIII - SPECIAL PROVISION

Section 1. The DPBE Organization Officers whether elected or appointed shall take an oath of office to support this constitution.
Section 2. The DPBE Organization shall adopt the University Seal and the prescribed School Identification (I.D.) Card.
Section 3. All masteral students who will not wear the school I.D. shall be subject to fine 10.00 of which goes to the DPBE Organization fund.


ARTICLE IX - AMENDMENTS, RATIFICATION, AND EFFECTIVITY


Section 1. Amendments - This Constitution and By-Laws is or any provisions hereby may be amended, modified or replaced by a two-thirds vote of the active DPBE Members present, provided that the amendment proposed had been submitted in writing to the president and posted in the bulletin board of the school for at least two weeks prior to regular or special meeting dully called for the purposes.

Section 2. This Constitution shall take effect of on the day following its ratification and approval by the DPBE President.





Noted By:



Dr. Renato P. Ruba
Executive Dean
Ramon Magsaysay Technological University
Graduate School
Castillejos Campus
Castillejos, Zambales

Reports in Investment Management

Investment Management

Introduction

I. The 5 Questions
Why to invest?
What to invest?
Where to invest?
Where to invest?
When to invest?
How to invest?

II. Investment Management Process
Setting the Investment Objective
Establishing Investment Policy
Selecting the Portfolio Strategy
Selecting the Assets
Measuring and Evaluating Performance

III. Investment Environment
Introduction to the Investment Environment
Investment Avenues
Investment Attributes
Comparison of Investment Avenues
Investment decision Making: Approaches
Common Errors in Investment Management
Investment and Speculation
Investment Wisdom
Securities Market
The Broker

IV. Active Asset Allocation
Introduction to Asset allocation
Asset Allocation Classes
Tactical Asset allocation
Management of Asset Allocation
Asset Allocation Process
The Portfolio Upgrade
Using Futures in Asset allocation
Narach Investment Feed

V. Investment Management and Trading in the Stock Market
Estimation of the Intrinsic Value of a Stock – B. Gamboa
Margin of Safety – B. Gamboa
The Time Value of Money - Lachica
Investment Management and Inflation
Investment Management and the First Trade
Investment Management and the First Position
Stock Market Investment Rules - Bergonio
Stock Market Investment Strategies - Bergonio
Investment Management and Stock Market Simulation - Alatiit
Investment Management and Investor Preparation -Bagason
Psychology of the Successful Investor - Lachica
Qualities of the Successful Investor – S. Gamboa
Risk and Return – Bagason-
The Capital Asset Pricing Model - Bagason
The Arbitrage Pricing Theory - Bagason
Market Efficiency - Justo
E-trade and the Three-In-One Account - Bascon
National Stock Exchange India: The Nifty List - Derla
Investment Management and Mutual Funds - Solidon
Investment Management and Forex Trading - Amante
Investment management and real Estate - Alforte
Real Estate and Home Loan Secrets - Figueroa

VI. Role of Options and Futures
What are Options?
Types of Options
Option Styles, Class and series
Option Concepts
Investment World and Reflections

VII. Creating a Business Strategy
Checklist for Starting a Business
Formation of an Investment Club

Our Official Logo for our MBA organization

MBA organization known as Dynamic Professionals for Business Excellence (DPBE)
Tag Line: We make Business a Big Deal

Officers of Dynamic Professionals of Business Excellence (DPBE) for school year 2010-2011

Dynamic Professionals for Business Excellence Officers for School Year 2010-2011:

President : Marlon D. Jaranilla
Vice-President : Dante O. Alatiit
Secretary : Liezel G. Lachica
Treasurer : Jamaica F. Austria
Auditor : Arvin Hernandez
PRO’s
1. Robert M. Castro
2. Ronald V. Tactaquin
3. Rhoda N. Flores

Business Managers :
1. Iredell M. Bueno
2. Bernabe A. Gamboa

Sgt. at Arms :
1. Norvadez R. Gonzales
2. Pocholo Mangohig

Mid-Term Examination in Marketing Management

Mid-Term Examination in Marketing Management

Date Submitted: August 14, 2010

Questions:

1. Marketing Management function is one which is geared to getting the most out of people and services. To be able to do this, it requires intelligent organization, carefully delineated responsibilities, records and systems, analysis and review, with this view, cite and explain your responsibilities and functions as a marketing manager in a certain company.

2. Management deals with decisions, designed to achieve maximum results from the use of resources and thus, attain desired goals and objectives. Thinking of new ways of serving customers; marketing needs a means by which executives or management can be different and be better able to meet competition head-on. What do you think are the tools that the marketing management should impose or implement? Discuss.

3. Product Development is a phase that has to do with anticipating and meeting consumer wants and needs, but in the field of product policies, there are four (4) various factors which need to be given considerable attention and each must be dealt separately. Once this is done, these factors can be coordinated into a complete product policy determination. In your own way, discuss the four (4) factors.

Investment Management Reports

Investment Management:

I. The 5 Questions

Why to invest?
What to invest?
Where to invest?
Where to invest?
When to invest?
How to invest?

II. Investment Management Process

Setting the Investment Objective
Establishing Investment Policy
Selecting the Portfolio Strategy
Selecting the Assets
Measuring and Evaluating Performance

III. Investment Environment

Introduction to the Investment Environment
Investment Avenues
Investment Attributes
Comparison of Investment Avenues
Investment decision Making: Approaches
Common Errors in Investment Management
Investment and Speculation
Investment Wisdom
Securities Market
The Broker

IV. Active Asset Allocation

Introduction to Asset allocation
Asset Allocation Classes
Tactical Asset allocation
Management of Asset Allocation
Asset Allocation Process
The Portfolio Upgrade
Using Futures in Asset allocation
Narach Investment Feed

V. Investment Management and Trading in the Stock Market

Estimation of the Intrinsic Value of a Stock
Margin of Safety
The Time Value of Money
Investment Management and Inflation
Investment Management and the First Trade
Investment Management and the First Position
Stock Market Investment Rules
Stock Market Investment Strategies
Investment Management and Stock Market Simulation
Investment Management and Investor Preparation
Psychology of the Successful Investor
Qualities of the Successful Investor
Risk and Return
The Capital Asset Pricing Model
The Arbitrage Pricing Theory
Market Efficiency
E-trade and the Three-In-One Account
National Stock Exchange India: The Nifty List
Investment Management and Mutual Funds
Investment Management and Forex Trading
Investment management and real Estate
Real Estate and Home Loan Secrets

VI. Role of Options and Futures

What are Options?
Types of Options
Option Styles, Class and series
Option Concepts
Investment World and Reflections

VII. Creating a Business Strategy
Checklist for Starting a Business
Formation of an Investment Club

Seminar

To: MBA - Entrepreneurship Class - Ramon Magsaysay Technological University(RMTU)

We, the Master in Business Administration (MBA) students of RMTU – Castillejos Campus, pursuing advance business education is planning to hold an entrepreneurial business symposium that may help us understand and widen our knowledge and realize our objective.

In relation to this, it is our pleasure to inform you that we, in Entrepreneurship class; recognize the importance of today’s entrepreneurs in establishing, capitalizing the open market economy and helping the country realize its economic environment. The theme will focus on: “Outliving Financial Crisis thru Entrepreneurial Ingenuity”, which will be held on May 22, 2010, 2:00 pm at Coffee Shop Restaurant in Barretto, Olongapo City. This will be attended by RMTU MBA students and other interested entrepreneurs in different field of industry enrolled in the graduate school. The key insights would be very significant in the realization of our objectives, to wit:

a) Develop the key insights to be a future entrepreneur;
b) Realize the importance of entrepreneurs in today’s domestic and global economy;
c) Develop the right mindset as entrepreneur.

Outline for Film Review (HBO)

Outline for Film Review
I. Summary/Plot
II. Analysis/Critique of:
a. The Plot
b. Portrayal of the Actors/Actresses
c. Cinematography/Production/Visuals
d. Overall Presentation
III. Lesson/ Moral of the Story/Film
IV. Conclusion
V. Recommendation

Feasibility Study Guideline

Feasibility Study Guideline
I. Summary of Project
A. Name of Firm
B. Location: head office/factory
C. Brief description of the project
1. History of business
2. Nature or kind of industry
3. Type of organization
4. Officer of the business and their qualifications.
II. Economic Aspects:
A. General market description
1. Market description – a brief description of the market to include the following:
a. Areas of dispersion
b. Methods of transportation and existing rate of transportation
c. Channels of distribution and general trade practices.
2. Demand
a. Consumption for past 10 years.
b. Major consumer of the products.
c. Projected consumption for the next five years.
3. Supply
a. Supply for 10 years, classified as source-imported or locally produced. For imports, specify the form in which goods are imported, the prices, and the brand. For locally produced goods, the companies producing them, their production capacities, brands, and market shares shall be specified.
b. Factors affecting trends in past and future supply.
4. Competitive positions:
a. Selling price – includes a price study indicating the past domestic and import prices, the high and low prices within the year and the effect of seasonality, if any.

B. Marketing programs
1. Description of present marketing practices of competitors.
2. Proposed marketing program of the project describing the selling organization, the terms of sales, channels of distribution, location of sales outlets, transportation and warehousing arrangements, and their corresponding costs.
3. Promotion and advertising plans, including costs.
4. Packaging

C. Projected Sales
Expected annual volume of sales for the next five years considering the demand; supply; competitive position; and marketing program.

D. Contributions to the Philippine Economy
1. Net annual amount of dollars earned or saved, the basis used.
2. Labor employed.
3. Taxes paid.
III. Technological Feasibility

A. Products(s):
1. Description of the product(s) including specifications of their physical, mechanical, and chemical properties.
2. Uses of the product(s).

B. Manufacturing process
1. Description of the process showing detailed flow charts indicating material and energy requirements at each step, and normal duration of the process.
2. Alternative processes considered and justification for adopting said process.
3. Technological assistance used and contracts, if any.

C. Plant size and production schedule
1. Rated annual and daily capacity per shift, operating days per year, indicating factors used in determining capacity.
2. Expected production volume for the next five years considering start-up and technical factors.
D. Machinery and equipments:
1. Machines and equipment layout indicating the floor plan.
2. Specifications of the machinery and equipment required, indicating rated capacities of each piece.
3. List of machinery sand equipments to be bought and origin as to local or imported.
4. Quotations from suppliers, machinery guarantees, delivery dates, terms of payment, and other arrangements.
5. Comparative analysis of alternative machinery and equipment in terms of cost, reliability, performance, and spare parts available.

E. Plant location
1. Location map of the plant
2. Desirability of location in terms of distance from the source of raw materials and market and other factors and a comparative study of different locations, indicating advantages and disadvantages (if new project).

F. Plant Layout
- Description of plant layout, drawn to scale.

G. Building and Facilities
1. Types of building and costs of erection
2. Floor area involved.
3. Land improvements such as roads, drainage, etc., and their respective costs.

H. Raw Materials
1. Description and specifications of their physical, mechanical, and chemical properties.
2. Current and prospective costs of raw materials, terms of payment, and long-term contracts, if any.
3. Availability, continuity of supply, and current and prospective sources.
4. Material balance or material process chart.

I. Utilities
- Electricity, fuel, water, steam, and supplies indicating the uses, quantity required, availability, sources, and tentative sources and cost.

J. Waste Disposal
1. Description and quantity of waste to be disposed of.
2. Description of the waste disposal method
3. Methods used in other plants.
4. Cost of waste disposal
5. Clearance from proper authorities or compliance with legal requirements.

K. Production Cost
- Detailed breakdown of production costs, indicating the elements of cost per unit output.

L. labor requirements
- Detailed breakdown of the direct and indirect labor and supervision required for the manufacture of the product(s), indicating compensation including fringe benefits.

IV. Financial Feasibility:

A. For existing projects
1. Audited financial statements (balance sheets, income statements, cash flow) for past three years to reflect the following:
a. Aging receivables
b. Schedule of fixed assets showing the capital cost, estimated useful life, and depreciation method used.
c. Schedule of liabilities, tax assessments, and other pending claims or litigation against the applicant, if any
d. Financial trends and ratio analysis.
e. Elements of production, selling, administrative, and financial expenses.
2. Financial projections for the next five years (income statements, cash flow, balance sheets)
3. Supporting schedules to the financial projections, stating consumptions used:
a. Collection period of sales
b. Inventory levels
c. Payment period of purchases and expenses.
d. Elements of production cost, selling, administrative, and financial expenses.
4. Financial analysis to show rate of return of investment, return on equity, break-even volume, and price analysis.

B. For new products
1. Total project cost (fixed and working capital)
2. Initial capital requirements
3. Pre-operating cash flows relative to the project time table
4. Financial projections for the five years of operations to include balance sheets, income statements, and cash flows.
5. Supporting schedule to the financial projections to include:
a. Collection on sales
b. Inventory levels.
c. Payment period for purchases and expenses.
d. Elements of production cost, selling, administrative, and financial expenses.
6. Financial analysis showing return on investment, return on equity, break-even volume, and price analysis.

History of PLDT

History of PLDT:

The Philippine Long Distance Telephone Company (PLDT) was started in the Philippines on November 28, 1928. The Philippines Legislature granted PLDT the franchise to establish and be able to operate telephone services, following the merger of 4 telephone companies under a common US ownership.
It was in 1967 when General Telephone and Electronic Corporation sold PLDT to a group of Filipino businessmen. The Philippine government’s intention to integrate the Philippine telecommunications industry made way for PLDT to purchase the Republic Telephone Company in 1981.
Philippine Long Distance Telephone Company (PLDT) is the leading telecommunications provider in the Philippines. Through its three principal business groups - fixed line, wireless, and information and communication technology - PLDT offers the largest and most diversified range of telecommunications services across the Philippines’ most extensive fiber optic backbone and fixed line, cellular and satellite networks.
Now, PLDT is the leader in providing telecommunication services in the country. The company’s business can be divided into three main business areas: fixed line, wireless, and information and communication technology.
The fixed line business provides local calls, national and international long distance services, which operates around 2.1 million access lines. The wireless segment provides cellular, satellite, and VSAT services. PLDT provides cellular services through SMART, while Piltel is a reseller of SMART’s digital GSM capacity under its own branding and pricing strategy for both voice and text messaging services.
The information and communication technology provides solutions for internet applications and multimedia content delivery, with use of internet protocol-based solutions. The internet access was provided by Infocom – a subsidiary of ePLDT. And other investees of ePLDT provide e-commerce, call centers, and other IT-related services.
PLDT is listed on the Philippine Stock Exchange (PSE: TEL) and its American Depositary Shares are listed on the New York Stock Exchange (NYSE:PHI). PLDT has one of the largest market capitalizations among Philippine-listed companies.


The beginning
When PLDT was incorporated and given the franchise to establish and operate telephone services in the country on November 28, 1928, a typhoon had just ravaged Eastern Visayas, Bicol Peninsula, and Samar. The ability to communicate amongst loved ones and across the country became crucial. Sadly, phone networks then were like disconnected intercom systems and you could only call people within your own small city. Filipinos were disconnected from neighboring towns, disconnected from friends in the other island and, needless to say, disconnected from the rest of the world. It was under this scenario that the law was signed giving birth to PLDT.
What the new law hoped to achieve was to interconnect these "intercom" systems into a seamless nationwide network that would facilitate communication and delivery of services to the people, as well as spur economic development in the countryside.
The first president of PLDT was Theodore Vail Halsey while Major J.E. Hamilton Stevenot, who represented the American firm General Telephone and Electronics Corp. (GTE), was elected executive vice president and general manager.
Under the American owners of PLDT, many small phone companies in the provinces were acquired by the Company to help speed up the rollout and connection of these different phone systems all over the country. The management of PLDT was then set to lay the groundwork towards linking Filipinos to each other and, more importantly, to the world.

Manila-Baguio link
Just a year after PLDT was given its nationwide franchise, the link between Manila and Baguio was established, making the first national long distance calls possible. Overseas radio-telephone service was also established between the Philippines and the US and other parts of the world in 1933.
The first network of PLDT employed the open-wire system that was difficult to maintain and vulnerable to rain, winds, dirt, and tampering. Horse-drawn service vehicles bulky wall-mounted telephones were employed in those times. PLDT then charged a sum of P7.50 a month.
The war years in the 1940's that followed proved to be devastating to PLDT as the US armed forces destroyed the PLDT system to prevent the Japanese from using it in 1941. By the time the Americans regained control, only 10 percent of the original facilities were operational.

Filipinos take control
By 1968, a new era of PLDT leadership was ushered in; PLDT finally became a Filipino-controlled corporation when Ramon Cojuangco and his group of Filipino industrialists and businessmen bought the controlling stake of GTE of New York.
It was a symbol of national pride and a moment of triumph for Filipinos. Under Cojuangco's leadership, PLDT embarked on ambitious expansion campaigns that led to more Filipinos owning and benefiting from phones.
Several milestones were realized in Cojuangco's time. In the same year when his group came in, the first major television broadcast via the facilities of Intelsat II-F4 and PLDT was brought to the Philippines direct from the US during the funeral of Senator Robert F. Kennedy. Another milestone in satellite communications was achieved, with PLDT playing a major role, in the subsequent remote TV coverage of the Apollo 8 flight.

Early landline innovations
By 1982, direct distance dialing or DDD was becoming a byword for Filipinos. Subscribers then could call long distance to nine major cities across the nation and 22 countries around the world and reach through direct dialing more than 400 million telephones overseas. This service eventually evolved into National Direct Dialing (NDD) and International Direct Dialing (IDD) by 1985.
PLDT's ascent to greater heights of success was punctuated briefly by the death of Cojuangco in 1984. Cojuangco, who was largely responsible for the transformation of the Company from a medium-sized firm into a multi-billion-peso giant, was highly regarded by PLDT employees and considered very compassionate.
It was then that Oscar T. Africa was elected as the new president while Cojuangco's son, Antonio, was elected Senior Executive Vice President. Africa, however, retired after only two years as president. Antonio Cojuangco succeeded him in 1986, ushering in a 12-year period of further expansion and robust business for PLDT.
Wireless enters the scene, more innovations happen
Another significant PLDT milestone was the establishment of the country's first cellular telephone network in 1987. Cellular phones then were bulky and installed only in cars.
With this new service, people were able to communicate while on the go. Coverage, just like with the mobile radio-telephone service introduced in 1959, was wider, though still limited compared today. Subscribers then could make calls within Metro Manila and any place from Cavite to Baguio.
A slew of new services were also introduced beginning 1992, through a partnership with American Telephone and Telegraph Co. (AT&T). PLDT introduced the USA Direct Roving Van Service, a mobile van equipped with cellular phones, to provide toll service to some previously unservedPage | 5 rural communities.
Other services introduced were USA Direct Mabuhay (dial access code 105-12) and Fibernet, a point-to-point international digital leased line service capable of handling simultaneous voice and data transmissions using fiber optic cables.
Intelligent pay phones, which can accept coins of several denominations, were introduced. The Fonkard also came into vogue. Fonkard allowed the caller to make direct-dial national and international long distance calls through the use of prepaid magnetic telephone cards instead of coins.
Innovations beyond voice
A significant milestone that changed the face of communication was the successful launching of Agila II, the country's first communications satellite, in 1997 by PLDT subsidiary Mabuhay Philippines Satellite Corp. The satellite serves the needs of customers not only in the Philippines but also other countries within the satellite's footprint in the Asia Pacific region.
With the increasing importance of the Internet, PLDT signed a network deal with US-based software giant Oracle Corp. to jointly advance the development of a network computing infrastructure in the Philippines dubbed Phil-Net. A milestone for PLDT and the development of the Internet in the Philippines would be the establishment of the country's first Internet hub called the Philippine Internet Exchange or PhIX.

Innovating Management: First Pacific entry
The late '90's was a time of formidable challenges for PLDT, especially after the 1997 Asian financial crisis. Inauspicious as it may seem at the time, however, Manuel V. Pangilinan of Hong Kong-based First Pacific Co. Ltd. saw a great opportunity in taking control of PLDT.
So on Nov. 24, 1998, just four days before the company's anniversary, PLDT announced the entry of First Pacific which acquired a 17.5-percent stake in PLDT for approximately P29.7 billion or some $749 million at that time. The entry of First Pacific brought in a new culture in PLDT and new enterprise. Manuel V. Pangilinan replaced Antonio O. Cojuangco as president and chief executive officer. Cojuangco then assumed the position of chairman of the board.
The following year, PLDT forged a strategic partnership with NTT Communications Corp (NTTCom), a wholly-owned subsidiary of Nippon Telegraph and Telephone Corp. of Japan, the world's leading telecommunications company in terms of revenues. Smart Communications, Inc. (Smart), the country's largest mobile phone operator, was also acquired by PLDT.
The acquisition of Smart proved to be a wise decision, especially now that Smart is contributing greatly to PLDT's bottom line, thus buffering the telecoms giant from the debilitating effects of declining revenues from the fixed line business.

Investing in ICT
One of the key steps undertaken in 2000 was the formation of ePLDT, the PLDT Group's principal vehicle for investments in information and communication technology.
Through its data services under the Vitro brand, its call centers under ePLDT Ventus Inc., Internet services through Infocom Technologies Inc., data security services through mySecureSign Inc., and Internet cafe business through Netopia Technologies Inc., the PLDT Group is now slowly reaping the fruits of its investments.
Innovating the landline
Brains--an acronym for Broad and Robust ATM (asynchronous transfer mode) and Internet Networking Solutions--was launched in 2000 and made PLDT the only telecommunications company with the fastest, most reliable and cost-efficient voice, data and video transmission services running through a single multi service network.
DSL, or digital subscriber line, was also introduced in the same year. It is a broadband access technology that allows for high-speed access to the Internet via the usual copper wire lines.
Other innovative services were introduced: Text 135, the country's first landline texting service; Premium Phone Services (1-908), which employed strategic tie-ups with TV game shows; Budget card for international calls; and bundling of value-added phone services such as Call Waiting, Call Forwarding, 3-party conference calls, Speed Calling, and Caller ID.
When the year 2002 came, PLDT continued to innovate and introduced a pioneering prepaid landline service where subscribers can load up their phones with P500-load that is valid for two months and with a one-month reprieve to reload.
In 2004, the PLDT Board of Directors appointed Manuel V. Pangilinan to the position of Chairman of the Board while retaining his post as Chairman of the Board of Smart and ePLDT. Napoleon L. Nazareno is the concurrent President and CEO of PLDT and Smart.

Next Generation Network
As PLDT's products and services continued to evolve, the Company began upgrading its network in 2005 to the Next Generation Network, a broad term for certain emerging computer network architectures and technologies that can encompass voice, data and video where all information is efficiently transmitted via digital packets of data just like over the Internet.
This means greater efficiency, cost savings and more innovative services for subscribers in the years to come.
NGN is not the goal in itself but rather a key enabler for transformation to what the PLDT Group calls Next Generation Communications. This transformation goes beyond upgrading the network to an all-IP NGN. It also involves re-engineering processes, integrating our platforms, transforming products and re-orienting people.
In 2006, PLDT saw the rapid growth of its broadband business on the back of the Group's wired and wireless infrastructures. PLDT MyDSL and SmartBro broadband subscribers more than doubled to 265,000 by year end.
In late 2006 and early 2007, MediaQuestHoldings - a wholly-owned subsidiary of the PLDT Beneficial Trust Fund - and Smart joined hands to conduct test broadcasts of a mobile TV service using the Digital Video Broadcast - Hand held (DVB-H) standard. This was made possible through MediaQuest's subsidiary, Nation Broadcasting Corp., which operates a network of radio and TV stations.

Culture of Innovation
It's all part of PLDT's culture of innovation to bring its operations to world-class standards and become the best telecommunications company in the region. Today, PLDT leads the wireless race, dominates the landline domain, operates the premiere satellite company, and has raced to the #1 position in the Internet world, both broadband and narrow band. No doubt, PLDT is set to conquer whatever the future holds for the telecommunications industry.
Notwithstanding the many technological changes that PLDT will encounter in the future, one thing will remain steadfast - its commitment to serving the nation and providing communications solutions to Filipinos.

Case No. 18 Bose Corporation-Final Exam in Logistics

Case No.18: Bose Corporation: The JIT II Program (A)

I. Case Background:
Bose Corporation was founded in 1964 by. Dr. Amar Bose, a professor of Electrical Engineering and Computer Science at the Massachusetts Institute of Technology, where Sherwin Greenblatt and Hose shared a love of music, but recognized that the high fidelity (hi-fi) products then available did not accurately reproduce sound Greenblatt become Bose Corporation’s first employee, the two planned to built a company based on innovations in acoustics and electronics. For three years, virtually all the company’s revenues were earned by developing portable battery operated equipment, hi-fi was considered “the hobby side of the business”. In 1968, however, Bose Corporation launched the 901 speaker, which incorporated proprietary Direct/Reflecting technology, simulating the feeling of live sound by radiating sound waves to the listener directly and via reflections off walls, ceilings, and doors. This speaker was a huge success, landed by a growing market of audio enthusiasts. Two years later Bose introduced the 501 speaker, which also had Direct/Reflecting technology but was half the size of the 901 speaker. In 1973, Bose introduced the 301 speaker, which produced true hi-fi sound but could fit on a bookshelf.
During the 1970’s, sales of Bose speakers grew rapidly, and Bose executives approached the Delco division of General Motors with a proposal to develop a car stereo that would produce exceptional sound. The Cadillac Seville first offered an option for a Delco-Bose sound system in 1982, by 1990 sound systems were available in cars made by General Motors, Honda, Acura, Audi, and Nissan.

Bose Strategy:

In 1990, Bose was privately held, with revenues estimated at $720 million. Amar Bose was chairman of the company, and Sherwin Greenblatt was president. Approximately one-third of the company’s sales were in Japan, one-third in Europe, and one-third in the United States. The company’s motto was “Better Sound through Research,” and Bose Corporation was widely considered the world’s largest manufacturer of component quality speakers.
The company’s mission, to “provide outstanding sound experience to everyone in the whole world”, was manifested in three aspects of the company’s strategy. First, the company constantly sought new markets around the world and had exceptional perseverance in opening markets. For example, Bose entered Japan in 1970 and weathered substantial losses as it tried to establish the Bose brand name among Japanese consumers. The company received its first order from the Japanese car manufacturer of component-quality stereo speakers in Japan (as well as in Holland, France, Australia, and other countries). Management at Bose believed that the desire for good sound was universal, and planned to continue opening new markets around the world.
Second, Bose Corporation sought broader channels of distribution. Originally, Bose speakers were sold exclusively in high-end specialty stores that served audio enthusiasts. Throughout the 1980’s, Bose added new channels, including electronics retailers including Lechmere, Circuit City, Sears, and Montgomery Ward. Also, Bose began to sell some products by direct marketing.
Third, the company produced systems as well as components. In the early days, true high-fidelity sound had been available only to consumers willing to invest time, money, and patience in their stereo systems. By 1991, consumers expected hassle-free sound and the market for integrated audio-systems and portable audio equipment grown to be more than twice as large as the market for separate audio components. Analysis expected the trend toward integrated systems to continue, driven by advances such as home theatre television, which linked big-screen video with surround-sound audio, or “plug and play” equipment, which required minimal setup by the consumer. In 1989, after 14 years of development, Bose had introduced the Acoustic Wave Music system incorporating speakers, an AM/FM receiver, and a cassette tape deck. The product was oriented towards the high end of the portable audio market.

Manufacturing at Bose:

It was well-recognized that speakers were among the most important parts of any audio system-if they were of poor quality, even the best sound systems would not produce high-quality sound. Speakers were judged on their ability to reproduce sound accurately, and sound reproduction depended on speaker design, the quality of materials used in construction, and careful attention to detail in production processes. Speakers were one of the most competitive segments of the audio business, with dozens of manufacturers in the United States, Europe, and Far East producing a diverse array of designs and technologies. Three subassemblies were the critical components of all speakers:
• Transducer
• Electronics
• The cabinet- the speaker’s exterior, the cabinet had to both direct sound waves from the speaker and be attractive in a home or car.
Bose headquarters were located 23 miles west of Boston in Framingham, Massachusetts. The company had three manufacturing facilities:
• Westboro, Massachusetts
• Ste-Marie, Quebec
• Carrick-Macross, Ireland
Due to the company’s rapid growth, two other manufacturing facilities were planned:
• Hillsdale, Michigan
• San Luis, Mexico
In addition, the increasing success in the Japanese market caused some managers to wonder whether a manufacturing facility would soon become necessary in or near Japan.
Corporate Procurement:
In 1990, Corporate Procurement at Bose purchased materials totalling $300 million. Corporate Procurement was headed by Lance Dixon, director of Purchasing and Logistics. Dixon reported to Tom Beeson, vice-president of Manufacturing.
The Corporate Procurement was responsible for locating new vendors and sourcing new parts. Vendors were typically involved early on in new product development efforts.
In 1990, four types of personnel were typically involved in the procurement process:
• Design engineer
• Materials planner
• Buyer
• Vendor salesperson
The new products group, who monitored the supplier base to find technologies and components, were at the heart of corporate procurement. Engineers developing new products relied on them to find components that could meet design, performance, and cost standards. New products also provided a conduit to incorporate vendor input in products under development.
Purchasing at Westboro:
Until 1988, no purchasing had been done by the plants, instead, all items had been purchased by corporate procurement but delivered to the plants. By 1990, purchasing at Bose Corporation was more decentralized. The plants in Westboro, Canada, and Ireland did their own day to day purchasing, typically against contracts negotiated centrally. It was expected that the planned facility in Michigan would also manage its incoming material flow.
Westboro spent about $140 million per year on items purchased from an active base of about 200 vendors. About 50% of the plant’s purchasing dollars were spent in five categories: electronic components, plastics, printing, corrugated boxes/packaging, and cables/cords. Purchasing was planned in a three-stage cycle:
Stage I: Business Planning
Stage II: Aggregate production planning
Stage III: Production scheduling
Westboro buyers preferred vendors who maintained a secure financial position, were located close to Westboro, could provide fast delivery, maintained consistent production processes, and provide good references through corporate procurement or other customers. The average lead time on purchase orders placed by Bose Corporation was four to six weeks, but one third of all purchase orders had less than 10 days lead time. About 35% of all orders were changed within 30 days after placement.

The Evolution of JIT II

In the early 1980’s, shortly after he had been hired by Bose, Lance Dixon requested that Corporate Procurement’s budget be increased significantly to add more experienced buyers, upgrade the department’s information systems, and develop global sourcing programs. Dixon promised a one-year payback on the funds requested, but his request was turned down because company resources were focused on efforts in Japan. As the company grew, Dixon found that every year he needed more people in procurement, and every year at budget time he fought with management over staffing levels.
Dixon and Joe Giordano, vice-president for Finance, developed an alternative solution put purchasing its “profit center mode”. Wherever Dixon could drive expenses below standard costs, he would be allowed to reinvest half the savings back into the department’s budget. If Dixon did not generate any savings, Corporate Procurement would maintain a level budget. As Dixon said, “I can get the people I need to do the job and not add anything to the payroll.”
Dixon also instituted a program to pay cash incentives to buyers. Anytime buyer saved the company money on purchased items, the buyer received a cash reward, typically $100 to $300. This arrangement was patterned after incentive programs commonly found in sales departments. Awards were given for keeping monthly expenditures under standard cost, for unique ideas that led to cost savings, and for other exceptional efforts.
In 1990, Dixon proposed to change the relationship between Bose and certain vendors under a program he called “JIT II.” Under JIT II, a vendor representative (the “rep”) would replace the vendor salesperson, the Bose buyer, and the Bose materials planner and would be authorized to decide what, when, and how much to order for a particular range of products or services. Reps would determine order quantities, placing orders to their companies supply Bose without Bose carrying unnecessary inventory. Reps would also provide engineering expertise in their commodity area and help solve problems on the production floor, much as a Bose facility and would. The reps would be stationed full-time at a Bose facility and would be empowered to use the Bose computer systems, but would be hired, evaluated, and paid by the vendor.
Dixon had recommended the commodity areas of plastics and printing as initial candidates for the JIT II program. Plastics in 1991, Bose Corporation expected to spend close to $14 million on purchases of plastic components. Producing plastics to meet Bose quality standards required considerable experience and skill. Bose used 10 vendors for plastics, the top five vendors received 6% of the dollar volume Dixon recommended G&F Industries to be a JIT II vendor in plastics.
G&F’s headquarters and plant were located in Sturbridge, Massachusetts. about 40 miles west of Bose headquarters. The company employed about 60 people and had total annual revenues of $12 million. Of G&F’s 50 active customers, Bose was the largest account, providing about $2.1 million in annual revenues. The plastics components sold to Bose typically generated 10% before tax profit margin. G&F was owned by John Argitis, who served as president and CEO. Argitis had 15 years experience molding plastics parts at American Optical in 1978 he moved to G&F as vice-president, and in 1986 he purchased the company.
G&F specialized in the production of injection molded plastic parts. In injection molding, pellets of plastics resin were heated to liquid state; the liquid was then injected into a mold where it solidified in the shape of the mold’s interior. A typical injection of molding machine cost up to $200,000, molds to $75,000- $150,000. Molds were made to produce a part of a specific size and shape, although minor alterations were possible. Molds were typically paid for and owned by the customer.
On any particular job, set-up costs of injection molding could often be greater than the cost of machine operations. Set-up timers averaged four hours to change resin colors (keeping the same resin materials), six hours to change molds, and 17 hours to change molds, colors, and resin materials. The set-ups were performed by highly skilled technician who were supervised by plastics engineers, after set-up, machine operation required less skill.
Even if G&F became the JIT II vendor for plastics, if was not clear that G&F would supply all the Bose plants. The facilities planned in Michigan and Mexico would use considerable volumes of plastics, particularly in speaker enclosures for Michigan. The two facilities could either source locally, or use parts that were purchased by Corporate Procurement but shipped directly to the plants.

Plants Materials:

Printed materials included items such as instruction booklets, warranty cards, and promotional materials. In 1990, each Bose department sourced its own printed materials, with 12 vendors supplying printed materials to Bose Corporation. Dixon was concerned that the current decentralized arrangement allowed vendors to charge each manager different price according to that manager’s price sensitivity, and wished to established United Printing as a JIT II vendor, United received only 12% of the company’s overall printing business in 1990, so this would necessitate centralizing the procurement of printed materials. Dixon was concerned that the individual departments might object.
The Management of JIT II:
Neither Beeson nor Dixon was sure that vendors would be interested in participating in JIT II. A qualified rep might cost the vendor $80,000 per year (fully loaded). Dixon and Beeson planned to approach United after they knew whether G&F would participate.
Even if G&F did agree to participate, several issues remained to be resolved. Dixon felt that vendor representatives should be treated, in every respect, as Bose employees- to be listed in Bose telephone directories and have access to all Bose facilities, people, and computer systems. However, several Bose managers had voiced concerns about this arrangement. Some buyers felt that certain information, such as quantities and prices of parts bought from other vendors, should remain confidential-at least to provide an advantage during negotiations.
In the past, vendor’s representatives had typically worn badges that identified them as vendors, and were permitted access only to approved locations within Bose facilities. Dixon proposed changing the policy, he advocated that the reps for BIT II vendors are issued badges just like Bose employees and be free to come and go as they close.
There was also debate about how to ensure that vendors supplied goods at fair prices over the course relationship. Dixon felt that the company’s previous purchases in a given category provided experience to evaluate vendor prices, but others argued that inflation or changes in raw material prices could quickly render this information obsolete. Finally, although Dixon wished to start the program with G&F and United; formal criteria for determining when and with whom to establish JIT II relationships had not been developed.
Finally, there were questions how long a JIT II relationship would last in a company growing as rapidly as Bose. As Tom Beeson said: “There’s always a conflict between purchasing and manufacturing, Lance wants to buy everything and I want to make everything. However, I don’t want vendors assuming responsibility for what we should be doing ourselves. Does the JIT II program facilitate the process of moving into self-control or does it delay that process?”

Midterm Exam in Logistics - Case No. 6

Case #6
Michigan Liquor Control Commission


I. Case Background:

On a Friday afternoon in October 2000, Joseph Duncan, a third-year distribution systems analyst for the Michigan Department of Commerce, was sitting at his office desk reading through some background material on distilled liquor distribution in Michigan. Prior to his current position, Joseph had worked as a distribution analyst in private industry for several years after graduating from a large midwestern university with a degree in materials and logistics management. His direct supervisor, Donna Mills, had given Joseph his next assignment earlier that day. “Be prepared to head up a project team and prepare a proposal on distilled liquor distribution,” Donna said, “We’ll meet Wednesday afternoon at 2:00 P.M. to lay out an initial plan.” This was Joseph’s first “lead” project assignment, and although he was unfamiliar with the topic, he was excited about the opportunity to demonstrate his ability. He placed the background material in his briefcase and decided to reexamine it at home over the upcoming weekend.
History of Michigan Liquor Distribution System
In the early 1900s, brewers in Detroit were the dominant force in the state due to efficiencies of size, new bottling technology, and local “option laws,” which restricted or outlawed in-county production. This created a sharp division between outstate and Detroit brewers and prevented the formation of a strong state liquor association. Prohibition forces also benefited from this divisiveness; by the year 1917, Michigan had 45 dry counties. Michigan enacted a statewide prohibition on liquor in May 1918, approximately 18 months prior to passage of federal Prohibition (the 18th Amendment). By the late 1920s and early 1930s, significant pressure existed throughout the country to repeal Prohibition. In early 1933, Congress passed a bill authorizing 3.2 percent beer. In the same year, a similar bill was considered in Michigan and along with it, the introduction of a state board which came to be known as the Michigan Liquor Control Commission (MLCC). In April 1933, Michigan became the first state to ratify the repeal of federal prohibition and the present-day liquor distribution system was designed and put into place.

A bill for beer and wine (defined legally as under 21 percent alcohol by volume) was passed that allowed distribution from brewers and wineries to private wholesalers who then resell to retailers. However, all distilled “spirits” (defined legally as over 21 percent alcohol by volume) were to be purchased by the State of Michigan. Michigan “come-to-rest” laws required that any distilled liquor moving through or stored in state bailment warehouses must be handled by state employees. Package liquor sales were allowed through any hotel or established merchant. Many of the merchants were druggists who also had the right to dispense “medicinal” liquors as well as valid medical prescriptions. A local option was also set up to provide for on-premise consumption.

The State of Michigan’s decision in 1933 to exercise public, rather than private control over distilled liquor distribution was due to a variety of reasons. First, Michigan’s geographical proximity to Canada made politicians familiar with Ontario’s system of monopoly control. Second, there was a strong influence of “dry” sentiment and a fear of bootlegging, which was common during Prohibition years. Third, druggists exerted considerable political influence at the time and were positioned to benefit from state control. Finally, the state believed government control would protect the public from middleman profiteering and excessively high private enterprise pricing.

Currently, Michigan is one of 18 states in the United States that completely controls the wholesale distribution of distilled liquor between distillers and retail licensees. The remaining 32 states utilize an “open” private license system in which the state government is not involved in wholesale distribution at all.

In 1993, Michigan and many other states throughout the country faced the problem of rapidly increasing costs of government services and strong citizen resistance to any tax increases to provide those services. Unlike nearly all other Michigan government functions, the control and distribution of liquor generates a considerable general revenue contribution for the state. Distilled liquor tax contributions go directly to the General Fund in the Executive Budget for running the State of Michigan. At present, taxes of 11.85 percent are assessed on the full price of liquor as follows: 4 percent for excise taxes, 6 percent for a Michigan school-aid fund, and 1.85 percent on packaged liquor.

Public sensitivity toward liquor as a social issue and its ability to provide the state with significant revenue make liquor control a high-profile government activity. Under a recent directive from the governor, all state functions must be examined to determine how state government efficiency could be improved. Despite the contribution of current operations, considerable room for improvement appears to exist. For example, even in light of technological improvements and the addition of more modern facilities, the cost of liquor distribution has continued to increase. Specifically, administrative cost as a percentage of sales has risen 121 percent over the past 11 years, while the number of inventory turns has decreased from 6.7 to 5.5.


The Liquor Distribution Process

Distilled liquor distribution in the State of Michigan during the fiscal year 2000-2001 involved the shipment of 6.97 million cases of liquor to retail markets, and generated $515.0 million in revenue for the state. After purchase costs and operating expenses, the net contribution to the state came to $61.5 million. The state also realizes roughly $50 million per year from taxes on distilled liquor.

Contributions from the sale of distilled liquor are generated in the following manner: the state buys liquor directly from a distiller at a delivered price of, for example, $10.00 per bottle. Then, the state factors in transportation and other costs and marks up the $10.00 bottle a state mandated 51 percent to $15.10. Retailers buy liquor from the state at a 17 percent discount off the “markup” price, and in this example would pay a wholesale price of $12.53. Thus, the state markup (51 percent) and retail gross profit margin (17 percent) are fixed by Michigan law. The net result is that consumers pay the same retail price for distilled liquor everywhere throughout the state. The state-imposed taxes of 11.85 percent are assessed on the $15.10 price and collected by the retailer upon sale to consumers.

Any alteration of Michigan liquor distribution must consider potential effects on liquor prices at the retail level. In terms of consumer purchase behavior, liquor quantity is generally price inelastic. The price elasticity of liquor sales with respect to total expenditures is, however, fairly elastic. These conditions imply that as prices are raised, consumers will generally purchase the same quantity of liquor but will shift their consumption to cheaper brands. This shift reduces projected consumer expenditures and tax revenues. If system changes require that prices be raised, the effect on tax revenues could be detrimental.

Currently, distilled liquor is distributed through a two-tier network consisting of three state-owned-and-operated warehouses, 75 smaller second-tier state warehouses (known as “state stores”), which function as wholesale outlets, and 12,000 retail licensees serving the consuming public throughout the state (see Figure 1). Licensees are divided into two categories of approximately 6,000 members each: (1) on-premise bars, restaurants, and hotels that serve liquor by the glass and (2) off-premise package liquor dealers/stores. The package liquor dealers represent a wide variety of businesses, ranging from traditional liquor or party stores to large retail grocery superstores like Meijer, Inc. The first 600 retail licensee outlets were authorized in 1934 and have steadily increased to their current level. The number of state stores has remained fairly constant over the years and most of the original 75 stores are still in their original cities.

The cost to operate the current distribution network is approximately $20 million per year. Average distilled liquor inventory within the 75 second-tier warehouses is $25 million. Inventory carrying cost is assumed to be 15 percent and is considered a conservative estimate compared to figures used in private industry liquor analysis.

Distillers ship their products to the three state-owned-and-operated warehouses based on state-suggested shipping quantities. The distillers are charged a handling fee for storage of their product because the State of Michigan does not take title to the liquor until it has been shipped from the three warehouses to one of the state stores. The process of title transfer in the system is essentially a consignment arrangement. Under consignment, a product is sent to a sales agent (in this case, the State of Michigan) for sale or safe-keeping. From the State of Michigan’s perspective, the consignment arrangement reduces inventory ownership risk and inventory carrying costs because the state does not take title until retail licensee demand is established. This operational arrangement was implemented several years ago; however, distillers circumvented the state’s fiscal efforts by sufficiently raising prices to cover their increased storage costs. No direct shipments are made from the three state-owned-and-operated warehouses to retail licensees. Transhipment among the three state-owned-and-operated warehouses and the state stores is minimal. Licensees place their orders weekly through a centralized order processing system and may either pick up an order in person or have it delivered by common carrier. The only exception to this delivery system occurs in the Detroit metropolitan area, where state delivery service is mandated from the largest state store to all its retail licensees.

Geographically, Michigan’s liquor distribution network is broken down into three operating districts. Figure 2 illustrates the districts which each contain one of the major state-owned-and-operated warehouses. The Lincoln Park warehouse serves the Detroit area (District 1); the Lansing warehouse serves the western and central portion of the state (District 2); and the Escanaba warehouse serves the northern portion, or Upper Peninsula, of the state (District 3). District population, case liquor sales, and facility costs are shown in Table 1.

While the state does not directly pay the cost of inbound freight from distillers, research indicates that the cost is approximately $1.00 per case. Transfer freight is defined as freight movements from and between the three state-owned-and-operated warehouses to the 75 state stores. Customer freight is defined as freight movements between state stores and a retail licensee. Transfer and custom freight charges are listed in Table 2.
Current Issues
Redesigning the liquor control system in Michigan is not a new idea. Lawrence Desmond, business manager for the MLCC, says “When you talk about the liquor commission you’re really talking about two distinct aspects. One is a regulatory agency that enforces the state’s liquor laws. The other is the fact that we’re the state’s sole wholesaler of spirits, and along with our licensing process, we directly contribute to the state’s general fund.” The subject of system redesign has been raised numerous times for a variety of reasons, and many powerful economic and political special interest groups have strong opinions on the two issues of liquor enforcement and sales and licensing.

Liquor enforcement is a highly sensitive social issue. From 1992–2000, nationwide per capita consumption of distilled liquor declined about 3 percent per year. Michigan sales figures mirror the national trend (see Figure 3). Increased public awareness of alcohol abuse has been heightened through the efforts of the distillers and brewers, government agencies, and groups such as Mothers Against Drunk Driving (MADD). Anti-alcohol groups such as MADD argue that the state’s highly controlled system contributes to strong enforcements of liquor violations, and thereby acts as a deterrent to alcohol abuse. “Alcohol is a problem-causing narcotic drug, and we need to retain as much control as possible,” says Reverend Allen West of the Michigan Council on Alcohol Abuse and Problems.

The chairperson and the five commissioners of the MLCC are appointed by the governor of Michigan. Given the nature of the political process, the MLCC and its licensing procedures have historically been subject to frequent charges of political patronage, graft, and corruption by whichever political party is out of power in the state legislature. The MLCC employs approximately 620 people and a considerable number of the positions are well-paying, low-skill jobs. Although the population of Michigan is concentrated in the lower third of the state, many of the MLCC positions are located in geographically remote areas where it is unlikely that employees would be able to secure similar, private sector jobs if system redesign eliminated their positions. Also, approximately 500 MLCC employees are represented by United Auto Workers local unions. Teamsters Union delivery firms with long-term contracts for hauling liquor also exist, especially in the Detroit metropolitan area.

A number of state budget analysts and legislators, as well as academic and professional consultants, believe that the state liquor distribution system is considerably less efficient than private industry. They argue that, for example, mandated state delivery contracts and state employees with little job performance incentive hinder productivity improvement.

Lower volume retail licensees fear that redesigning the current system may hinder their ability to purchase small quantities of liquor, particularly if minimum order sizes or delivery freight breaks are instituted. They believe that changing the current setup will severely disadvantage them relative to larger, high-volume chains and retailers. Jerry Faust, spokesperson for a state organization representing retailers says, “If the system ain’t broke, don’t fix it.” Many consumer advocates argue that the current distribution system of state-set, single pricing at all retail outlets provides consumers with an economically equitable system.

Challenges of System Redesign

Before leaving the office, Joseph outlined two general objectives of distribution network redesign: (1) increase the state’s return from liquor distribution by reducing distribution costs and inefficiencies and (2) improve inventory management by utilizing Management Information Systems (MIS) to further increase efficiency. He also identified four specific objectives: (1) maintain the current service level; (2) increase inventory turns; (3) decrease administrative costs; and (4) maintain the current level of control over a highly sensitive socioeconomic policy area.
Joseph realized he would need to contact a variety of people upon his return to work on Monday in preparation for Wednesday’s meeting. He sketched out plans to meet with representative MLCC staff and operations personnel, MIS staff, external industry experts in liquor and custom delivery operations, and academics in marketing and logistics at the nearby state university.

Joseph decided that any changes in distilled liquor distribution would have to reflect key operational issues of pricing, service level, projected retail sales and tax impact, direct delivery from distillers to major chain warehouses, and delivery cost considerations—not to mention a host of economic and political special interest group concerns. He began to realize that the topic of liquor distribution in Michigan was a much more complex issue than it had seemed a few hours earlier.

Questions:

1. What alternative designs for distilled liquor distribution in Michigan might be considered? Explain the rationale for your suggestions.
2. Discuss the benefits and risks of alternative designs for distilled liquor distribution.
3. Are the historical conditions which the current liquor distribution system is based upon still important today? What, if any, other factors exist that require consideration?
4. Does an inherent social conflict exist when state governments rely upon tax contributions from liquor sales to fund educational programs?
5. How would you organize the final report on distilled liquor distribution in Michigan if you were Joseph Duncan?

Happy New Year Classmate:)!!!