1 The Sentinel Company （TSC) offers a range of door－to－door express delivery services. The

1 The Sentinel Company (TSC) offers a range of door-to-door express delivery services. The company operates using a

network of depots and distribution centres throughout the country of Nickland. The following information is available:

(1) Each depot is solely responsible for all customers within a specified area. It collects goods from customers within

its own area for delivery both within the specific area covered by the depot and elsewhere in Nickland.

(2) Collections made by a depot for delivery outside its own area are forwarded to the depots from which the

deliveries will be made to the customers.

(3) Each depot must therefore integrate its deliveries to customers to include:

(i) goods that it has collected within its own area; and

(ii) goods that are transferred to it from depots within other areas for delivery to customers in its area.

(4) Each depot earns revenue based on the invoiced value of all consignments collected from customers in its area,

regardless of the location of the ultimate distribution depot.

(5) Depot costs comprise all of its own operating costs plus an allocated share of all company costs including

centralised administration services and distribution centre costs.

(6) Bonuses for the management team and all employees at each depot are payable quarterly. The bonus is based

on the achievement of a series of target values by each depot.

(7) Internal benchmarking is used at TSC in order to provide sets of absolute standards that all depots are expected

to attain.

(8) (a) The Appendix shows the target values and the actual values achieved for each of a sample group of four

depots situated in Donatellotown (D), Leonardotown (L), Michaelangelotown (M), and Raphaeltown (R).

(b) The target values focus on three areas:

(i) depot revenue and profitability;

(ii) customer care and service delivery; and

(iii) credit control and administrative efficiency.

(c) The bonus is based on a points system, which is also used as a guide to the operational effectiveness at

each depot. One point is allocated where the target value for each item in the Appendix is either achieved

or exceeded, and a zero score where the target is not achieved.

Note: TSC operates all year round.

4

Required:

(a) Prepare a report for the directors of TSC which:

(i) contains a summary table which shows the points gained (or forfeited) by each depot. The points table

should facilitate the ranking of each depot against the others for each of the 12 measures provided in

the Appendix. (9 marks)