Choosing Cost-Reduction Initiatives. The Springcrest case studyprovides the opportunity to explore possible solutions thatillustrate sound fiscal management, and systemic improvements andchoosing cost reduction initiatives.
The Situation:
Springcrest is in a precarious financial position, runningfinancial deficits the past year and a deficit projected for nextyear. Below are several cost-reduction options to adopt with thegoal of reducing the deficit.
Have all employees take a day off without pay.
Reduce all salaries by 5%.
Renegotiate contracts for equipment asking for morecost-savings.
Renegotiate interest rates on the existing mortgage withNeighborhood bank.
Renegotiate maintenance and lease contracts.
Increase employeesâ share of health care insurance premiums.
Require employees to pay for health care insurance fordependents.
Reduce the employee benefit expense by replacing apre-established number of full time employees with part-time(without benefits) employees.
reports your analysis of the Springcrest situation. Be sure tocomplete each of the following items:
Rank your cost-reduction choices in order by the magnitude withwhich they will impact Springcrestâs bottom line, from largest tosmallest.
Discuss specific details the rationale for your prioritizationchoices.
Develop an implementation plan for the top three Initiatives youchose. Describe in detail the following:
What is the financial impact of your top three choices:Specifically, how much money would Springcrest save by implementingthese cost-reduction choices?
How you would approach this implementation plan within theorganization?
Who would you involve in the process?
Choosing Cost-Reduction Initiatives. The Springcrest case studyprovides the opportunity to explore possible solutions thatillustrate sound fiscal management, and systemic improvements andchoosing cost reduction initiatives.
The Situation:
Springcrest is in a precarious financial position, runningfinancial deficits the past year and a deficit projected for nextyear. Below are several cost-reduction options to adopt with thegoal of reducing the deficit.
Have all employees take a day off without pay.
Reduce all salaries by 5%.
Renegotiate contracts for equipment asking for morecost-savings.
Renegotiate interest rates on the existing mortgage withNeighborhood bank.
Renegotiate maintenance and lease contracts.
Increase employeesâ share of health care insurance premiums.
Require employees to pay for health care insurance fordependents.
Reduce the employee benefit expense by replacing apre-established number of full time employees with part-time(without benefits) employees.
reports your analysis of the Springcrest situation. Be sure tocomplete each of the following items:
Rank your cost-reduction choices in order by the magnitude withwhich they will impact Springcrestâs bottom line, from largest tosmallest.
Discuss specific details the rationale for your prioritizationchoices.
Develop an implementation plan for the top three Initiatives youchose. Describe in detail the following:
What is the financial impact of your top three choices:Specifically, how much money would Springcrest save by implementingthese cost-reduction choices?
How you would approach this implementation plan within theorganization?
Who would you involve in the process?
