Customer profitability measurement in a not-for-profit organization

The objective of this study was to find out the factors that affect customer profitability in the not-for-profit case company. The customer profitability was examined in two different segments of the customer base. The effects that price, cost and the amount of services provided have on the profit margin were studied. The distribution of profitability among the customers and the effect of certain characteristics, such as size of the customer measured in services purchased, on the profitability were analyzed. The theoretical framework was built around customer profitability and the use of customer profitability information in a not-for-profit organization. The present use of customer profitability information and the possibilities of using the results of this research in the case company were presented. Quantitative research methods were used in the empirical part of the study. The results indicate that the two customer segments have differences in their buying behaviors which affect the profitability and thus the measures taken to improve the profitability should be considered with the different characteristics of the customers in mind. Finally the limitations of the study were discussed as possible further research topics.

Accounting for competition, governance and accountability during institutional change in not-for-profit and public sector organisations

Purpose The aim of this thesis1 is to analyse theoretically how institutionalisation of competitive tendering2, governance and budgetary policies cannot be taken for granted to lead to accountability among institutional actors3. The nature of an institutionalised management accounting policy, its relevance as a source of power in organisational decision making, and in negotiating inter-organisational relationships, are also analysed. Practical motivation The practical motivation of the thesis is to show how practitioners and policy makers can institutionalise changes which improve the power of management accounting and control systems4 as a mechanism of accountability among institutional actors and in negotiating relationships with other organisations. Theoretical motivation and conceptual approach The theoretical motivation of the thesis is to extend the institutional framework of management accounting change proposed by Burns and Scapens (2000) by using the theories of critical realism, communicative action, negotiated order and the framework of circuits of power. The Burns and Scapens framework needs further theorisation to analyse the relationship between the institutionalisation of management accounting and accountability; and the relevance of management accounting information in negotiating in inter-organisational relationships. Methodology and field studies Field research took place in public and not-for-profit health care organisations and a municipality in Finland from 2008 to 2013. Data were gathered by document analysis, interviews, participation in meetings and observations. Findings The findings are explained in four different essays that show that institutionalisation of competitive tendering, governance and budgetary policies cannot be taken for granted to lead to accountability among institutional actors. The ways by which institutional actors think and act can be influenced by other institutional mechanisms, such as inter-organisational circuits of power and intraorganisational governance policies, independent of the institutional change process. The relevance of institutionalised management accounting policies in negotiating relationships between two or more organisations depends on processes and contexts through which institutional actors use management accounting information as a tool of communication, mutual understanding and power. Research limitations / implications The theoretical framework used can be applied validly in other studies. The empirical findings cannot be generalised directly to other organisations than the organisations analysed. Practical implications Competitive tendering and budgetary policies can be institutionalised to shape actions of institutional actors within an organisation. To lead to accountability, practitioners and policy makers should implement governance policies that increase the use of management accounting information in institutional actors’ thinking, actions and responsibility for their actions. To reach a negotiated order between organisations, institutionalised management accounting policies should be used as one of the tools of communication aiming to reach mutual agreement among institutional actors.

Warranty Prediction Using Weibull Simulation

The main objective of this master’s thesis is to examine if Weibull analysis is suitable method for warranty forecasting in the Case Company. The Case Company has used Reliasoft’s Weibull++ software, which is basing on the Weibull method, but the Company has noticed that the analysis has not given right results. This study was conducted making Weibull simulations in different profit centers of the Case Company and then comparing actual cost and forecasted cost. Simula-tions were made using different time frames and two methods for determining future deliveries. The first sub objective is to examine, which parameters of simulations will give the best result to each profit center. The second sub objective of this study is to create a simple control model for following forecasted costs and actual realized costs. The third sub objective is to document all Qlikview-parameters of profit centers. This study is a constructive research, and solutions for company’s problems are figured out in this master’s thesis. In the theory parts were introduced quality issues, for example; what is quality, quality costing and cost of poor quality. Quality is one of the major aspects in the Case Company, so understand-ing the link between quality and warranty forecasting is important. Warranty management was also introduced and other different tools for warranty forecasting. The Weibull method and its mathematical properties and reliability engineering were introduced. The main results of this master’s thesis are that the Weibull analysis forecasted too high costs, when calculating provision. Although, some forecasted values of profit centers were lower than actual values, the method works better for planning purposes. One of the reasons is that quality improving or alternatively quality decreasing is not showing in the results of the analysis in the short run. The other reason for too high values is that the products of the Case Company are com-plex and analyses were made in the profit center-level. The Weibull method was developed for standard products, but products of the Case Company consists of many complex components. According to the theory, this method was developed for homogeneous-data. So the most im-portant notification is that the analysis should be made in the product level, not the profit center level, when the data is more homogeneous.

Applying the principles of life cycle assessment and costing in process modeling to examine profit-making capability

Static process simulation has traditionally been used to model complex processes for various purposes. However, the use of static processsimulators for the preparation of holistic examinations aiming at improving profit-making capability requires a lot of work because the production of results requires the assessment of the applicability of detailed data which may be irrelevant to the objective. The relevant data for the total assessment gets buried byirrelevant data. Furthermore, the models do not include an examination of the maintenance or risk management, and economic examination is often an extra property added to them which can be performed with a spreadsheet program. A process model applicable to holistic economic examinations has been developed in this work. The model is based on the life cycle profit philosophy developed by Hagberg and Henriksson in 1996. The construction of the model has utilized life cycle assessment and life cycle costing methodologies with a view to developing, above all, a model which would be applicable to the economic examinations of complete wholes and which would require the need for information focusing on aspects essential to the objectives. Life cycle assessment and costing differ from each other in terms of the modeling principles, but the features of bothmethodologies can be used in the development of economic process modeling. Methods applicable to the modeling of complex processes can be examined from the viewpoint of life cycle methodologies, because they involve the collection and management of large corpuses of information and the production of information for the needs of decision-makers as well. The results of the study shows that on the basis of the principles of life cycle modeling, a process model can be created which may be used to produce holistic efficiency examinations on the profit-making capability of the production line, with fewer resources thanwith traditional methods. The calculations of the model are based to the maximum extent on the information system of the factory, which means that the accuracyof the results can be improved by developing information systems so that they can provide the best information for this kind of examinations.

Taajuusmuuttajien suorituskyvyn automaattinen testausympäristö

Tämä insinöörityö tehtiin ABB Oy, Drivesin Product AC -tulosyksikön tuotekehitysosastolle Helsingissä. Työssä kehitettiin taajuusmuuttajien suorituskyvyn automaattinen testausympäristö. ABB:n taajuusmuuttajien suorituskykytestejä ei ole aikaisemmin automatisoitu. Testit on tehty käsin ja niiden suorittamiseen ja tulosten käsittelyyn on kulunut paljon aikaa. Automaattisella testauksella pyrittiin testien suorittamiseen ja tulosten käsittelyyn kuluvan ajan huomattavaan pienentymiseen. Työssä ei ollut tarkoituksena tehdä suorituskykytestejä vaan kehittää automaattinen testausympäristö eli suorituskykytestipenkki, jossa suorituskykytestit on mahdollista suorittaa. Työssä keskityttiin taajuusmuuttajan nopeus- ja momenttisäätäjien suorituskykyyn. Työ toteutettiin suunnittelu- ja ohjelmointityönä. Testausympäristön laitteisto perustuu ABB:n tuotekehityslaboratorioiden olemassaoleviin testipaikkoihin. Testausympäristössä käytetään taajuusmuuttajien lisäksi pääasiassa kolmivaiheisia oikosulkumoottoreita. Lisäksi laitteistoon kuuluu ACS800-sarjan taajuusmuuttaja kuormakäyttönä, momenttianturi ja takometri eli kierrosnopeusmittari. Ohjelmointi tehtiin National Instrumentsin LabVIEW-ohjelmointiympäristön versiolla 8.0. Testausympäristön käyttöliittymänä toimii saman yrityksen TestStand-testausohjelmiston versio 3.5. Testattavien taajuusmuuttajien ohjausta ja momenttianturin lukemista varten ohjelmoitiin virtuaali-instrumentteja. Virtuaali-instrumentteja kutsutaan TestStand-testisekvensseistä. Testisekvenssit luodaan TestStandin sekvenssieditorilla ja suoritetaan sekvenssieditorissa tai operaattorin käyttöliittymässä. Työn tuloksena syntyi taajuusmuuttajien suorituskyvyn automaattinen testausympäristö. Testausympäristöä voidaan hyödyntää sekä nykyisen että seuraavan sukupolven taajuusmuuttajien testauksessa. Sillä on mahdollista suorittaa yleisimmät taajuusmuuttajien suorituskykytestit, kuten nopeus- ja momenttisäätöjen staattinen ja dynaaminen tarkkuus, hyvin kattavasti. Testit voidaan automaattisesti suorittaa koko testikäytön sallimalla pyörimisnopeus- ja kuormitusalueella. Näytteenottotaajuus voi olla enintään 1 kHz luettaessa pyörimisnopeutta ACS800-sarjan taajuusmuuttajan kautta ja momenttianturia samanaikaisesti. Virtuaali-instrumenteista koostuvia testisekvenssejä voidaan vapaasti muokata ja kehittää testejä edelleen tai luoda kokonaan uusia testejä. Testausympäristö perustuu teollisuudessa yleisesti käytettyihin ohjelmistoihin ja tarjoaa hyvät mahdollisuudet jatkokehitykselle.