In MikesBikes Accounting you are managing an existing bicycle manufacturing company who has been struggling in a competitive industry. Your objective is to improve the performance of this company. The success of your management will be determined by 12 Key Performance Targets (KPIs) set by your Board of Directors. These KPIs and your performance on each are located on your Balanced Scorecard.
Your Shareholder Value (SHV) and Gross Margin indicate your company’s ability to generate revenue and profit. Your Board of Directors have set a minimum level for each.
An indication of how satisfied your customers are with your bikes. Measured by a minimum amount of sales (Wholesale Sales Revenue), an effective and efficient advertising spend (Advertising to Wholesale Sales), and the quality of your products (Warranty Rate).
Business Process KPIs
An indication of efficiency in manufacturing is measured by a minimum Production Utilization and a maximum percentage of Breakdowns, while keeping to a maximum Factory Capacity.
Learning and Growth KPIs
Your Board of Directors have set a minimum Skill Index and Motivation Index for your employees to measure the effectiveness of your Human Resource (HR) strategy. Your Board of Directors also want you to maintain a minimum Number of Products.