You have just started a new job as general manager of Agnew Agricultural Ltd a UK-based company whose principal activity is the manufacture and distribution of agricultural equipment.
The last few years have been very difficult for the company, and it has survived through the support of its parent company, to whom it currently owes a significant debt. However, the company now intends to engage in a number of income generating, cost-saving and efficiency measures in order to improve its financial performance. Although these may increase costs in the short-term, management hope they will enhance awareness of the company’s products, increase sales and reduce costs and return the company to profitability.
After discussions with a number of senior managers at Agnew Agricultural Ltd, you have concluded that the current budgeting system is not operating effectively and you believe it requires significant reform.
You have therefore carried out some background research on budgeting and strategic planning and have obtained the following documents.
Assignment Brief Template Page 1 of 13
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Document 1 – A copy of Agnew Agricultural Ltd’s budgeting manual which contains guidance for staff on how the budgeting process should be carried out. Currently the company uses an incremental budgeting process, but you believe that a zero-base budgeting approach may be more beneficial.
Document 2 – New product line
Agnew Agricultural Ltd are considering introducing a new line of autonomous mower. The mower has been developed and is ready to go into production. However, management need to decide whether to manufacture the mower in a new factory unit near their main premises in North West England or to outsource production to a supplier company.