n Abrams company case x c www.slideshare.net/Milan padariya/abrams-company case-anay n SlideShare Search Upload Login Sign Technology Ome Education More Topics as inventory turnover. Use non financial measures to control the inventory levels. If it is an strategic issue you canconne the bonus system.Que. 2 What this measure to is overall evaluation of Abrams management control system?Describe any strength or weakness that yo identified but did not include ring the previous question, What changes, if any, would you recommendto top management?ln general, Abrams company adopts the lowest cost. differentiation, market focus and strategies to accomplish the organization's goal Furthermore, in order to implement thestrategies the firm establishes its own management control systems Evaluation of Abrams Management Control system The current measurement system of the company is ROE The Rol target is set based onbudget profit divided by actual beginning of the year net assets. Actual Roi is calcuiating byactual profit divided by aetual beginning of the year net asset. The advantage of the AbramsCompany RO system is it does not consider the investment added during the year, becausethe investments provide little effort to the year but more benefit to the future However theROf measurement system has some weakness such as defer asset replacement, short-termfocus at the expense of long-term The incentive compensation plan of Abrams company is bonus plan. and it calculateaccurately based on an equation, and it seems equal for alt members, in additian someadjustments also ar made associate with the performance of the managers. The performance ismeasured by compare of actual profit and budget profit However, all the measurement isPrepared by: Milan Padar 63 MBA (Pharma) Page 2 3 ABRAMS COMAPANYassociate with data, sometimes the performance wi be influence by variance elements such a economic environment, the demand level, material price, cost of labor, and governmentp so the measurement need to impro in some areas The dollar amount of corporatebonus was established b a fixed formuja linked to comp earning per share Thisinoentive