Case Study Resources Unlimited JAMIE G. JOHNSON MSM630 – MANAGEMENT OF METRICS AND MEASUREMENT 25 FEBRUARY 2016 INSTRUCTOR: Dr. HENRY DORR

Agenda Baseline Profits Gas Accounts Entry Level Management Salary Pay Equality Profit Structure Corporate Senior Management Style Lines of Communication Accounting Practices Hedge Funds

Baseline Profits Quarterly Profits (in Millions) $342, $267, $321, $157, $33, $349, $132, $289 Average Quarterly Profits (in Millions) $236.25 Standard Deviation (in Millions) $115.42

Number of Gas Accounts in 1990 1988 64 Gas Accounts 32 Oil Accounts Variance in 1988 was 256; Standard Deviation was 16 Based on staffing requirements, these number will hold true in 1990 1990 86 Oil Accounts 54 Gas Accounts

Entry Level Management Salary Male employees Earned $50k, $55k, and $52k respectively Average salary was $52,333 Standard deviation was $2,516.61 Female employee Earned $32k Average salary (men and women) was $47,250 Standard deviation (men and women) was $10,372 Two standards were used depending on the sex of the employee

Female Pay Equality Male Employee Standard Average $52,333 Male Employee Standard Deviation: $2,516.61 The average men’s salary minus the standard deviation is $49,817. This is the bottom rung for salary and the female should meet this minimum The female should have her pay increased by approximately $18k to bring her to the $49,817 minimum

Profit Structure Profits based on oil and gas sales 1988 1990 Oil – 64 accounts Gas – 32 accounts 1990 Oil – 86 accounts Gas – 54 accounts These accounts generated an average profit of $236.25M per quarter

Corporate Senior Management Style Autocratic management style – decisions made with consultation Did not consult before jumping into hedge funds/derivatives Pay decisions made without consultation No communication about different types of accounts

Lines of Communication Could have been better CEO moved towards using derivatives and hedge funds Accounting notified the CEO of potential problems, but nothing was done Unsure of actual profits Salary discrepancies

Accounting Practices Poor at best Use high risk derivatives and hedge funds Concerns about their profits Unsure of number of accounts Pay inequality Bankruptcy

Hedge Funds 500 gas accounts make a profit for 30 days After 6 days, gas accounts transferred to hedge funds 6 days is 1/5 of the way through the month 1/5 of 500 is 100. This is the amount of gas accounts that kept the company solvent for the six days Total number of gas accounts transferred was 400

Conclusion Baseline Profits Gas Accounts Entry Level Management Salary Pay Equality Profit Structure Corporate Senior Management Style Lines of Communication Accounting Practices Hedge Funds