Homeless Youth targeted by violence and crime

Homeless Youth targeted by violence and crime About: This paper looks into how the homeless youth are at greater risk than other youth people as they are both victims of criminal activities and are potential targets of the state authorities such as the police. Hence it is argued that the homeless youth are at greater risk of been victimized and targeted by criminal activities due to the contextual and environmental factors involved in their daily lives and it is the responsibility of the authorities to make a change in those circumstances rather than targeting their criminal behaviors or punishing them as the homeless youth are caught in an economic and cultural trap. Introduction Youth can be viewed as a demographic category that is historically and culturally constructed (Wyn White,1997 in Mallett et al.2010). Terms such as young people and adolescence are related terms to the youth and how we think of these groups and their abilities, characteristics and nature varies across time, place, culture and social context they inhibit in. According to the academic and policy provision literature in Australia and in alliance with the World Health Organization, young people refer to people who are aged between 12 years to 25 years (Mallett et al. 2010). Our understandings of issues surrounding these young people such as youth delinquency and youth homelessness are shaped and constructed by the social context and discourse to which they have been assigned to (Mallett et al. 2010). Youth homelessness is one of the main concerns in many of the developed as well as some developing nations due to issues of power, violence and social control associated with the homeless youth (Milburn et al. 2007 Hatty et al. 1996). According to the World Health Organization (1993) there are approximately 100 million children living on the streets all over the world without proper care or shelter (WHO, 1993). There is a range of definition to homelessness with little agreement as to what constitutes the homelessness. The most common definition that dominates the publics view point is the rooflessness or the street homelessness, that defines homeless people as those who are sleeping rough and living on the streets (Hutson Liddiard, 1994). The Human Rights and Equal Opportunity Commission in their report defines homelessness as a lifestyle which includes insecurity and transiency of shelter. In its definition of homelessness, it further emphasised that homelessness is not merely li mited to the lack of shelter but also indicates a state of vulnerability to dangers such as abuse due to the detachment from family (Hatty et al. 1996). According to MacKenzie Chamberlain (2006), the basic idea underlying the cultural definition of homelessness is the shared community standards about the minimum level of accommodation people are expected to have in their community. This minimum level of accommodation acts as the basis for the categorization of homelessness as primary, secondary and tertiary categories of homelessness. The primary category includes those without conventional accommodation and are people living on the streets and the secondary homelessness includes those that move around temporary shelter such as boarding houses and short term stays with other households. The tertiary category of homelessness includes people who are in one particular shelter on a medium to long term basis which is defined as minimum 13 weeks (MacKenzie Chamberlain, 2006). This defi nition of homelessness however does not take into account or include all of the homeless population that are at risk and therefore the service providers often use a more broader definition that includes people who are at risk and are attempting to return to secure accommodation (MacKenzie Chamberlain, 2006). The discourse of at risk youth refers to how young people tend to risk their future by engaging in behaviors that would jeopardize a desirable future through engaging in problematic behaviors in the future. This discourse puts the individual at risk soles responsible for changing their behaviors by individualizing the problems and the solutions (Mallet et al. 2010). Therefore, the homeless youth can be viewed within this discourse when looking into their problematic behaviors such as substance abuse or unsafe sex which in turn labels these youth and stigmatizing them against other youth. WHY LEAVE HOME? GENDER RACE ETC Youth homelessness is a major political and social issue in contemporary Australia where a 50,000 homeless youth with approximately 2% aged between 15 24 years was reported by the year 1998 (Chamberlain MacKenzie, 1998, cited in Milburn et al. 2007). According to the Australian Bureau of Statistics, at year 2006, the homeless population in Australia totaled 105,000 with 16% accounting for absolute homelessness such as sleeping out on the streets or in improvised shelter and the number of homeless youth aged between 12 to 18 years was reported as 17,891 (Australian Bureau of Statistics, 2008). These groups of youth are often related with stigma that is associated with deviance and an economically and socially marginalized underclass that created social fears among the public and promote the vulnerability faced by these youth (Blackman, 1997). They are also three times more likely to be arrested for juvenile crimes due to their homelessness (Kaufman Spatz Wisdom, 1999 cited in Thra ne et al. 2008). In this essay I will argue that the groups of homeless youth are at greater risk than other groups of youth due to the greater vulnerability to deviant behaviors and that these deviant behaviors are social constructions that are mostly related to the public perceptions, space and place and as a result are targeted by the law enforcement authorities, mainly the police due to the contextual factors associated with their life style. Why at greater risk? Many studies have been published on the homeless youth and their involvement in the criminal activities (Miles Okamoto, 2008) and it is revealed that the homeless and runaway youth are at higher risks of offending and in engaging in deviant behavior (Thrane et al. 2008) as while on the streets they are always exposed to environments with criminal activity and violence (Miles Okamoto, 2008). Homeless young people are typically viewed as leading risky and chaotic lives with addictions and mental and other health problems that threaten their well-being (Mallett et al. 2010). They often have poor health and well-being due to high level of substance use and abuse and are at higher levels of risk in contracting sexually transmitted disease and experiencing victimization. The key areas of risk related behaviors among homeless youth include drug and alcohol use, physical and mental health issues, unsafe sexual practices and sexual health as well as violence (Mallett et al. 2010). Assaultin g behavior, shoplifting, drug dealing and prostitution to earn money for food are well known crimes among homeless youth (Thrane et al. 2008). Homeless youth are also represented as a high risk population with respect to HIV infections as a result of complex psychological and social forces they are exposed. With the freedom from parental and other social controls at young age, these youth has a greater ability to engage in deviant and risky behaviors which includes sexual risk activities which puts this vulnerable population at higher risk for HIV than their housed counter parts (Milburn et al. 2007). These behaviors can also be explained by their attitude towards their own bodies. With little or no option in life, these young people view their bodies as the last resort or personal capital they own. It is also the last thing they can exercise control or choice over as well as the only thing available for free. This can lead to regarding the body as the final resource for pleasure th at encourages them to extend the body to its limits by use of different substances and by other forms of self inflicted injuries and self abuse (Blackman, 1997). These criminal activities play a major role in constructing the image of homeless youth as dangerous and deviant (Miles Okamoto, 2008). These young people are further at risk of being victimized by criminal activity because of the unlikelihood of them reporting such crimes to the police and the lack of control they have over the environment they live in (Baron 1997; Kipke et al. 1997 cited in Miles Okamoto, 2008). However, it is important to understand the way the context of the street creates a complex set of issues for homeless youth due to negative peer affiliations, exposure to crime, violence and substance use that acts as part of the lived experience of the homeless youth (Miles Okamoto, 2008). According to Blackman (1997), the homeless youth groups has sunken themselves in a localized subculture where specific strategies are used for coping with the threats faced in their everyday lives which he calls the cultural immersion that often acts as an element of a culture of survival. Problems of hunger and shelter lead to offenses from theft of food to serious theft and together with these, problems of unemployment and shelter brings out prostitution (McCarthey Hagan, 1992). This reveals the situational context of the deviances and crimes related to the homeless youth. Therefore, we can suggest that much of the deviant behavior the homeless youth engages in were produced by the conditions they live in and hence in addressing these implications policy on changing the situation context of the streets plays a bigger role than simply focusing on punishment methods (Miles Okamoto, 2008). Why target by the police? Police forces have always had an implicit responsibility in maintaining surveillance on the activities of youth cultures and young people in public spaces in order to ensure their welfare as well as to maintain good order. With regards to homeless youth, the police have been responsible in taking action to remove young people from potentially dangerous and unsafe home environments and these contacts with homeless youth and the capacity of the police to caution with some level of discretion over the prosecution of offences is important in the way that police interacts with youth (Smith, 1995). These discretions and contacts may either be positive or negative depending on number of factors. According Mark Finnane from Griffiths University, the police have often shown some level of discretion over their responses to offences against good order with factors such as class, race, gender and ethnicity of the young person in offence carrying some influence on the manner the police would proc eed with the offence creating a difference in the way young people are treated for offences (Finnane cited in White Alder, 1994). This is particularly relevant in regards to the Aboriginal homeless youth in Australia with serious concerns raised on the relationship between Aboriginal young people and the juvenile justice system (Cunneen, 1995). Aboriginal homeless young people are often subjected to police surveillance with more aggressive police interventions, intimidations and harassments in their day to day lives (Smith, 1995). The Indigenous people were also over represented in all states of the homeless population in Australia (MacKenzie Chamberlain, 2008) as well as in public custody and juvenile detention centers (Cunneen, 1995). Unemployed and with little or no disposable income and with more time in hand, the spaces homeless young people inhabit are more likely to be of risk and violence and as a result they are continually exposed to aggressions which are far from their choosing (Blackman, 1997). Also due to the little social connections they have within the rest of the homeless youth, these young people tend to gather around in public spaces more often that other young people. Due to commercialization where more public space is been taken off for commercial purposes the young homeless youth tend to meet and socialize in shopping centers and other similar places where they become obvious targets of the law enforcement authorities (Smith, 1995). Therefore, need for negotiating public space is a main factor that attracts the police forces to homeless youth as the police carries the responsibility in maintaining good order where as the homeless youth are in search of claiming space of themselves for shelter a nd survival. The relationship between the police and homeless youth are also affected by the public perception of homeless young people (Finnane cited in Smith, 1995). The publics attitude that in return affects the local policies has the ability to increase or decrease the level of social control or strain for homeless youth (Miles Okamoto, 2008). The media portrayal of social problems like homelessness has a great impact on the formation of public attitudes as the media acts as the main source of information to many people (Hutson Lididard, 1994). For example, when the term juvenile delinquency was first presented in the media in the 1950s with a view of youth culture as deviant or delinquent, increasing policing measures were made in order to keep youth cultures under surveillance. Incidents as such provide evidence of a clear relationship between public perception, the media presentations and public policy (Smith, 1995). And these policies and attitudes could result in alienating and stigma tizing the homeless young people by acting as a barrier to achieve positive goals and forcing negative relationships with their communities and authorities (Miles Okamoto, 2008). Conclusion In conclusion, young people living on the streets have typically exited from households with conflict and violence into the streets where they experience threats and acts of violence by other homeless and street predators as well as by those in authority particularly the police (Davis, Hatty Burke, 1995). It is not surprising that these young people encounter more contacts with the police as much of the homeless people reported incidence of drug, alcohol and other substance abuse and minor petty crimes to major threats (Smith, 1995). These crimes associated with the homeless youth are not simply deviant behaviors that can be individualized but are products of the contextual and environmental factors surrounding these youth. Studies have revealed that many homeless young people (up to 55%) reported contact with the police as a consequence of their homelessness and majority of the respondents reported negative relationships with the police where they were distrustful and fearful of th e police (Thrane et al. 2008) while some mentioning of instances where the police helping them access services and help(Smith, 1995). Therefore, it is important that the authorities look more into the context of these homeless young people who are often disengaged from positive sources and are in need direction and assistance rather than control or punishment and criminalizing the homeless youth.

Luotang Power

Table of Contents INTRODUCTION1 QUANTITATIVE VARIANCE ANALYSIS2 i. Quantity Variance5 ii. Price Variance6 iii. Fuel Efficiency Variance7 iv. Fuel Cost Variance8 v. Other Cost Variances9 5 PORTER FORCES†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 11 CONCLUSION12 INTRODUCTION Luotang Power was established by American companies who was selected bidders to operate a 600 MW coal-fired power plant project. This company was located in Hubei Province, China. Although this company wholly foreign-owned but they need to use Chinese- manufactured equipment. There are two main issues in this case study.The first issue is the positive performance of Luotang Power does not show in the financial results. Mr. Tan Min Yi was scheduled to make a presentation to the Board of Directors of his parent company, China Hua Tong Power about the results. Mr. Tan Min Yi is a general manager of the Luotang Power Company. He needs to review and investigate the financial results before presenting to the board the disappointing results. The second issue is about the quality of the coal provided by the supplier, Pingdingshan. Sometimes, the Pingdingshan will supply some of the coal with bad quality.They will send some of the coal contain high level of moisture. They need to take time to dry it and will cause additional costs to happen like storage cost. Mr. Tan wants to use a variance analysis method to better understand plant performance compared to the previous year. So, we will help Mr. Tan to solve this problem by calculating and prepare the recommendations to improve reporting and evaluation of the plant's performance. QUANTITATIVE VARIANCE ANALYSIS As what have been introduced before, the Luotang Power CEO has to present the financial report to the board of director.But first he has to understand about the quantitative variance ana lysis. Variance Analysis is the analysis of performance by means of variances. This tool can be used to promote management action at the earliest possible stages. After a budget (based on standard costs) has been set, its usefulness lies in the review procedures which compare actual results against the budget. Variance analysis is the process of examining in detail each variance between actual and budgeted or standard costs to determine the reasons why budgeted results were not met. When the effect of variance is concerned, there are two types of variances.When the actual results are better than expected results given variance is described as favorable variance. In common use favorable variance is denoted by the letter (F). But when actual results are worse than expected results given variance is described as adverse variance, or unfavorable variance. In common it is denoted by the letter (U). There are very few plans that turn out exactly as planned. Even when the overall objective s of the plan are achieved, some, if not all components of the performance will have varied from the sub-plans or standards that make up the overall picture.So does the performance on the Luotang Power in 2011 which most of the variance is in unfavorable results. The variance analysis provides a framework for all business managers including Mr. Tan as one of Luotang Power directors to break down the overall performance of an organization, so that each individual element of the business can be isolated and analyzed in turn. The CEO facing problem with quantity variance, price variance, fuel efficiency variance, fuel cost variance and other cost variances. All these variance help him to explain about the plant performance throughout the year 2011 to the board of directors.Later, we will explain some of the variance that we have listed and all the problems related to â€Å"Luotang Power: Variance Explained† case study. This is the calculation of all variances. Variance | Calcula tion | Result| Quantity Variance| (3427351-3937377) x 0. 4219 = 215179. 97| Unfavorable| Price Variance| | Unfavorable | Fuel Efficiency Variance| [(346-347) x 0. 4219] x 3427351= 1445999387| Unfavorable| Fuel Cost Variance| (315612 – 320183)=5021| Unfavorable| Fixed Operating ; Maintainance Variance| (33178-39068)=5890(304090 – 348549)=44459| UnfavorableUnfavorable | i. Quantity Variance 3,427,351-3,937,377) x 0. 4219 = RM 215,179. 97 (UNFAVOURABLE) Based on the calculation above, we can see that amount of selling to HPPC had been declined in the year 2011 regarding HPPC produce electricity by itself. As we can see, Luotang Company never expects that demanding from HPPC will decline because looking at data, they make a bulk purchase on year 2010 and suddenly on year 2011, have dropped in demand. Ratio of coal consumed to net electricity generation| 2010| 2011| 347,000 X 100 % = 8. 1 % 3,937,377| 346,000 X 100 % = 10. 09 % 3,427,351 | Based on calculation above, we can see that in the year 2010, Luotang very effectively usage their resources accordingly to generate electricity, but in the year 2011, Luotang lack of usage of resources to generate electricity. | Excessive usage of materials that is usually a reason of unfavorable direct material quantity variance may be due to lower quality of materials, untrained workers, poor supervision. Generally, production managers are responsible for this variance.However purchasing department may also be held responsible for purchasing materials of lower quality to economize on prices. Where Purchasing Department purchases low grade direct materials at low prices to show a favorable material price variance, the material quantity variance is usually unfavorable due to lower quality of direct materials. ii. Price Variance The definition of price variance is the difference between the actual and standard prices of one product unit multiplied by how much input was used.The formula is: Price Variance = (Actual P rice – Standard Price) X Actual Quantity The price variance can be used by a business to assess the change between expected and actual input prices, since a positive price variance reflects an unfavorable cost rise, while a negative result indicates a favorable cost decrease. To adapt price variance to the type of business Luotang power it’s based upon the average price that electricity was sold to HPPC. The formula is: (Price per MWh in Current Year-Price per MWh in Prior Year) * Net Generation in Current Year From our calculation in price variance for Loutang Power we get amount RMB 6,511,9669.Since the amount is positive, that’s mean it unfavorable. Unfavorable show that Loutang Power unefficiency in managing its price and cost. We can see that demand from clients in 2010 is higher than others years because in 2010 the price is lowest. In 2009 is the highest price than its effect the demands. General Manager increases a little bit price in 2011, so the demand is decreased dramatically. This may also be caused by HPPC had its own electricity generating and produce themselves the electricity. Price is influence of the increase of cost, especially direct material cost.Luotang power must change the term of contract with the supplier. Origin contract is Luotang Power paid a fixed price per tonne. If staying with fixed price, the company must pay it although the coal quality has not reached the expected quality. Luotang Power purchase it with a large number, it’s a high risk because the supplier inconsistent provides the quality coal. So Luotang must buy the coal with a condition that if the coal is not meet the qualifications, it must be returned back to the supplier. Luotang Power must set the fix benchmark for the coal, so the supplier must follow it.If not Luotang Power doesn’t have to pay it, just return it. It saves the cost. So Luotang can set the price lower. iii. Fuel Efficiency Variance The meaning of fuel efficiency v ariance in this case study is the difference between the current year of the quantity of coal used to generate each MWh of electricity sold and the prior year of the quantity of coal used to generate each MWh of electricity sold. This is calculation how to find the fuel efficiency variance: (Mass of coal used per net MWh sold this year- Mass of coal used per net MWh sold last year) x MWh sold this year's x price of coal last yearFrom our calculation, for 2011, the fuel efficiency variance is –RMB 1,445,999,387. This show that this variance is unfavorable because the result in negative. We found several reasons that cause this to happen. The first reason is from an electricity demand from the HPPC is decreasing in 2011. This due to the HPPC have its own electricity generating units. The HPPC can produce the same electricity as the Luotang electricity. The second reason is because of the price that Luotang Power offer to HPPC. If you see in 2010, the price that the Luotang offe r is cheaper than 2011.Because of the increasing of electric price in 2011, the amount of electricity sold is decreasing. The other reason maybe for the quality of coal provided by Pingdingshan. Pingdingshan was required to supply low sulfur bituminous coal. If the Pingdingshan provides low quality of coal to the Luotang, the coal that can be used to produce electricity will decrease then, the production of electricity will be reduced. There is some recommendation that we will give to Mr. Tan to overcome this problem. We recommend that Luotang revenue does not just depend on the HPPC only.Mr. Tan needs to find other clients. Even it will cost to Luotang but it is will give advantage to Luotang’s long- term performance. The second recommendation is Luotang needs to lower the price of electricity if the company wants the HPPC buy more electricity from them. The last one is, the Luotang need too strict with the Pingdingshan regarding to the direct material, coal. If the Pingding shan provides them with a low quality of the coal, the Luotang needs to tell them or not to pay the expenses. The Luotang cannot let this happen.Although they can adjust the price but actually it will make the Luotang suffered loss in controlling their direct materials because they need to bear other cost in order to adjust back the quality of coal like the storage expenses. iv. Fuel Cost Variance In cost accounting, deviation between the actual cost and the standard cost. If the actual cost exceeds the standard cost, an unfavorable variance exists. A variance can be calculated for different cost items such as manufacturing costs (i. e. , direct material, direct labor, and overhead), selling expenses, and administrative expenses.The reasons for a variance should be identified and corrective action taken. Favorable variance can be defined as a difference between an actual cost and a budgeted or standard cost, and the actual cost is the lesser amount. In the case of revenues, a favora ble variance occurs when the actual revenues are greater than the budgeted or standard revenues. And unfavorable variance can be defined as the amount by which actual costs exceed the standard costs or budgeted costs. Also, the amount by which actual revenues are less than the budgeted revenues.After all of us do the analysis, we have found that this company having major problems in fuel cost, the fuel that Luotang receive from the Pingdingshan for this year have a low quality to compare from the last year. This has affected the production of the company. So that it brought the company a major problem that are decreasing purchase from HPPC. Analysis variance has shown that the fuel cost variance it just unfavorable. We have used the original formula, that are, Cost Variance = (cost this year-cost last year) x actual quantity this year.But we have modified the formula to calculate with Fuel Cost Variance = (price of coal this year-price of coal last year) x Mass of used per net MWh s old this year x MWh sold this year. So that we have found that Luotang have unfavorable variance. The cost is increased from the standard cost because the coal that receive from the Pingdingshan have a problem with its quality so that its take time to plant to generate or burn the coal. So that, its increase the cost with a lower quantity of production. From the analysis, we recommend Luatong should do fuel diversification.Fuel diversification implies the selection of a mix of electric generation technologies in a fashion that strikes a good balance between reduced cost and reduced risk. A long-term perspective as well as a short-term perspective can be taken on the fuel diversification problem. In a short-term perspective, the decision maker is limited to selecting power sources from existing alternatives. The construction of new generation plants and the associated fixed costs are justifiably ignored. The short-term problem translates in most instances to a scheduling problem.On t he other hand the long-term perspective on fuel diversity seeks insights that can help decision-making involved in the selection of new power plants. The long-term problem can be thought of as a resource- planning problem. Our focus is on the long-term perspective. Long-term fuel diversity has recently gained the attention of state regulators and federal policy makers. It has been argued that fuel diversity has the potential to advance several socially desirable objectives such as lower long-term prices, low price risk, less dependent on foreign sources of energy, higher power reliability and a cleaner environment. . Other Cost Variances The variance that related in this area are Coal Cost, Fixed Operating and Maintenance Cost, and Depreciation Expense. This is because in this case, only these three costs that have the useful information that help us to make an analysis of variance. Allocated cash costs are a type of expense that is clearly associated with and so can be readily assi gned to a certain business process, project or department. Allocated costs can be divided into two which allocate cash costs and allocated non-cash costs. Allocated cash costs are most probably things related to cash items.In this case it can be implemented in fixed operating and maintenance while allocating non-cash costs example is depreciation expense. The formula to calculate these two types of allocated cost is: Allocated Cash @ Non-Cash Costs = (Cost of volume allocated based on the quantity used – Actual costs) Related to the Allocated Cash Costs, in this case, we can simply use the formula: Allocated Cash Costs = (Standard Cost for Fixed Operating and Maintenance 2011 – Actual Fixed Operating and Maintenance 2011) From our calculation, the standard cost is lower if compared with the actual coal cost in 2011.From the table, it shows that – 5890 or can be denoted by 5890 U. Which shows unfavorable result. The main factor that contributes to increase of act ual result is unmanageable plant management. This is including engineering, planning, accounting and cost of railway fee. While in Luotang Power, they only have depreciation expense that have a relation of Allocated Non-Cash Cost, we can simply use the formula: Allocated Non-Cash Costs = (Standard Cost for Depreciation Expense 2011 – Actual Depreciation Expense 2011) From our calculation, the standard cost is lower if compared with the actual coal cost in 2011.From the table, it shows that – 44459 or can be denoted by 44459 U. Which shows unfavorable result. The main cause that contributes to increase of actual result is the standard cost of depreciation that have been planned is unachievable. In the previous two years, they recorded RMB 350320 in 2009 and RMB 349342 in 2010. The issue arises is why Loutang Power finance department decreases the standard cost significantly and unachievable. Our suggestion towards this company to minimize their unfavorable results is ma nage their plant in a very successful way and perhaps can decrease the unachievable amount of the fixed cost.Firstly, Luotang Power can minimize their cost of handling the management of their plant in a very strategic way. They have to manage the railway line regarding its fees, manage coal by maximizing the utilities of storage area, manage its boilers with a full efficiency of boiling point and so much more related to the site layout for 2x300MW Luotang Power Project. Next, they must take into consideration on achievable amount of the standard cost. It is essential to all standard cost setter to discuss among all of the directors and subordinates first before setting up the most accurate standard cost that can be used as a benchmark for a company. Porter Forces 1) Efficiency Based on data, we can see that Luotang Company doesn't have efficiency in producing electricity because cost for fixed expenses in the year 2011 are increasing. They have made by their own estimated or standar d cost on year 2011 but when comes to producing the actual cost incurred more than standard cost. This is showing that they fail to manage their production either capability of the machine or weakness of management itself. 2) Bargain of buyer Regarding to theory 5 Porter Forces, their purchaser has power of deciding the price. When we looking at the information, Luotang depend more on HPPC as a buyer.So this made difficulties to Luotang to decide their own price although they have an efficiency in production. 3) Bargain of supplier As we know, supplier as the important agent to determine whether our company successful or not, because we rely on their capabilities to supply us with quality raw materials and reasonable price, also willing to provide us when we need. In this case, Luotang depend on Pingdingshan and recently reported that coal quality had deteriorated about 3 % from the expected quality. CONCLUSION Luotang Power Company is an international power developers to finance, d esign, construct and operate coal-fired power plant.However due to the nature of our business, we have a big problem about our supplier that have gotten changed on 2011. The supplier has supplied low quality coal to Luotang and that disturbs the progress of the production. That has caused decreases demand from a loyal customer. And its affect the financial situation of the company. Besides that, several recommendations should be taken to ensure a successful implementation of the system in our company. First of all, purchasing department may also be held responsible for purchasing materials that can define the quality of the material.Besides that, Luotang also change the term of contract with the supplier, need to find other clients not to depend to HPPC, Luotang also should do fuel diversification to make sure there are several suppliers, and Luotang can minimize their cost of handling the management of their plant in a very strategic way so that they can improve their management we ll. In addition, what we have found by concept 5 Forces in this company that their faces during their production. There are ; Luotang not have efficiency in producing electricity because cost for fixed expenses in the year 2011 are increasing.Besides that, bargain of buyer that show their purchaser have power in deciding the price. And lastly, bargain of supplier that show there is a supplier that supply the raw material to Luotang. As a conclusion in overall, we can see that Luotang Power Company has a good performance in their production but it have decreased in year 2011 because there are several problems that unexpected, that come from the supplier and others. So that, Luotang should do in several ways to overcome the problem and prove it to the Boar of Directors. Luotang Power Table of Contents INTRODUCTION1 QUANTITATIVE VARIANCE ANALYSIS2 i. Quantity Variance5 ii. Price Variance6 iii. Fuel Efficiency Variance7 iv. Fuel Cost Variance8 v. Other Cost Variances9 5 PORTER FORCES†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 11 CONCLUSION12 INTRODUCTION Luotang Power was established by American companies who was selected bidders to operate a 600 MW coal-fired power plant project. This company was located in Hubei Province, China. Although this company wholly foreign-owned but they need to use Chinese- manufactured equipment. There are two main issues in this case study.The first issue is the positive performance of Luotang Power does not show in the financial results. Mr. Tan Min Yi was scheduled to make a presentation to the Board of Directors of his parent company, China Hua Tong Power about the results. Mr. Tan Min Yi is a general manager of the Luotang Power Company. He needs to review and investigate the financial results before presenting to the board the disappointing results. The second issue is about the quality of the coal provided by the supplier, Pingdingshan. Sometimes, the Pingdingshan will supply some of the coal with bad quality.They will send some of the coal contain high level of moisture. They need to take time to dry it and will cause additional costs to happen like storage cost. Mr. Tan wants to use a variance analysis method to better understand plant performance compared to the previous year. So, we will help Mr. Tan to solve this problem by calculating and prepare the recommendations to improve reporting and evaluation of the plant's performance. QUANTITATIVE VARIANCE ANALYSIS As what have been introduced before, the Luotang Power CEO has to present the financial report to the board of director.But first he has to understand about the quantitative variance ana lysis. Variance Analysis is the analysis of performance by means of variances. This tool can be used to promote management action at the earliest possible stages. After a budget (based on standard costs) has been set, its usefulness lies in the review procedures which compare actual results against the budget. Variance analysis is the process of examining in detail each variance between actual and budgeted or standard costs to determine the reasons why budgeted results were not met. When the effect of variance is concerned, there are two types of variances.When the actual results are better than expected results given variance is described as favorable variance. In common use favorable variance is denoted by the letter (F). But when actual results are worse than expected results given variance is described as adverse variance, or unfavorable variance. In common it is denoted by the letter (U). There are very few plans that turn out exactly as planned. Even when the overall objective s of the plan are achieved, some, if not all components of the performance will have varied from the sub-plans or standards that make up the overall picture.So does the performance on the Luotang Power in 2011 which most of the variance is in unfavorable results. The variance analysis provides a framework for all business managers including Mr. Tan as one of Luotang Power directors to break down the overall performance of an organization, so that each individual element of the business can be isolated and analyzed in turn. The CEO facing problem with quantity variance, price variance, fuel efficiency variance, fuel cost variance and other cost variances. All these variance help him to explain about the plant performance throughout the year 2011 to the board of directors.Later, we will explain some of the variance that we have listed and all the problems related to â€Å"Luotang Power: Variance Explained† case study. This is the calculation of all variances. Variance | Calcula tion | Result| Quantity Variance| (3427351-3937377) x 0. 4219 = 215179. 97| Unfavorable| Price Variance| | Unfavorable | Fuel Efficiency Variance| [(346-347) x 0. 4219] x 3427351= 1445999387| Unfavorable| Fuel Cost Variance| (315612 – 320183)=5021| Unfavorable| Fixed Operating ; Maintainance Variance| (33178-39068)=5890(304090 – 348549)=44459| UnfavorableUnfavorable | i. Quantity Variance 3,427,351-3,937,377) x 0. 4219 = RM 215,179. 97 (UNFAVOURABLE) Based on the calculation above, we can see that amount of selling to HPPC had been declined in the year 2011 regarding HPPC produce electricity by itself. As we can see, Luotang Company never expects that demanding from HPPC will decline because looking at data, they make a bulk purchase on year 2010 and suddenly on year 2011, have dropped in demand. Ratio of coal consumed to net electricity generation| 2010| 2011| 347,000 X 100 % = 8. 1 % 3,937,377| 346,000 X 100 % = 10. 09 % 3,427,351 | Based on calculation above, we can see that in the year 2010, Luotang very effectively usage their resources accordingly to generate electricity, but in the year 2011, Luotang lack of usage of resources to generate electricity. | Excessive usage of materials that is usually a reason of unfavorable direct material quantity variance may be due to lower quality of materials, untrained workers, poor supervision. Generally, production managers are responsible for this variance.However purchasing department may also be held responsible for purchasing materials of lower quality to economize on prices. Where Purchasing Department purchases low grade direct materials at low prices to show a favorable material price variance, the material quantity variance is usually unfavorable due to lower quality of direct materials. ii. Price Variance The definition of price variance is the difference between the actual and standard prices of one product unit multiplied by how much input was used.The formula is: Price Variance = (Actual P rice – Standard Price) X Actual Quantity The price variance can be used by a business to assess the change between expected and actual input prices, since a positive price variance reflects an unfavorable cost rise, while a negative result indicates a favorable cost decrease. To adapt price variance to the type of business Luotang power it’s based upon the average price that electricity was sold to HPPC. The formula is: (Price per MWh in Current Year-Price per MWh in Prior Year) * Net Generation in Current Year From our calculation in price variance for Loutang Power we get amount RMB 6,511,9669.Since the amount is positive, that’s mean it unfavorable. Unfavorable show that Loutang Power unefficiency in managing its price and cost. We can see that demand from clients in 2010 is higher than others years because in 2010 the price is lowest. In 2009 is the highest price than its effect the demands. General Manager increases a little bit price in 2011, so the demand is decreased dramatically. This may also be caused by HPPC had its own electricity generating and produce themselves the electricity. Price is influence of the increase of cost, especially direct material cost.Luotang power must change the term of contract with the supplier. Origin contract is Luotang Power paid a fixed price per tonne. If staying with fixed price, the company must pay it although the coal quality has not reached the expected quality. Luotang Power purchase it with a large number, it’s a high risk because the supplier inconsistent provides the quality coal. So Luotang must buy the coal with a condition that if the coal is not meet the qualifications, it must be returned back to the supplier. Luotang Power must set the fix benchmark for the coal, so the supplier must follow it.If not Luotang Power doesn’t have to pay it, just return it. It saves the cost. So Luotang can set the price lower. iii. Fuel Efficiency Variance The meaning of fuel efficiency v ariance in this case study is the difference between the current year of the quantity of coal used to generate each MWh of electricity sold and the prior year of the quantity of coal used to generate each MWh of electricity sold. This is calculation how to find the fuel efficiency variance: (Mass of coal used per net MWh sold this year- Mass of coal used per net MWh sold last year) x MWh sold this year's x price of coal last yearFrom our calculation, for 2011, the fuel efficiency variance is –RMB 1,445,999,387. This show that this variance is unfavorable because the result in negative. We found several reasons that cause this to happen. The first reason is from an electricity demand from the HPPC is decreasing in 2011. This due to the HPPC have its own electricity generating units. The HPPC can produce the same electricity as the Luotang electricity. The second reason is because of the price that Luotang Power offer to HPPC. If you see in 2010, the price that the Luotang offe r is cheaper than 2011.Because of the increasing of electric price in 2011, the amount of electricity sold is decreasing. The other reason maybe for the quality of coal provided by Pingdingshan. Pingdingshan was required to supply low sulfur bituminous coal. If the Pingdingshan provides low quality of coal to the Luotang, the coal that can be used to produce electricity will decrease then, the production of electricity will be reduced. There is some recommendation that we will give to Mr. Tan to overcome this problem. We recommend that Luotang revenue does not just depend on the HPPC only.Mr. Tan needs to find other clients. Even it will cost to Luotang but it is will give advantage to Luotang’s long- term performance. The second recommendation is Luotang needs to lower the price of electricity if the company wants the HPPC buy more electricity from them. The last one is, the Luotang need too strict with the Pingdingshan regarding to the direct material, coal. If the Pingding shan provides them with a low quality of the coal, the Luotang needs to tell them or not to pay the expenses. The Luotang cannot let this happen.Although they can adjust the price but actually it will make the Luotang suffered loss in controlling their direct materials because they need to bear other cost in order to adjust back the quality of coal like the storage expenses. iv. Fuel Cost Variance In cost accounting, deviation between the actual cost and the standard cost. If the actual cost exceeds the standard cost, an unfavorable variance exists. A variance can be calculated for different cost items such as manufacturing costs (i. e. , direct material, direct labor, and overhead), selling expenses, and administrative expenses.The reasons for a variance should be identified and corrective action taken. Favorable variance can be defined as a difference between an actual cost and a budgeted or standard cost, and the actual cost is the lesser amount. In the case of revenues, a favora ble variance occurs when the actual revenues are greater than the budgeted or standard revenues. And unfavorable variance can be defined as the amount by which actual costs exceed the standard costs or budgeted costs. Also, the amount by which actual revenues are less than the budgeted revenues.After all of us do the analysis, we have found that this company having major problems in fuel cost, the fuel that Luotang receive from the Pingdingshan for this year have a low quality to compare from the last year. This has affected the production of the company. So that it brought the company a major problem that are decreasing purchase from HPPC. Analysis variance has shown that the fuel cost variance it just unfavorable. We have used the original formula, that are, Cost Variance = (cost this year-cost last year) x actual quantity this year.But we have modified the formula to calculate with Fuel Cost Variance = (price of coal this year-price of coal last year) x Mass of used per net MWh s old this year x MWh sold this year. So that we have found that Luotang have unfavorable variance. The cost is increased from the standard cost because the coal that receive from the Pingdingshan have a problem with its quality so that its take time to plant to generate or burn the coal. So that, its increase the cost with a lower quantity of production. From the analysis, we recommend Luatong should do fuel diversification.Fuel diversification implies the selection of a mix of electric generation technologies in a fashion that strikes a good balance between reduced cost and reduced risk. A long-term perspective as well as a short-term perspective can be taken on the fuel diversification problem. In a short-term perspective, the decision maker is limited to selecting power sources from existing alternatives. The construction of new generation plants and the associated fixed costs are justifiably ignored. The short-term problem translates in most instances to a scheduling problem.On t he other hand the long-term perspective on fuel diversity seeks insights that can help decision-making involved in the selection of new power plants. The long-term problem can be thought of as a resource- planning problem. Our focus is on the long-term perspective. Long-term fuel diversity has recently gained the attention of state regulators and federal policy makers. It has been argued that fuel diversity has the potential to advance several socially desirable objectives such as lower long-term prices, low price risk, less dependent on foreign sources of energy, higher power reliability and a cleaner environment. . Other Cost Variances The variance that related in this area are Coal Cost, Fixed Operating and Maintenance Cost, and Depreciation Expense. This is because in this case, only these three costs that have the useful information that help us to make an analysis of variance. Allocated cash costs are a type of expense that is clearly associated with and so can be readily assi gned to a certain business process, project or department. Allocated costs can be divided into two which allocate cash costs and allocated non-cash costs. Allocated cash costs are most probably things related to cash items.In this case it can be implemented in fixed operating and maintenance while allocating non-cash costs example is depreciation expense. The formula to calculate these two types of allocated cost is: Allocated Cash @ Non-Cash Costs = (Cost of volume allocated based on the quantity used – Actual costs) Related to the Allocated Cash Costs, in this case, we can simply use the formula: Allocated Cash Costs = (Standard Cost for Fixed Operating and Maintenance 2011 – Actual Fixed Operating and Maintenance 2011) From our calculation, the standard cost is lower if compared with the actual coal cost in 2011.From the table, it shows that – 5890 or can be denoted by 5890 U. Which shows unfavorable result. The main factor that contributes to increase of act ual result is unmanageable plant management. This is including engineering, planning, accounting and cost of railway fee. While in Luotang Power, they only have depreciation expense that have a relation of Allocated Non-Cash Cost, we can simply use the formula: Allocated Non-Cash Costs = (Standard Cost for Depreciation Expense 2011 – Actual Depreciation Expense 2011) From our calculation, the standard cost is lower if compared with the actual coal cost in 2011.From the table, it shows that – 44459 or can be denoted by 44459 U. Which shows unfavorable result. The main cause that contributes to increase of actual result is the standard cost of depreciation that have been planned is unachievable. In the previous two years, they recorded RMB 350320 in 2009 and RMB 349342 in 2010. The issue arises is why Loutang Power finance department decreases the standard cost significantly and unachievable. Our suggestion towards this company to minimize their unfavorable results is ma nage their plant in a very successful way and perhaps can decrease the unachievable amount of the fixed cost.Firstly, Luotang Power can minimize their cost of handling the management of their plant in a very strategic way. They have to manage the railway line regarding its fees, manage coal by maximizing the utilities of storage area, manage its boilers with a full efficiency of boiling point and so much more related to the site layout for 2x300MW Luotang Power Project. Next, they must take into consideration on achievable amount of the standard cost. It is essential to all standard cost setter to discuss among all of the directors and subordinates first before setting up the most accurate standard cost that can be used as a benchmark for a company. Porter Forces 1) Efficiency Based on data, we can see that Luotang Company doesn't have efficiency in producing electricity because cost for fixed expenses in the year 2011 are increasing. They have made by their own estimated or standar d cost on year 2011 but when comes to producing the actual cost incurred more than standard cost. This is showing that they fail to manage their production either capability of the machine or weakness of management itself. 2) Bargain of buyer Regarding to theory 5 Porter Forces, their purchaser has power of deciding the price. When we looking at the information, Luotang depend more on HPPC as a buyer.So this made difficulties to Luotang to decide their own price although they have an efficiency in production. 3) Bargain of supplier As we know, supplier as the important agent to determine whether our company successful or not, because we rely on their capabilities to supply us with quality raw materials and reasonable price, also willing to provide us when we need. In this case, Luotang depend on Pingdingshan and recently reported that coal quality had deteriorated about 3 % from the expected quality. CONCLUSION Luotang Power Company is an international power developers to finance, d esign, construct and operate coal-fired power plant.However due to the nature of our business, we have a big problem about our supplier that have gotten changed on 2011. The supplier has supplied low quality coal to Luotang and that disturbs the progress of the production. That has caused decreases demand from a loyal customer. And its affect the financial situation of the company. Besides that, several recommendations should be taken to ensure a successful implementation of the system in our company. First of all, purchasing department may also be held responsible for purchasing materials that can define the quality of the material.Besides that, Luotang also change the term of contract with the supplier, need to find other clients not to depend to HPPC, Luotang also should do fuel diversification to make sure there are several suppliers, and Luotang can minimize their cost of handling the management of their plant in a very strategic way so that they can improve their management we ll. In addition, what we have found by concept 5 Forces in this company that their faces during their production. There are ; Luotang not have efficiency in producing electricity because cost for fixed expenses in the year 2011 are increasing.Besides that, bargain of buyer that show their purchaser have power in deciding the price. And lastly, bargain of supplier that show there is a supplier that supply the raw material to Luotang. As a conclusion in overall, we can see that Luotang Power Company has a good performance in their production but it have decreased in year 2011 because there are several problems that unexpected, that come from the supplier and others. So that, Luotang should do in several ways to overcome the problem and prove it to the Boar of Directors.

Kaoru Ishikawa

Kaoru Ishikawa was born in Tokyo Japan in 1939. He earned his Engineering degree in applied chemistry from the University of Tokyo. After Graduating from college he was a navel technical officer until 1941. He worked at the Nissian Liquid Fuel Company until 1947 and then began his educational vocation at the University of Tokyo. In 1978 he became Musashi Institute of Technology President (Kaoru Ishikawa, 2008). Ishikawa came to be known as the â€Å"father of the Quality revolution† to the people of Japan. When he was a professor at Tokyo University he realized the importance of the quality control methods that were introduced to his country by W. E Deming and J. R Juarn. He applied those methods to work with his country’s industries. Ishikawa developed the â€Å"quality circles†, the cause and effect diagram, and the importance of the seven quality tools. In addition, he wrote several books that explained statistics to the nonspecialist which one was the Guide to Quality Control. Another book he wrote was how to Operate QC Circle Activities which is based on quality circles. Quality circles are a method used to improve quality. Quality circles were developed in Japan in 1962 by Kaoru Ishikawa. A quality circle is a volunteer group of employees from the same work area who meet together to discuss work place improvement (Quality Circles, 2008). Quality circles were first used at the Nippon Telegraph and Cable Company in 1962 (â€Å"Death of Professor,† 1989). Ishikawa had only intended his methods of quality circles to be used for Japan but it has now spread to more than 50 countries. With the development of Ishikawa’s cause and effect diagram management leaders made large advancements in quality improvement ( Kaoru Ishikawa: One Step, 2011). With this new diagram users can see all of the possible causes of a result and find the process of imperfections ( Kaoru Ishikawa: One Step, 2011). The cause and effect diagram can easily be used by non- specialist to analyze and solve problems. Dr. E. W Deming used this diagram to teach Total Quality Control in Japan. Another name for Ishikawa’s cause and effect diagram is the Ishikawa or fishbone diagram. Ishikawa showed the importance of the seven Quality tools which are control chart, run chart, histogram scatter diagram, Pareto chart and flow chart. Ishikawa also expanded on Deming’s four steps into six steps which are determine goals and targets, determine methods of reaching goals, engage in education and training, implement work, check the effects of implementation, and take appropriate action ( Kaoru Ishikawa: One Step, 2011). Ishikawa also wrote and was the editor of many books. He wrote Guide to Quality control in 1968, as well as What Is Total Quality Control in 1981. He was the editor of QC circle Koryo in 1970, and How to operate QC Circle activates in 1971. Ishikawa has been credited with Japan’s quality achievements and has received many awards such as the Deming prize, and the blue ribbon medal which was given to him by the Japanese government. His work has changed how people perceive quality management and many of his methods and books are still used to this day by large and small businesses. Bibliography http://www.skymark.com/resources/leaders/ishikawa.asp http://www.vectorstudy.com/management_theories/quality_circles.htm

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