Specifying the structure and features of cgc new system

Assignment Help Strategic Management

Reference no: EM131055375 , Length: word count:700

Citizen's Gas Company (CGC) provides natural gas service to 200,000 customers. The customer base is divided into the following three revenue classes:

Class	Customers	Sales in Cubic Feet	Revenues
Residential	160,000	80 billion	$160 million
Commercial	38,000	15 billion	$ 25 million
Industrial	2,000	50 billion	$ 65 million
Totals		145 billion	$250 million

Residential customer gas usage is highly correlated with the weather. Commercial customer usage is partially weather dependent. Industrial customer usage is governed almost entirely by business factors.

The company buys natural gas from 10 pipeline companies in the amounts specified in contracts that run for 5 to 15 years. For some contracts, the supply is in equal monthly increments; for other contracts, the supply varies according to the heating season. Supply over the contract amounts is not available, and some contracts contain take-or-pay clauses. That is, the company must pay for the gas volume specified in the contract, regardless of the amount used.

To match customer demand with supply, gas is pumped into a storage field when supply exceeds customer demand. Gas is withdrawn when demand exceeds supply. There are no restrictions on the gas storage field except that the field must be full at the beginning of each gas year (September 1). Consequently, when the contractual supply for the remainder of the gas year is less than that required to satisfy projected demand and fill the storage field, CGC curtails service to industrial customers (except for heating quantities). The curtailments must be carefully controlled to prevent either an oversupply at year-end or a curtailing of commercial or residential customers so the storage field can be filled at year-end.

In recent years, CGC's planning efforts have not been able to control the supply during the gas year or provide the information needed to establish long-term contracts. Customer demand has been projected only as a function of the total number of customers. Commercial and industrial customers' demand for gas has been curtailed. This has resulted in lost sales and caused an excess of supply at the end of the gas year.

To correct the problems, CGC has hired a director of corporate planning. She is presented with a conceptual design for an information system that will help analyze gas supply and demand. The system will provide a monthly gas plan for the next five years, with particular emphasis on the first year. The plan will provide detailed reports that assist in the decision- making process. The system will use actual data during the year to project demand for the year. The president has indicated that she will base her decisions on the effect alternative plans have on operating income.

Assignment Requirements

1. Discuss the criteria to consider in specifying the structure and features of CGC's new system.

3 Harvard Style references and diagrams and tables clearly labelled and explained.

700 words are required.

Reference no: EM131055375

Questions Cloud

Merger-acquisition and international strategies : Choose two (2) public corporations in an industry with which you are familiar - one (1) that has acquired another company and operates internationally and one (1) that does not have a history of mergers and acquisitions and operates solely within ..

How capitalist is our economic system today : How capitalist is our economic system today?

Write report on customer service comparison project-walmart : Prepare a report on CUSTOMER SERVICE COMPARISON PROJECT-WALMART.

Design secure wireless networks : Determine and explain the steps by which you can create a secure wireless CCTV system from Raju's phone - Draw a diagram of the setup.

Specifying the structure and features of cgc new system : Citizen's Gas Company (CGC) provides natural gas service to 200,000 customers. Discuss the criteria to consider in specifying the structure and features of CGC's new system

What is a pricing strategy and how do i pick one : What is a pricing strategy and how do I pick one?

What needs to be improved at each given location : What is good at each location? What needs to be improved at each location? Why it needs to be improved? How changes will be measured?

Practice of strategic hrm in organisations : Assessment 3 gives you the opportunity to apply theory and research in a practical way by critically analysing the practice of strategic HRM in organisations. You have three options to choose from in this assessment task. Prepare a report that ans..

What does the federal reserve do to contract the economy : Based on your research, recommend changes in your organization's competitive strategies or supply chain.

User Account

All Pages