The Shenti Company Ltd is a private healthcare provider operating across the United Kingdom. The private healthcare industry in the UK is now estimated to be around £1.1bn per year and Shenti are one of the major providers in the UK.
You have joined Shenti Ltd as a management accountant. Wendy has been impressed with your performance so far and she has asked you to write a report to link your understanding of theory to the issues she is currently facing at Shenti Ltd. Include in your report:
1. A Critical evaluation of how Shenti Ltd should analyse its performance. Include in your discussion:
a. How the external environment impacts on the performance and how this should be taken into account.
b. The use of ROI (Return on Investment) as a measure.
c. Ideas for performance improvement including a critical review of the choice of routine operations or cosmetic operations.
d. Could a reward scheme be offered to staff to help them generate income.
2. Advise Wendy what methods of control are available for her to use to ensure her offsite staff continue to work and show commitment to the organisation.
3. Using a cost-plus pricing approach calculate the potential selling price of the three new cosmetic treatments if a markup of 20% is required. Discuss whether the use of target costing could be beneficial for Shenti Ltd in light of the knowledge of the competitors pricing. Suggest what pricing strategy Wendy can use for these new treatments.
