Areva

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Publié le : jeudi 21 juillet 2011
Lecture(s) : 550
Nombre de pages : 10
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Case Analysis: AREVA
Daphnée Hus - Elodie Ragot - Hélène Falipou - MaïtéSaulnier - Nicolas Janin
AREVAprovides solutions for CO2 free electricity generation, transmission and distribution
Outline:
I. II.
Areva as a whole Fuel Fabrication: rods assembly line 1/10
I. 1)
I. 2)
Simplified balance Sheet, 1stSemester 2007
In millions of euros ASSETS Goodwill Property, plant and equipment and intangible assets
Assets earmarked for end-of-life-cycle operations Investments in associates Other non-current financial assets
LIABILITIES AND EQUITY Equity Provisions for end-of-life-cycle operations Other provisions (including net deferred tax liabilities)
Net working capital requirement Put option held by Siemens Net debt (excluding Siemens put)
Simplified balance sheet total
Net debt (including Siemens’ put) Net debt (excluding Siemens’ put)
 
       
   
         
6/30/07  2 602
5 265 5 205 1 474 2 685   7 288 4 680 3 401 298 1 117 448  17 232  -1 565 -448
12/31/06
2 515 4 988 5 077 1 521 2 376
7 016 4 585 3 274VARI 1 71316760A T%ION: -251
16 478
-865
251
working capital = net balance of operating uses and sources of funds
 If WCR>0: uses of funds exceed sources of funds, if WCR<0: sources of funds higher than uses
 WCR<0corresponding to a net use of customer advances and prepayments
3/10
II. 1)
Caps
Fu
Research  and Development
Developing
 Marketing  and sales
Make to order
 Design
Adaptation to c
Market decisions: Price setter Long-run pricing High quality/High price
 Supply
Internal suppliers
tomers’ needs
Skeleton
Fuel rods
 PRODUCTI
 Distributio
Cost object
Pull production
Core p ocess
Product-life cycle: Maturity
 Customer  service
4/10
II. 2)
Example of product costs: raw materials (skeleton, caps, tubes, nuclearDirect materials: fuel…) Direct labour: people who work more than 75% in production (workers of the production process line) Manufacturing overheads:
Costs
Indirect material: paper, gloves to protect workers… Indirect labour: employees from maintenance of machinery… Indirect manufacturing expenses: lighting, heating and insurance…
Example of period costs: marketing and sales, accounting…
Variability of costs: Fixed costs: salary, maintenance… Variable costs: row materials…
5/10
II. 3)
ABC system Costing system Job-costing :Each fuel assembly has its own characteristics and is unique, ABC :- More details and focuses on activities and cost drivers  - Talks the language of the organization
Hierarchy
Unit-level
Batch-related
Product-sustaining
Facility-sustaining
Examples
Assembling a fuel assembly
Setting up machines to control the level of uranium enrichment
Processing a purchase order (fuel assemblies with the same uranium enrichment) Designing the fuel rods (length, soldering) and the skeleton given the uranium enrichment
Renting the plant
Cost drivers Duration: Number of hours of direct labour Transaction: Number of set-ups
Transaction: Number of orders Duration: rod dNeuvmelboepr mofe npt houucrts 
Transaction: Number of square metres
6/10
II. 4)
Equivalent Unit ?
uel assembly 00 rods + 1 skeleton
We can count the number of components integrated at each stage of the process we can determine the cost of a product not yet finished without using the concept of EU Abnormal losses
Uranium loss
Normal losses Bad soldering (due to worker´s mistakes), Tube and cap losses (0,5% of tolerated losses due to suppliers)
7/10
II. 5)
Result ControlBudget limitation Graph results Information display, where everybody can see the results, the objectives and so on…
Responsibility centre Profit centre The fuel assemblies are sold to anoth branch of AREVA company
Cybernetic control system  Weekly meeting Feedback from the workers Continuous improvement polic
AN INFORMATION DISPLAY
Management Control
40 30 20 10 0
Week A
Week B
Week C
Week D
8/10
II. 6)
AREVA NC
REACTORS SECTOR
Bottom-up system
AREVA NP
EQUIPMENT SECTOR
DESIGN & SALES BU
Factory A
Factory B
Activity based budgeting:
Budgeting process
SECTOR
FUEL FACTURING BU
BFC
Factory C
AREVA T&D
NUCLEAR SERVICES SECTOR
ZIRCONIUM MANUFACTURING BU
Factory D
of the customers’orders for the next year.Estimation Estimation of resources needed
9/10
II. 7)
Relevant Costs
a second assembly line be created?Should
Qualitative aspects
Meeting of the customers’ needs
Changes in the labour organization
Meeting of the standards (nuclear regulation)
Modernity
Quantitative aspects = relevant costs Set-up costs oconsultancy firms obuilding firms onew equipments
Operating costs odirect labour (new workers) ofactory overheads (electricity…) odirect materials oproductivity (cost per unit)
In the fuel assembly factory, old machines are not allowed to be resold after use (remaining radiation) No disposal value
10/10
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