Jamaan Argo Truck Lines

LONG-AND SHORTHAUL TRUCKING

SERVICES

Company Background

J amaan Ar go Tr uck Li nes, I nc. , a medi um- si zed common car r i er based i n
Buki t t i nggi , Andal as I sl and, pr ovi des over - t he- r oad t r anspor t at i on
ser vi ces i n t he West er n I ndonesi a. Tr uck t er mi nal s ar e st r at egi cal l y
si t uat ed, one or t wo dr i vi ng days apar t , i n Buki t t i nggi ; Pakanbar u,
J ambi ; Medan, Aceh; Pal embang, J akar t a; and Semar ang, Sur abaya. The
company of f er s t wo mai n t ypes of ser vi ces t o i t s cust omer s: st andar d
and shor t - haul ser vi ces. The st andar d ser vi ce i ncl udes pi ck- up of goods
at one of i t s mai n t r uck t er mi nal s and shi pment ei t her t o anot her of
i t s own t er mi nal s or t o a t er mi nal oper at ed by anot her maj or car r i er .
Shor t - haul ser vi ce i nvol ves pi ck- up f r omor del i ver y t o speci f i c
l ocat i ons ot her t han f ul l y- equi pped t r uck t er mi nal s. Cust omer s t hat
desi r e " our dock t o t hei r dock" ser vi ce, f or di st ances of mor e t han
about one hundr ed mi l es, cont r act f or t he combi nat i on of t he st andar d
and t he shor t - haul ser vi ce.

J amaan Ar go Tr uck Li nes was f ounded i n 2009 and i ni t i al l y exper i enced
r api d gr owt h. However , der egul at i on of t he t r ucki ng i ndust r y caused
gr owt h t o sl acken dur i ng t he ear l y 2020s, due t o i ncr eased compet i t i on
on t he most l ucr at i ve r out es. I n 2023, t he company near l y f ounder ed i n
an i ndust r y shakeout t hat f or ced a number of J amaan Ar go' s l ess
successf ul compet i t or s out of busi ness. I n t he wake of t hi s shakeout , a
l ean, mean i ndust r y has emer ged. J amaan Ar go' s sal es have r ecover ed,
wi t h subst ant i al i ncr eases f or t hr ee consecut i ve year s, and t he pr esent
r at e of gr owt h appear s t o be sust ai nabl e t hr oughout t he 2030s.

Two year s ago, 60 per cent of J amaan Ar go Tr uck Li ne s out st andi ng
common st ock was acqui r ed by a congl omer at e; GKQ I ndust r i es, I nc. GKQ
al so owns sever al maj or manuf act ur i ng f i r ms, a "t hi r d- par t y" equi pment
r epai r company, a chai n of mi ni war ehouses, anot her t r ucki ng company
based i n Bengkul u, and smal l compani es i n a var i et y of i ndust r i es. The
mer ger of f er ed some pr ef er ent i al haul age busi ness t o J amaan Ar go, but
ot her wi se, GKQ deci ded t o al l ow J amaan Ar go t o oper at e as an
i ndependent , separ at el y i ncor por at ed subsi di ar y. Most i mpor t ant l y, i t
l ef t J amaan Ar go' s management t eami nt act . Ther e i s specul at i on t hat at
some t i me i n t he f ut ur e, J amaan Ar go may be mer ged wi t h t he Tg Kar ang
t r ucki ng company, but a vi ce- pr esi dent of GKQ r ecent l y st at ed t hat no
act i on al ong t hese l i nes woul d be t aken f or at l east t hr ee year s.

Management ' s near - t er mgoal i s t o consol i dat e i t s success and
demonst r at es t o t he new cor por at e par ent t hat J amaan Ar go i s wel l
equi pped t o do busi ness i n t r ee moder n i ndust r i al envi r onment . One of
J amaan Ar go' s i mmedi at e pl ans i s t o upgr ade i t s i nf or mat i on syst em.


Major Company Resources

J amaan Ar go' s maj or i nvest ment s ar e i n i t s f i xed t er mi nal f aci l i t i es
and i t s t r act or t r ai l er r i gs. J amaan Ar go Tr uck Li ne' s mai n f aci l i t y i n
Buki t t i nggi i ncl udes t he cor r el at e of f i ces, admi ni st r at i ve
headquar t er s, sal es and schedul i ng cent er and dat a- pr ocessi ng cent er .
I n addi t i on, t he Buki t t i nggi f aci l i t y houses t he mai n t r uck t er mi nal , a
cent r al t r uck ser vi ce and r epai r shop, and a war ehouse cont ai ni ng a
depr eci abl e i nvent or y of spar e par t s and suppl i es, whi ch ar e di spat ched
as needed t o t he r egi onal t er mi nal s. Each t r uck t er mi nal consi st s of
l oadi ng f aci l i t i es a gar age uni t f or r out i ne t r uck mai nt enance, r est
f aci l i t i es f or dr i ver s, and an admi ni st r at i ve of f i ce. Ter mi nal s oper at e
ar ound t he cl ock, on t hr ee shi f t s, t o ensur e t he ef f i ci ent l oadi ng and
unl oadi ng of f r ei ght and qui ck t r uck t ur n- ar ound.

J amaan Ar go' s mai n goal - and i ndeed t hat of t he whol e t r ucki ng
i ndust r i es- i s t o maxi mi ze i t s equi pment ut i l i zat i on. The company woul d
l i ke t o keep i t s t r uck on t he r oad, car r yi ng f ul l l oads ever y day of
t he year . Company pol i cy i s t o keep i t s t r act or s no mor e t han t hr ee
year s, and cur r ent l y, t he aver age age i s about f our t een mont hs. The
r api d t ur nover of t r act or s ensur es good r el i abi l i t y and mi ni mi zes
mai nt enance expenses. Fur t her mor e, t he r esal e pr i ce of a t hi r t y- si x-
mont h- ol d t r uck i s st i l l r el at i vel y hi gh.

Bot h t he t r act or cabs and t he t r ai l er s ar e number ed t o f aci l i t at e
r ecor dkeepi ng. Det ai l ed r ecor ds ar e kept f or each t r act or and t r ai l er ,
l i st i ng dat e and cost of acqui si t i on, depr eci at i on char ges, ser vi ce
down t i me, acci dent s, maj or and mai nt enance and r epai r s per f or med, and
cor r espondi ng odomet er r eadi ngs. Accel er at ed depr eci at i on i s used f or
bot h t ax and f i nanci al r epor t i ng t o achi eve qui ck cost r ecover y.

Anot her si gni f i cant company i nvest ment i s i n human r esour ces. J amaan
Ar go at t r act s good dr i ver s and mechani cs by of f er i ng st abl e empl oyment
and bet t er t han- aver age f r i nge benef i t s. Sever al dr i ver s have been wi t h
t he company si nce st ar t ed, and many mor e have at l east t en year ' s
seni or i t y. Two dr i ver s ar e nor mal l y assi gned t o t he l onger r uns, so
t hat one can r est whi l e t he ot her cont i nues t o dr i ve. Husband- and- wi f e
dr i ver t eams ar e especi al l y wel come at J amaan Ar go, and a number of
empl oyees have opt ed f or t hi s l i f est yl e. Mi l eage and l ayover pay f or
dr i ver s ar e gener al l y i n l i ne wi t h uni on- negot i at ed r at es t hr oughout
t he i ndust r y. Dr i ver s ar e guar ant eed 10, 000 mi l es per mont h, and most
aver age 16, 000 t o 20, 000 mi l es per mont h. Hour l y wage r at es f or ot her
no sal ar i ed empl oyees, such as l oader s, mechani cs, and st udent dr i vi ng
i nst r uct or s, ar e al so i n l i ne wi t h i ndust r y- wi de uni on r at es. The
company pays al l pr emi ums f or i t s no sal ar i ed empl oyees' heal t h
i nsur ance, and f i ve year s ago, i t est abl i shed a noncont r i but or y
r et i r ement pl an f or bot h no sal ar i ed and sal ar i ed per sonnel .

The company pl aces consi der abl e emphasi s on t he qual i t y of i t s dr i ver s
and ser vi ce per sonnel , and J amaan Ar go' s t r ai ni ng pr ogr ams ar e t he envy
of t he i ndust r y. Appl i cant s f or dr i ver posi t i ons must be at l east
t went y- t hr ee year s ol d, have had a mi ni mumof one year ' s ver i f i abl e
t r act or - t r ai l er exper i ence i n t he pr evi ous t hr ee year s, and have a good
dr i vi ng and saf et y r ecor d. Mor eover , al l appl i cant s must agr ee t o meet
al l company and Depar t ment of Tr anspor t at i on r equi r ement s, i ncl udi ng
r out i ne al cohol and dr ug t est i ng. New dr i ver s ar e gi ven an i nt ensi ve
t hr ee- week t r ai ni ng pr ogr ami n whi ch, under super vi si on, t hey dr i ve
each t ype of t r uck, car r y a r epr esent at i ve sampl e of l oads, and vi si t
al l of t he company' s t er mi nal s. Mechani cs wi t hout t r uck exper i ence wor k
al ongsi de l ong- t er mempl oyees and may al so be r equi r ed t o at t end
cl asses on t r uck mai nt enance at l ocal t echni cal school s. Af t er si x
mont hs, t hey ar e gi ven a cer t i f i cat e at t est i ng t o t hei r compl et i on of
t r ai ni ng, and t hey al so r ecei ve a Rp 2. 00 per hour r ai se.

Al t hough t he cost of t r ai ni ng i s r el at i vel y hi gh, t he i nvest ment has
r esul t ed i n hi gher f i xed- asset ut i l i zat i on, l ower r epai r cost s, and
f ewer acci dent s par t i cul ar l y ser i ous acci dent s- t han ar e r epor t ed by
most of t he company' s compet i t or s. Each J ul y, a Saf et y and Per f or mance
Bonus i s gi ven t o al l dr i ver s who have compl et ed a year of acci dent -
f r ee dr i vi ng. Pr ogr essi vel y hi gher bonuses ar e awar ded t o dr i ver s wi t h
t wo or mor e acci dent - f r ee year s. The human resource management system
requires detailed records on each employee. For example, the records
for drivers include years of experience, absentee rate, accident
record, traffic citations, and average times taken for principal
r out es.

Management Structure

J amaan Ar go' s management and admi ni st r at i ve st r uct ur e i s cent r al i zed,
and al l st r at egi c, t act i cal , and maj or oper at i ng deci si ons ar e made at
t he Buki t t i nggi headquar t er s. The pr esi dent and son of t he f ounder ,
J ames B. Oppenhei mer I I , makes al l maj or deci si ons, whi l e day- t o- day
oper at i ons ar e del egat ed t o t he Vi ce- Pr esi dent and Gener al Manager ,
Roger W. Sut an . Sut an over sees t he wor k of t he cor por at e sal es
manager , manager of oper at i ons, cont r ol l er , and head of dat a
pr ocessi ng. Al l pur chasi ng, bi l l i ng, col l ect i ons, payr ol l , gener al
account i ng, and t ax account i ng act i vi t i es ar e super vi sed by t he
cont r ol l er . The t ot al headquar t er s admi ni st r at i ve payr ol l i ncl udes
sevent y- f i ve peopl e. Twent y l oader s and ei ght mechani cs ar e empl oyed at
t he Buki t t i nggi t er mi nal f aci l i t y. Al l dr i ver s ar e assi gned t o
headquar t er s, even t hough t hey may spend most of t hei r t i me r out es
bet ween r egi onal t er mi nal s.

The r egi onal t er mi nal s i n Pakanbar u, Medan, Pal embang, and Semar ang
eval uat ed as cost cent er s. Thei r manager s ar e r esponsi bl e pr i mar i l y f or
l ocal sal es and schedul i ng, ef f i ci ent oper at i on of t he t er mi nal s, and
r out i ne t r uck mai nt enance I n addi t i on t o t he t wo sal esper sons, each
t er mi nal has a f ul l - t i me st at f f of t hr ee shi f t super vi sor s, t wel ve
l oader s, seven mechani cs, and f i ve of f i ce per sonnel . Nor mal l y, t hr ee
mechani cs ar e on dut y dur i ng t he day shi f t , but onl y one i s on dut y
dur i ng t he swi ng and gr ave- yar d shi f t s. Mechani cs ar e assi gned t o t he
ni ght shi f t s i n r ot at i on; t hey wor k t wo weeks on each ni ght shi f t and
t hen ar e al l owed t hr ee days of f t o adj ust t hei r sl eep r out i nes. Of f i ce
per sonnel onl y wor k dur i ng t he day shi f t : 7: 30 A. M. t o 4: 30 P. M. , wi t h
one hour f or l unch.

Marketing and Price Policies

J amaan Ar go Tr uck Li nes mar ket s i t s ser vi ces pr i mar i l y t hr ough
sol i ci t at i ons by i t s own sal es f or ce, suppor t ed by r egi onal and l ocal
adver t i si ng. Twel ve sal es per sons ar e assi gned t o t he Buki t t i nggi
f aci l i t y and t wo ar e assi gned t o each of t he t er mi nal s. Pr omot i on i n
t r ade and busi ness j our nal s and t el ephone Yel l ow Paper i s handl ed by an
adver t i si ng agency i n Andal as I sl and . I n addi t i on, appr oxi mat el y 25
per cent of t he company' s busi ness r esul t s f r omexi st i ng cust omer
r ef er r al s, i ndependent shi ppi ng agenci es, ot her t r ucki ng compani es, and
r ecent l y- ot her GKQ subsi di ar i es.

St andar d ser vi ces bet ween t he company' s t er mi nal s ar e bi l l ed at a f i xed
r at e per t r uck- mi l e. I n or der t o achi eve a hi gh ut i l i zat i on f act or f or
i t s t r ucks, t he company' s goal i s t o oper at e onl y f ul l y l oaded t r ucks.
Nor mal l y, t he depar t ur e of a t r uck wi l l be del ayed i f anot her shi pment
i n t he pi pel i ne can be consol i dat i ng wi t h an exi st i ng par t i al l oad.
However , cust omer s can pay a sur char ge t hat ensur es i mmedi at e depar t ur e
of a par t i al l oad. Shor t - haul ser vi ces ar e bi l l ed at a var i abl e r at e
per t on- mi l e t hat depends on t he nat ur e of t he l oad, ease of access t o
t he pi ck- up and del i ver y l ocat i ons, r equest ed schedul e, and whet her t he
t r uck must t r avel empt y on t he out goi ng or r et ur n t r i p. A 15 per cent
di scount i s gi ven f or ei t her st andar d or shor t - haul ser vi ces t o
cust omer s who pl ace mor e t han Rp 500, 000 wor t h of shi ppi ng busi ness
wi t h J amaan Ar go i n any gi ven year . Total billings are maintained in a
subsidiary shipping ledger, and any earned discount comes in the form
of a year-end rebate.

Information Processing Facilities and Procedures

Cur r ent l y, t he account s r ecei vabl e, account s payabl e, payr ol l , and
gener al l edger syst ems ar e aut omat ed. On t he ot her hand, pr epar at i on of
dr i ver s' mani f est s and r epor t s, and mai nt enance of i nvent or y, f i xed-
asset , and per sonnel r ecor ds ar e per f or med manual l y.

Al l comput er i zed pr ocessi ng i s per f or med i n a bat ch mode, usi ng a 32-
bi t mi ni comput er acqui r ed r oughl y t went y year s ago. The comput er has
4GB of mai n memor y and 500 GB of har d di sk st or age. The cent r al
pr ocessor suppor t s f our i nput wor k st at i ons, t wo l i ne pr i nt er s, and a
CD dr i ve at t he Buki t t i nggi headquar t er s and one CD dr i ve at each of
t he r egi onal t r uck t er mi nal s f or r emot e j ob ent r y. Backup of t he har d
di sk t o ext er nal har d di sks i s per f or med dai l y at t he cent r al si t e. The
comput er i s f ai r l y sl ow, and, at key t i mes dur i ng t he mont h, i t i s
unabl e t o keep up wi t h t he pr ocessi ng backl og. As t he comput er
equi pment has aged, t he pr obl emhas been compounded by excessi ve down
t i me f or r epai r s and mai nt enance.

Cust omer or der s ar e r ecor ded on paper shi ppi ng or der f or ms t hat pr ovi de
t he i nput t o bot h t he bi l l i ng and t he schedul i ng f unct i ons. Shi ppi ng
r at es ar e ent er ed f r omt abl es t hat l i st each cat egor y of cust omer and
each t ype of l oad. Sal es i nf or mat i on i s keyed i nt o t he comput er t o
i ni t i at e t he bi l l i ng f unct i on, and det ai l s of t he cust omer s, l oads,
dest i nat i ons, and r equi r ed del i ver y dat es ar e t el ephoned t o per sonnel
at t he t r uck t er mi nal s af f ect ed. Tr uck depar t ur e dat es and t i mes ar e
mut ual l y agr eed upon by t he schedul er s at headquar t er s and t he shi f t
super vi sor s at t he r egi onal t er mi nal s. Copi es of t he shi ppi ng or der s
ar e sent t o conf i r mt he t el ephone i nf or mat i on, and t hey gener al l y
ar r i ve wi t hi n t wo t o t hr ee days.

The per sonnel r esponsi bl e f or schedul i ng ar e al l exper i enced and have a
good f eel f or t he t r ucks' cur r ent l ocat i ons and f ut ur e avai l abi l i t y.
Mi ndf ul of t he cost of dr i vi ng empt y t r ucks f r omone l ocat i on t o
anot her , t hey gener al l y do a good j ob of maxi mi zi ng t r uck ut i l i zat i on.
However , wi t h t he expansi on of busi ness and t he i ncr ease i n t he number
of t r ucks on t he r oad, t hey f i nd t he t ask i ncr easi ngl y di f f i cul t . At
pr esent , t he onl y har d dat a t hey have ar e copi es of t he shi ppi ng or der s
t hat have al r eady been i ssued.

The dr i ver ' s mani f est i s pr epar ed manual l y by t he shi f t super vi sor ,
usi ng dat a f r omt he shi ppi ng or der f or m. I t l i st s t he nat ur e and wei ght
of t he l oad, a det ai l ed l i st of t he cont ent s, t he dest i nat i on, t he dat e
of di spat ch and r equi r ed del i ver y dat e, and any speci al del i ver y
i nst r uct i ons. The dr i ver si gns t he mani f est at t he st ar t of t he t r i p t o
acknowl edge r esponsi bi l i t y f or t he l oad. The dr i ver i s al so pr ovi ded
wi t h a bl ank dr i ver ' s r epor t f or m( see Exhi bi t 1) , whi ch must be t ur ned
i n at t he dest i nat i on poi nt . The r epor t l i st s t he t r uck number , t he
dat es of t he t r i p, and t he begi nni ng and endi ng odomet er r eadi ngs and
i t i t emi zes expenses f or l odgi ng and subsi st ence i ncur r ed by t he
dr i ver . Fuel i s pai d f or usi ng a company cr edi t car d, but dr i ver s ar e
expect ed t o pay f or ot her expenses and be r ei mbur sed l at er . I n addi t i on
t o t he dr i ver ' s r epor t , whi ch i s compl et ed af t er ever y t r i p, each
dr i ver al so submi t s an end- of - week t i me r epor t l i st i ng t he t r i ps made
and t he dr i vi ng t i mes f or t he seven- day per i od.

Dr i ver s ar e r esponsi bl e f or checki ng t i r e pr essur es and wat er and oi l
l evel s bef or e st ar t i ng out on a t r i p. I f a t r uck br eaks down on t he
r oad, t he dr i ver i s r esponsi bl e f or get t i ng emer gency hel p, ei t her f r om
a l ocal t r uck ser vi ce st at i on or , i f possi bl e, f r omt he near est company
t r uck t er mi nal . Upon r eachi ng t he dest i nat i on, t he dr i ver must compl et e
a r epor t i ndi cat i ng t he pr obl emand t he st eps t aken t o r emedy i t .
Si mi l ar l y, i f a t r uck i s i nvol ved i n an acci dent , t he dr i ver must
compl et e a r epor t descr i bi ng t he nat ur e of t he acci dent , t he damage
sust ai ned, and t he r esponsi bi l i t y f or t he acci dent . A copy of t he
acci dent r epor t i ssued by t he at t endi ng pol i ce of f i cer must be
at t ached.

Schedul ed r out i ne mai nt enance i s per f or med by mechani cs at any of t he
t er mi nal s. Maj or over haul s, whi ch ar e nor mal l y schedul ed af t er ever y
200, 000 mi l es, ar e per f or med at t he mai n t er mi nal i n Buki t t i nggi .

Required

Systems Planning

1. Devel op a l ong- t er mpl an f or meet i ng J amaan Ar go Tr uck Li nes'
i nf or mat i on pr ocessi ng needs. The mai n pl an- whi ch shoul d ext end over a
t went y- year t i me hor i zon- shoul d pr ovi de f or gr owt h at 10 per cent per
year , and t he openi ng of one new t r uck t er mi nal ever y f i ve t o si x
year s. The l ong- t er mpl an shoul d be br oken down i nt o a ser i es of f i ve-
year pl ans.

As an addendumt o your pl an, br i ef l y di scuss t he i mpact of a mer ger
wi t h t he ot her t r ucki ng company owned by GKQ. ( Assume t hat at t he t i me
of t he mer ger , t he ot her company i s one- hal f t he si ze of J amaan Ar go. )

2. To what ext ent coul d t r uck schedul i ng be i mpr oved by aut omat i on?

Can schedul i ng be consi der ed an account i ng pr obl em?

3. At pr esent , communi cat i on of shi ppi ng or der s t o t he r egi onal t r uck
t er mi nal s t akes sever al days, whi ch, among ot her t hi ngs, hi nder s
Exhibit 1
Drives Report

ef f i ci ent schedul i ng. I dent i f y and eval uat e al t er nat i ve comput er i zed
syst ems t o pr ovi de f or :

( a) On- l i ne communi cat i on of shi ppi ng or der s and ot her dat a f r om
Buki t t i nggi t o t he r egi onal t er mi nal s.

( b) On- l i ne capt ur e of dr i ver s' r epor t s and ot her dat a f r omt he
r egi onal t er mi nal s.

( c) Moni t or i ng of t r uck l ocat i on, r epor t i ng of shi pment st at us, and
not i f i cat i on of br eakdowns and acci dent s.

4. What t ype of comput er syst emwoul d you r ecommend J amaan Ar go adopt
t o accommodat e t hei r var i ous i nf or mat i on pr ocessi ng r equi r ement s f or
t he next sever al year s? Your r ecommended syst emshoul d f i t i nt o t he
f r amewor k of t he l ong- r ange pl an def i ned i n Exer ci se 1. Descr i be your
syst emi n det ai l and def end i t agai nst ot her f easi bl e syst ems t hat
mi ght be pr oposed, but do not speci f y har dwar e or sof t war e br and names.

Systems Design

5. Assume t hat J amaan Ar go Tr uck Li nes deci des t o aut omat e t he
pr ocessi ng of dr i ver s' mani f est s and r epor t s, and t he mai nt enance of
f i xed asset and per sonnel r ecor ds.
( i ) Pr epar e Concept ual ent i t y Rel at i onshi p Model and conver t i nt o
physi cal dat abase desi gn model
( i i ) Desi gn dat abase t abl e based on physi cal dat abase desi gn model
( i i i ) desi gn i nput scr een f or ms t o st or e at l east t he f ol l owi ng
i nf or mat i on:
( a) Dat a f r omdr i ver s' r epor t s.
( b) Dr i ver per sonnel r ecor ds.
( c) Tr uck f i xed- asset r ecor ds.

The scr een f or ms ar e t o be i mpl ement ed on an i nt er act i ve comput er
syst emand may i ncl ude dat a r et r i eved f r oma f i l e i n r esponse t o
keyboar d ent r i es. For exampl e, a dr i ver ' s name may be r et r i eved and
di spl ayed on t he scr een i n r esponse t o t he ent r y of hi s or her empl oyee
number . Be sur e t o i ncl ude det ai l s of any changes i n t he f or moccur r i ng
at br anch poi nt s i n t he i nt er act i ve di al ogue. I n par t i cul ar , a
di agnost i c message shoul d be di spl ayed upon ent r y of i nval i d dat a.

6. Desi gn out put r epor t s pr ovi di ng t he f ol l owi ng t ypes of i nf or mat i on
and i ncl ude t ot al s, wher e appr opr i at e. I n each case, al so i dent i f y t he
f i l e or f i l es f r omwhi ch t he i nf or mat i on coul d be r et r i eved.

( a) Weekl y shi ppi ng det ai l r epor t , showi ng:
Tr i p, depar t ur e, and dest i nat i on
Type of ser vi ce ( st andar d or shor t - haul )
Char ges and r evenue gener at ed
Request ed and act ual pi ck- up dat e
Request ed and act ual del i ver y dat e

( b) Mont hl y t r uck depr eci at i on and mai nt enance r epor t , showi ng:

Tr uck number and descr i pt i on Dat e of acqui si t i on
Acqui si t i on cost , accumul at ed depr eci at i on, and net book val ue
Ser vi ce and mai nt enance hour s and char ges ( I n- house wor k i s char ged at
a st andar d r at e. )
Ref er ence t o acci dent or br eakdown r epor t s

7. Devel op an i mpr oved met hod f or det er mi ni ng f r ei ght r at es. Pr epar e a
f or mt o t r ack f r ei ght char ges f or each cust omer so t hat di scount s can
be cal cul at ed.

Internal Controls

8. Last year , t he Pakanbar u t er mi nal ' s oper at i ng cost s st ar t ed t o r i se
si gni f i cant l y, r el at i ve t o t hose of ot her t er mi nal s. Upon i nvest i gat i on
by an i nt er nal audi t t eamf r omBuki t t i nggi , i t was di scover ed t hat t he
t er mi nal manager , Roger "Buck" Hendr i cks, and a payr ol l cl er k, Susan
Zor t heck, had cr eat ed sever al f i ct i t i ous empl oyees, submi t t ed
f r audul ent t i me car ds, and pocket ed t he paychecks. I t was l at er
det er mi ned t hat Hendr i cks and Zor t heck had been dat i ng and wer e mar r i ed
si x mont hs pr i or t o di scover y of t he pr obl em.

What i nt er nal cont r ol measur es wer e vi ol at ed i n t he i nci dent at t he
Pakanbar u t er mi nal ? For mul at e a company pol i cy t o deal wi t h t hi s t ype
of pr obl em.