Tactical Decision Making

Tactical decision making consists of choosing among alternatives with an immediate

or limited end in view

Thus, some tactical decisions tend to be short-run in nature. However, it should be

emphasized that short-run decisions often have long-run consequences

Tactical decisions are often small-scale actions that serve a larger purpose.
The overall objective of strategic decision making is to select among alternative strategies so that a
long-term competitive advantage is established. Tactical decision making should support this overall
objective, even if the immediate objective is short-run (accepting a one-time order to increase
profits) or small-scale (making instead of buying a component). Thus, sound tactical decision making
means that the decisions made not only achieve the limited objective but also serve a larger
purpose. In fact, no tactical decision should be made that does not serve the overall strategic goals of
an organization.

What Should
I do?
Model for Making Tactical
Decision Recognize and define the problem

Identify the alternatives

Identify the Costs and Benefits Associated with Each Feasible

Alternative
How does a company go about making good
tactical decisions? these are 6 steps describing
the recomended decision making process:
Total the Relevant Costs and Benefits for Each Feasible Alternative

Assess the Qualitative Factors

Make the Decision

Relevant Cost Difined

Relevant costs are future costs that differ across alternatives. All decisions relate to
the future; accordingly, only future costs can be relevant to decisions.

However, to be relevant, a cost must not only be a future cost but must also differ from one
alternative to another. If a future cost is the same for more than one alternative, it has no
effect on the decision. Such a cost is an irrelevant cost. The ability to identify relevant and
irrelevant costs is an important decision-making skill
Relevant Cost Irrelevant Cost

Oportunity Cost Sunk Cost

Opportunity Cost Opportunity cost is the

A sunk cost is a cost that cannot be affected by
benefit sacrificed or foregone when one
any future action.
alternative is chosen over another
An opportunity cost is relevant because it is Although we allocate this sunk cost to future
both a future cost and one that differs across periods and call that allocation depreciation,
alternatives. none of the original cost is avoidable.
An opportunity cost is never an accounting cost. Sunk costs are past costs. They are always the
Accountants do not record the cost of what same across alternatives and are, therefore,
might happen in the future always irrelevant

It is an important consideration in decision

making.
 Make or
Buy
Decision

Decision to
Relevant Keep or
Sell or
Cost Drop
Process
Applications Decision
Further

Special
Order
Decision
Relevan Cost Aplications
(Continues)

Make or Buy Decision

Managers are often faced with the decision of whether to make

or buy components used in manufacturing.Ofcourse management
periodically should evaluate past decisions concerning production

Make-or-buy decisions are those decisions involving a choice

between internal and external production.
Make or Buy Decision
Mbak Fitri sedang di hadapi masalah untuk membuat keputusan, ada pesanan untuk membuat
10 baju untuk kegiatan presentansi kelas, namun setelah dilakukan perhitungan menghasilkan
hasil seperti berikut:

Make Total Buy Total

Bahan Baku 1.000.000 Harga Beli 1.500.000
Tenaga Kerja 300.000
Overhead 100.000
Total Biaya Produksi 1.400.000
Relevan Cost Aplications
(Continues)

Keep or Drop Decision

Often, a manager needs to determine whether or

not a segment, such as a product line, should be
kept or dropped.

Segmented reports prepared on a variable-costing

basis provide valuable information for these keep-
or-drop decisions.

Both the segment’s contribution margin and its

segment margin are useful in evaluating the
performance of segments
However, while segmented reports provide useful
information for keep-or-drop decisions, relevant
costing describes how the information should be
used to arrive at a decision.
 Keep or Drop Decision
Unit Bisnis Mbak Fitri mengahadapi pilihan apakah akan terus melanjutkan atau menghentikan
lini produksi yang ada
Jilbab Celana Kemeja
Penjualan 500.000 800.000 150.000
Dikurangi: beban variabel 250.000 480.000 140.000
Margin Kontribusi 250.000 320.000 10.000

Dikurangi beban tetap

langsung
Gaji 100.000 200.000 100.000
Total 100.000 200.000 200.000
Margin Segmen 150.000 120.000 (90.000)

Margin segmen: margin kontirbusi-total beban tetap langsung

Relevan Cost Aplications
(Continues)

Special Order Decision

Price discrimination laws require that firms sell

identical products at the same price to competing
customers in the same market

These restrictions do not apply to competitive bids or

to noncompeting customers.

Bid prices can vary to customers in the same market, and

firms often have the opportunity to consider special orders
from potential customers in markets not ordinarily served

Special-order decisions focus on whether a specially priced

order should be accepted or rejected. These orders often can be
attractive, especially when the firm is operating below its
maximum productive capacity.
Special Order
Mbak Fitria sedang dihadapai special order disaat kapasitas produksinya masih tersisa 20 buah
untuk membuat jilbab. Memiliki kapasitas untuk menjual 100 jilbab. Pada kasus ini mbak fitriya
sudah menggunakan 80% kapsitasnya dengan biayanya berikut: dan nantinya harga jual standart
20.000 namun pada special order ini harganya menjadi 18.000
Biaya Variabel Harga Total Biaya per unit
Bahan Baku 1.000.000 12.500
Tenaga Kerja 300.000 3.750
Benang 100.000 1.250
Jarum 20.000 250
Total Biaya 1.420.000 17.750
Variabel
 Biaya Tetap Total Per unit
Gaji 100.000 1.250
Penyusutan 30.000 375
Lain-lain 10.000 1.250
Total Biaya Tetap 140.000 1.750
Total Biaya 1.560.000 19.500
Total Biaya: Total Biaya Variabel+Total Biaya Tetap=1.420.000+140.000=1.560.000

Menerima Menolak Perbedaan Keuntungan

Jika Menerima
Pendapatan 360.000 - 360.000
Bahan Baku (250.000) - (250.000)
Tenaga Kerja (75.000) - (75.000)
Benang (25.000) - (25.000)
Jarum (5000) - (5000)
Total 5000 0 5000

Kesimpulan: Perusahaan ini menerima pesanan khusus shingga menaikan laba sebesar 580.000, dibandingkan jika Kapasitas
Produksinya tidak digunakan
Relevan Cost Aplications
(Continues)

Decision to Sell or Process Further

Joint products have common processes and costs of production up to

a split-off point.

At that point, they become distinguishable as separately identifiable

products. The point of separation is called the split-off point Often,
joint products are sold at the split-off point. Sometimes, it is more
profitable

to process a joint product further, beyond the split-off point, prior to

selling it. Determining whether to sell or process further is an
important decision that a manager must make.
Decision to Sell or Process Further
Mbak Fitria dihadapkan dengan sitiasi dimana ia harus menjual atau memproses lebih lanjut kain
yang ia miliki. Ada bebrapa pertimbangan yang harus di lihat:

Memproses lebih lanjut Menjual Perbedaan jumlah jika

memproses lebih lanjut
Pendapatan 300.000 150.000 150.000
Biaya Pemrosesan 50.000 50.000
Total 250.000 150.000 100.000

Dari situasi tersebut mbak fitria lebih memilih untuk memprosess lebih lanjut kain yang dia miliki, karena lebih
menguntungkan untuk di rposes lebih lanjut dibandingkan dengan langsung dijual.
Product Mix Decision

Product Mix Decision

Many organizations have total discretion in choosing their product

mix. Moreover, decisions about product mix can have a significant
impact on an organization’s profitability

Each mix represents an alternative that carries with it an associated

profit level. A manager should choose the alternative that maximizes
total profits

Unfortunately, every firm faces limited resources and limited demand

for each product. These limitations are called constraints. A manager
must choose the optimal mix given the constraints found within the
firm.
One of the more difficult decisions faced by a company is
pricing
 Pricing
(Continues)

Cost Based Pricing

Demand is one side of the pricing equation; supply is the

other side. Since revenue must cover cost for the firm to
make a profit, many companies start with cost to
determine price

That is, they calculate product cost and add the desired
profit. The mechanics of this approach are straightforward.
Usually, there is some cost base and a markup.

The markup is a percentage applied to the base cost, it

includes desired profit and any costs not included in the
base cost. Companies that bid for jobs routinely base bid
price on cost.
Mbak Fitriya akan menjual 5 piecis pakaian muslimah dengan menginginkan laba sebesar 10%
dengan rincian biaya sebagai berikut :

Biaya bahan baku 1.000.000

Biaya tenaga kerja 300.000

Overhead 100.000

Total biaya 1.400.000

Harga jual total 1.540.000

Harga setiap 1 piecis 308.000

Keterangan :
Harga jual total = 1.400.000 + (10% x 1.400.000)
Harga 1 piecis = 1.540.000 / 5
Harga 1 unit = 308.000
 Pricing
(Continues)

Target Costing and Pricing

Target costing is a method of determining the cost of ab

product or service based on the price (target price) that
customers are willing to pay.

Target costing involves much more up-front work than

cost-based pricing

Target costing can be used most effectively in the design

and development stage of the product life cycle. At that
point, the features of the product, as well as its costs, are
still fairly easy to adjust.
CASE
Describe the decision to be made by Tidwell. Is
it a strategic or tactical decision?

Berdasarkan opini dari kelompok kami, keputusan yang di ambil lebih mengarah ke tactical
decision. Dikarenakan itu keputsuan secara langsung dan untuk tujuan jangka pendek, sehingga
termasuk dalam tactical decision.
 What costs do you think Leo is referring to in the
last paragraph of the scenario? Give examples.
Biaya yang leo fikirkan dari paragraph terakhir adalah relevan cost, relevant cost adalah biaya yang memiliki
biaya masa depan (yang akan datang) yang berbeda dari alternatif yang ada.
Pada Alternatif 1
-Variabel Production Cost 2.000.000
-Sewa Gedung 1.000.000
Total 3.000.000

Pada Alternatif 2
Membeli Componen di Pasar 5.000.000
Assume Tidwell Products accepts Linda’s first alternative.
Are there any noncost factors that should be
considered? What about her second alternative?
Alternatif 1
-Kestabilan Harga
-Hubungan Kerja dengan pelanggan karena Tidwell dapat memberikan barang yang berkualitas tinggi

Alternatif 2
-Kualitas Barang yang dibeli pada Pasar apakah sama dengan yang diproduksi
-Keyakinan atas Exsternal Supplier yang memasok barang
-Kestabilan Harga
-Hubungan Kerja dan Wajah di Komunitas