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The Case Study #PetroCo Refinery Managers Face Budget Challenges-Assignment answers

The Case Study Assignment answers   #PetroCo Refinery Managers Face Budget Challenges

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Petroco company case study assignment answers

You work for PetroCo Company, a major international petroleum company, and you find yourself in a difficult position. As the budget coordinator for a large business unit made up of several key refineries, you have noticed that costs are rising so quickly that the refinery sites may soon become uncompetitive.

To begin getting costs under control, your team analyzes the budget and finds that a major component of refinery costs consists of an “overhead” allocation of costs from site services managers, as opposed to direct refinery costs. The site services managers provide an array of critical services to each refinery, such as central maintenance, storehouse services, security, HSE (health, safety, and environmental) services, human resources, and training/ development services. The costs of these services across the full business unit’s refineries are combined in a centralized cost center; that cost is subsequently allocated among the various refineries that use these services.

Your team knows that you must find a way to cut these allocated costs, so you decide to hold a meeting to talk with the site services managers about the budget and how it can be reduced so each refinery can maintain a competitive advantage as a site. Of course it is also important that refinery operations are safe and secure, so all of the services provided play an important role in the successful operation of the refineries. However, you need to find out from the site services managers what items can be cut or reduced while minimizing the impact on people and assets at the business unit level; and if certain items in the site services budget are true necessities, you need to have more information about what makes them critical to the business.

You have no direct control over the site services managers, although a component of their annual bonus comes from how well the various refineries perform, so you should think carefully about how you will ask them for information

The Assignment

Draft an e-mail to the site services managers scheduling a meeting to discuss the budget (alternatively, you may choose to create a meeting request). Since you have no direct supervisory control, it will do little good to demand cuts; in fact, a demand to cut budget might result in the loss of a service that matters most to you! Therefore, consider your strategy and your persuasive approach carefully as you prepare the e-mail. You may also consider whether to use a direct or indirect approach to the memo. Remember to craft a clear and complete subject line for the memo, provide all the information they need to attend the meeting, and close with the next steps or how to contact you for further information.

In addition, consider what you might want to send to your audience to help prepare them for the meeting. Include a list of the attachments you would include with this e-mail along with a brief explanation of why you would include them.

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