Recent rumors among industry forecasters regarding the expectation that OPEC would not increase production before the summer of 2000 has had a profound effect on crude oil prices. This information was used by UDS management in effectively forecasting improved returns (10-K filing: Annual report, 2000). The business was in a position to use this information, along with other marketplace indicators, to enhance production at its refineries so that you can maximize the benefit on the resulting greater margins.
The charts below show the marketplace environment for oil during 1996 --97. The third chart shows that UDS enjoyed continued growth through this period. Successful information management was in large component responsible for this achievement.
Perhaps far more importantly, the data recorded via these systems was offered to corporate management for use in determining which retail outlets were under performing. This information, as well as data on the demand for convenience store outlets, enabled UDS to make a profitable decision with regards to its under performing Michigan assets. Information concerning an enhance inside demand for existing convenience store outlets was communicated to management at a time after the business was considering closing its Michigan stores. Thus, UDS was instead able to negotiate the sale of all of its Michigan assets for your tidy profit of approximately $93 million (10-K filing: Annual report, 1999).
One area to which the company ought to pay special attention could be the reporting procedures for capacity environmental violations. These kinds of violations can price a business millions. Often, they can be headed off or mitigated by prompt action on the part in the company. This sort of action cannot be taken, however, if the correct management teams aren't made right away aware of the capacity problem. Thus, clearly defined procedures with regards to capacity environmental issues ought to be in place, and well known throughout the company. By allowing employees as direct a line as feasible to the management team responsible for reacting towards problem, a high level of confidentiality can also be nonetheless be maintained.
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