Planning and control decisions, Internet company. WebNews.com offers its subscri
ID: 2459408 • Letter: P
Question
Planning and control decisions, Internet company. WebNews.com offers its subscribers several services, such as an annotated TV guide and local-area information on weather, restaurants, and movie theaters. Its main revenue sources are fees for banner advertisements and fees from subscribers. Recent data are as follows:
Month/Year
Advertising Revenues
Actual Number of Subscribers
Monthly Fee Per Subscriber
June 2009
$ 415,972
29,745
$15.50
December 2009
867,246
55,223
20.50
June 2010
892,134
59,641
20.50
December 2010
1,517,950
87,674
20.50
June 2011
2,976,538
147,921
20.50
The following decisions were made from June through October 2011:
a. June 2011: Raised subscription fee to $25.50 per month from July 2011 onward. The budgeted number of subscribers for this monthly fee is shown in the following table.
b. June 2011: Informed existing subscribers that from July onward, monthly fee would be $25.50.
c. July 2011: Offered e-mail service to subscribers and upgraded other online services.
d. October 2011: Dismissed the vice president of marketing after significant slowdown in subscribers and subscription revenues, based on July through September 2011 data in the following table.
e. October 2011: Reduced subscription fee to $22.50 per month from November 2011 onward.
Results for Julyâ??September 2011 are as follows:
Month/Year
Budgeted Number of Subscribers
Actual Number of Subscribers
Monthly Fee per Subscriber
July 2011
145,000
129,250
$25.50
August 2011
155,000
142,726
25.50
September 2011
165,000
145,643
25.50
1. Classify each of the decisions (aâ??e) as a planning or a control decision.
2. Give two examples of other planning decisions and two examples of other control decisions.
Month/Year
Advertising Revenues
Actual Number of Subscribers
Monthly Fee Per Subscriber
June 2009
$ 415,972
29,745
$15.50
December 2009
867,246
55,223
20.50
June 2010
892,134
59,641
20.50
December 2010
1,517,950
87,674
20.50
June 2011
2,976,538
147,921
20.50
Explanation / Answer
1.
a is planning decision
b is planning decision
c is planning decision
d is controlling decision
e is controlling decision
2.
Example of planning decision
A. Fees for banner advertisement will be increased from july onwards by 100 per banner.
B. Offered online payment services for the subscribers
Controlling decision
A. Removed the hangout and delays in services
B. Upgrade the accurate information provided to customer about weather , movies,.and restaurants