Program Objectives

The following list represents the Key Program Objectives (KPO) for the Appleton Greene CEO In Training corporate training program.

CEO In Training- Part 1- Year 1Appleton Greene

  1. Part 1 Month 1 Introduction/Background – The primary objectives of session 1 are 1) get the participants up to speed on the apple industry and 2) begin developing the skills and knowledge required to manage an apple processing company in this highly competitive industry. One measurement of a participant’s success will be their Return on Equity as calculated at the end of the program. How well they do will hinge in large part on the many management decisions they make as they build and operate their apple processing company. In the first session, participants will receive an overview of the program and the apple industry simulation. Each subsequent session will begin with a discussion of the previous session’s assignment and a review of the prior session’s lecture topics. Participants will also have another opportunity to discuss the apple industry case materials with the Certified Learning Provider. The lecture topics for session 1 will include the concept of limited liability; the various types of entities (C-corporation, S-corporations, Limited Liability Companies and partnerships), and the tax implications of each. Next the group will review the general framework of an integrated financial model including the interplay between the projected income statement, balance sheet, cash flow statement and their respective drivers and assumptions. The simulation topics for session 1 will include assigning one simulation apple processing company to each participant and reviewing how random factors such as weather and changes to customer demand will impact various aspects of the simulation. The simulation assignment due prior to session 2 will require each participant give their company a name and reread “The Pack” simulation case materials with the benefit of the information they have received in session 1.
  2. Part 1 Month 2 Macroeconomics/Markets – The primary objectives of Session 2 are 1) familiarize the participants with the frozen apple market including the key players, their geographic locations, and the major product lines; 2) make participants aware of the critical systemic issues that impact the industry and 3) provide participants with a general understanding of basic macroeconomic concepts. After reviewing the assignments and lecture topics from session 1, participants will submit their company names and will again have a chance to review/discuss the apple industry case materials, the program overview and the apple industry simulation. The lecture topics for sessions 2 will be comprised of general macroeconomic concepts including GDP, GNP, supply and demand, and a high-level overview of the interplay between the three major segments of the economy; consumers, business and the government. In preparation for developing the financial model, participants will receive a general review of basic accounting principles. The simulation topic for session 2 will include a review of the frozen apple market, the key players, their locations; the major product lines; and the major issues that affect the industry and require consideration during the simulation. The assignment due for session 3 requires each participant to develop a customer/supplier matrix from the case materials provided which will be used later to support the supplier and customer bidding process.
  3. Part 1 Month 3 Capital Budgeting – The primary objectives in session 3 are 1) familiarize participants with the infrastructure required to produce and store frozen sliced apples and 2) provide participants with a general understanding of how to develop a capital asset budget, depreciation methods and requirements to optimize a production facility for maximize throughput. Following a review of the prior sessions lecture topic and simulation assignment, the lecture topics to be covered will include capital asset budgeting, depreciation methods and throughput optimization. The area of focus for the integrated financial model will be the projected income statement and its respective revenue and expense drivers and assumptions. The simulation topic will cover the various equipment required to construct and operate an apple processing facility including useful purpose, capacity, cost, useful life, space requirements, staffing needs and financing parameters. The simulation assignment will require each participant to design a processing facility with a target maximum capacity based on their expected customer/supplier matrix and general market information provided in the case materials.
  4. Part 1 Month 4 Staffing Plan – The primary goal of session 4 is to expose participants to the many issues that arise while managing “human” capital. Employees are the key to any organization’s success. They are also the source of many issues and often require creative solutions to keep the organization headed in the right direction. Participants will also receive an overview of payroll and HR related issues including a discussion of ethical matters that arise while operating a business with many employees. Following a review of capital budgeting, depreciation methods and plant optimization, the lecture topics will include the ins and outs of payroll processing, setting compensation levels, and the wage theory that purports 90%+ of all business costs can be traced back to labor/wages and why this is important. The financial model portion will cover the general framework for the projected balance sheet and its respective asset, liability and equity drivers and assumptions. The simulation topic will include a discussion of the staffing requirements for the simulation companies and questions regarding the development of the staffing plan including wages, bonuses, incentive plans, payroll taxes, benefits, pay cycle, etc. The simulation assignment requires each participant to develop a staffing plan based on 1) the plant and equipment staffing requirements and 2) the administrative staffing framework provided. This first round of compensation setting will form the basis for a discussion in the next session regarding compensation for all levels of employees in the organization.
  5. Part 1 Month 5 Product Costing – The primary objective of session 5 is to expose participants to the methods and issues arising when developing a product costing standard. This exercise will become a critical element to preparing bids for raw apples and customer contracts later in the program. Following a review of payroll issues and staffing requirements for the simulation companies, the lecture topics will include a discussion of the various methods for allocating direct and indirect costs of products/services. Areas of focus will include Job Costing, Process Costing, Direct Costing and Throughput Costing. An examination of Throughput Analysis and Constraint Management will aide in the optimization of the product costing cycle. The integrated financial model portion will include a review of the general framework for the projected cash flow statement; its interaction with the other financial statements, the impact changes to asset and liability accounts have on cash and the components to include in the calculation of working capital for operations vs investment or financing. The simulation topic in this session will include the discussion of all the direct and indirect components included in the production of frozen sliced apples as outlined in the case, including raw apples, yields, byproducts, ingredients, packaging, labor, utilities, freight and storage of raw apples and frozen fruit. The assignment requires each participant to develop a cost matrix for a single unit of frozen sliced apples including all inputs identified in the case and discussed during the session. The matrix will be dynamic to adjust for varying levels of throughput required depending on the quantity of raw apples ultimately acquired and customer contracts awarded.
  6. Part 1 Month 6 Capital Stack – The primary objective of session 6 is 1) expose participants to the methodology for constructing interest rates and 2) the types of debt and equity available to finance the purchase of fixed assets and fund working capital for their simulation companies. Following a review of product costing methods, this session’s lecture topics will include a discussion of the construction of interest rates, the Fisher model, bond math and the yield curve. Participants will also review the various types of financing available to complete their capital stacks required to fund a production facility including capital vs. operating leases. For their integrated financial model, participants will receive instruction on the general framework for the various financing sources covered in the lecture and how to model them. The simulation topic for this session will include a discussion of the specific capital requirements needed to complete the funding of the simulation company balance sheet including inventory revolvers, equipment loans and leases, bank lines of credit and mortgages for real estate assets. The assignment will require each participant to develop the loan schedules needed to fund the formation of their business, with the remaining capital required to be funded with equity. They will also link the funding and amortization schedules into their balance sheet and cash flow statements and the interest charges into their projected income statements.
  7. Part 1 Month 7 Risk Analysis – The primary objectives of session 7 include 1) preparing participants to submit their Price Sheets (bids) to purchase raw apples from the grower community in each apple growing region; 2) expose them to the various types of risk and methods to measure it, and 3) prepare participants to update their integrated model with last year’s data included in the case provided. Following a review of interest rate construction and funding options, the lecture topics will include a discussion of the various types of risk and how risk is measured. The integrated financial model portion will cover the necessary steps to update the model with last year’s apple crop and customer contract demand data. This will constitute a dry run to ensure all participant’s models are constructed properly and achieving identical results. Later, participants will update their models with their own current year’s data based on their individual bids for raw apples and customer contracts. The simulation topic will cover the apple bidding process and the effect random variables including frost, wind, bees, drought, rain, and rot may have on their bidding strategies. The assignment requires each participant to submit their raw apple bids for each of the six apple producing regions. Only the top five of the six bids in each region will be awarded apples based on a declining percentage scale of 30%, 25%, 20%, 15% and 10%, respectively. In each region, the processing company offering the lowest average price will receive zero apples from that region. Participants will also update their integrated model with last year’s crop and customer demand data to ensure the model is complete and working properly.
  8. Part 1 Month 8 Breakeven Analysis – The primary objectives of session 8 are 1) prepare participants to evaluate fixed vs. variable costs and 2) review the key elements to performing breakeven analysis. Instruct participants how to determine and submit their production schedules for their simulation companies. Following a review of the various types of risk and how risk is measured and mitigated, the lecture topics will include a discussion of fixed vs. variable costs and the key elements to performing breakeven analysis. The updated financial model will be used to perform a breakeven analysis using each participants’ plant design and apple bid results. This will aide in developing customer contract bids later in the program. The simulation topic includes a discussion of the finished product bidding process and the considerations that freight costs, yield, storage and byproduct revenue may have on the development of the customer contract bids. The assignment requires each participant to submit a production schedule and an analysis of the impact that apple yield, inventory build, storage costs and by product revenue’s will have on their ultimate results.
  9. Part 1 Month 9 Sales Forecasting – The primary objective of session 9 is to familiarize participants with sales forecasting techniques, both qualitative and quantitative in nature. Participants will also be instructed on how to develop and submit their customer contract bids. Following a review of production and the impact production costs, inventory management, storage costs and by product revenue have on performance, the lecture topic will focus on sales forecasting using both qualitative and quantitative techniques. The financial model will be updated to calculate profitability using this year’s raw apple cost based on the grower commitments and projected finished apple contract bids. The simulation topic will include inventory management and its related storage and financing costs. The assignment requires each participant to submit their customer bids and their updated model based on their expected contract bidding results.
  10. Part 1 Month 10 Financial Analysis – The primary objectives of session 10 are 1) familiarize participants with the concept of time value of money and business valuation and 2) instruct them on the parameters for handling excess inventory and customer contracts in search of optimal operating results. Following a review of the awarding of customer contract bids, forecasting techniques and the updating of the models based on projected contract bidding results, the lecture topics will include the time value of money, net present value, IRR calculation and business valuation techniques. Participants will receive instruction on how to incorporate a valuation of their business into their model using net present value and IRR calculations. The simulation topics will include a discussion of strategies for reselling excess raw apples and customer contracts to maximize results as well as a review of the many real-life differences between the simulation and the actual management of an apple processing company. The assignment requires each participant to submit proposals to buy/sell excess apples or contract capacity and submission of an updated version of their model.
  11. Part 1 Month 11 Business Cycle – The primary objectives of session 11 are to familiarize participants with the business cycle, bankruptcy, and ratio analysis and prepare them to submit the final version of their financial model. Following a review of the time value of money, net present value, IRR calculation and business valuation, the lecture topics will cover bankruptcy, Chapter 7 & 11 and workouts. Additions to the integrated financial model will including a ratio analysis and ROA, ROI, ROE calculations. The simulation topic will discuss the final model and review the final return analysis form to be submitted for the final session. The assignment requires the participants to add the ratio analysis to the final model as well as prepare and submit their final return analysis form along with the final model.
  12. Part 1 Month 12 Program Review – The primary objectives of the final session include determining the results of the simulation and performing a detailed review and Q&A of every aspect of the program including lecture topics, the integrated model and the case simulation. Following a review of bankruptcy, Chapter 7 & 11, workouts, and ratio analysis; the lecture portion of the session will be dedicated to a summary review and discussion of all the lecture topics and answers to any related questions. The group will also review and discuss all aspects of the completed integrated financial model and any related questions. The simulation topic will include a discussion and Q&A regarding the simulation and serve as an opportunity to collect feedback from the participants regarding the program, its strengths and areas for improvement. The final assignment: each participant as a “CEO in Training” participant is encouraged to leverage this program to accelerate their journey towards a meaningful leadership role within their organization and possibly someday stepping into the ultimate leadership position of CEO.