Question

Giant Eagle is a grocery store chain with stores located in Indiana, Maryland, Ohio, Pennsylvania, and West Virginia. The company installed refrigerator doors on the dairy section in many of its stores. Previously, the dairy section was refrigerated but had no doors.

The refrigerator doors will reportedly use 78% less energy than the amount of energy used when there are no doors on the dairy section.

Questions:

1. What factors could be relevant in Giant Eagle’s decision about whether to install the dairy doors or not? List as many factors as you can think of; use your imagination.
2. Of the factors you listed in Question 1, which are qualitative in nature? Which are quantitative considerations?
3. What managerial accounting tools might be used by Giant Eagle in evaluating whether to purchase and install the dairy doors? List as many tools as might be useful and discuss how each could be used in this setting. What tool would you consider most useful? Why?
4. What other initiatives a grocery store could take to promote “green” choices? Provide a few examples.
5. Given the examples you provided in Question 4, discuss what criteria managers should use to determine whether they could pursue these “green” initiatives.

Answer 1

The factors that are relevant in Giant Eagle decisions to install the dairy doors are as follows:

a) Cost cutting- bill will be less

b) Energy Saving- Because of the door, the energy will be saved upto 78%

c) Longevity of the product

d) Less Carbon foot print

e) Durability of the product

Out the above Cost cutting and energy saving is quantitative in nature, whereas, Longevity of the product, Less Carbon foot print and Durability of the product are qualitative in nature. Accounting tools that can obtained are Financial Forecasting Tools and Cost Allocation Analysis.

Few green initiative that company can take

a) Embrace renewable energy

b) No use of Polythene