CIMA Operational Case Study (OCS) Pre-seen: Tendra Tents (November 2026–February 2027)

The headline numbers at Tendra Tents look encouraging. Revenue is T$23.756m, gross profit is T$6.945m, and the overall gross margin is close to 29%. Yet one product, Essential Solo, has a budgeted gross margin of only 5.4%, while Elite Basecamp reaches 40.1%.

That contrast is a useful way into the case. Tendra is not a business with one simple performance story. It is a growing outdoor-products company with a credible sustainable proposition, a wide portfolio, seasonal demand and several possible routes to growth. The challenge is deciding where to put money, capacity and management attention without damaging cash, quality or the brand.

The pre-seen gives you enough detail to make those judgements. The value comes from joining its details together, rather than treating each page as a separate subject to memorise.

Tendra is a business built around trade-offs

Tendra makes and sells tents and outdoor accessories in Teeland. Fredrick, Rhona and Talia founded the business. Their backgrounds explain its character: Fredrick brings outdoor-goods experience and overall strategic leadership; Rhona leads product development and sustainable material innovation; Talia leads sales and marketing.

The rest of the board matters when you consider how a decision could actually work. Rafael Ortega runs production. Lien Chen is responsible for people. Peter Trafford, the Finance Director, is the person who should challenge investment, liquidity, budgets and financial control.

This is more than a list of names. A proposal for a new tent range will not succeed because a spreadsheet says the margin looks attractive. Rhona has to establish that the product can be developed. Rafael has to confirm that it can be produced to the required quality and within available capacity. Talia has to show that customers and channels will support the price. Peter has to test the cash requirement and return. If the change affects skills or working patterns, Lien needs to be involved too.

The case places you in the Finance Officer role. That puts you close to these decisions. Your contribution is to make the financial consequences clear and to help management choose a workable course of action. It is not enough to calculate a variance or a return. You need to explain what it means for the business, who needs to act and what would show whether the decision is working.

The portfolio is deliberately uneven

Tendra has three tent ranges. Essential comprises Solo, Duo and Family products. Explorer has the same Solo, Duo and Family structure, with a higher specification. The premium range is Elite Compact, Elite Trek and Elite Basecamp. The business also sells sleeping bags, sleeping pads, mats and rucksacks.

That portfolio gives Tendra choices. A lower-priced Essential product may introduce a customer to the brand or create accessory sales. A premium Elite product may generate a stronger margin, but it could require more careful quality control, more expensive materials or a different customer proposition. The answer to a product decision lies in the evidence, not in the word “premium”.

The budget shows a clear margin ladder. Essential Solo is weak at 5.4%. Explorer Solo rises to 16.6%, and the strongest Elite product reaches 40.1%. Those figures invite questions. Is Essential Solo priced too low? Has its standard cost become unrealistic? Is it essential for acquiring customers, using spare capacity or selling accessories? Could a redesign, supplier change, minimum order quantity or price increase improve its contribution? A low margin is a prompt for investigation, not a conclusion by itself.

The way customers buy matters as much as the product they buy. Tendra sells through its website and through retailers. Website sales give greater control over pricing, presentation and customer data. Retailers create reach and volume, but the retailer price is lower and Tendra has less direct contact with the final customer.

The sales budget provides website and retailer prices and volumes by product. Use that information when a requirement touches promotion, pricing, channel strategy or growth. A retailer discount may be sensible if it secures profitable volume or reaches a segment that Tendra could not reach directly. It may be less attractive if a promotion simply moves existing website customers into a lower-margin channel. The equal website and retailer split for Elite products is particularly worth noticing. It raises questions about how the premium customer is being reached and whether the channel supports the intended brand experience.

A sustainable supply chain still has a cash cost

Tendra produces steadily through the year even though sales are seasonal. That helps the factory avoid sharp peaks and troughs, but it also means stock must be made before demand arrives. Inventory is therefore central to the case. Too little creates lost sales at the busiest point of the season. Too much consumes cash and creates a risk of slow-moving or obsolete stock.

The four production departments are Cutting, Sewing, Assembly and Testing, and Packing. Product Development, Raw Materials and Maintenance support production. Finished goods move to the Distribution Centre. Retailer orders go through an external logistics provider and website orders through a separate third-party courier.

That chain gives a number of points where a problem can arise: availability of materials, quality at assembly and testing, inventory accuracy, damaged goods, slow dispatch, weak hand-offs between teams or poor service from a third party. A recommendation about customer experience, cost reduction or growth should acknowledge the part of the chain it affects.

Tendra buys certified sustainable materials from long-term Teeland suppliers. It uses bulk purchasing to reduce deliveries and the related carbon impact. Supplier terms range from 30 to 90 days. These are sensible choices for a sustainability-led brand, but they should not be treated as cost-free. Bulk buying may improve price and reduce transport, while increasing inventory and working-capital exposure. Extending payment days may preserve cash in the short term, while damaging a supplier relationship or losing discounts. The right decision balances resilience, cash, quality and the environmental claim that Tendra makes to customers.

People also set practical limits. Tendra has 65 production employees, 12 in distribution and 19 at Head Office. A proposal that adds complexity, changes a production process or expands delivery commitments needs a credible plan for skills, capacity, recruitment, training and accountability.

The numbers need to lead to a decision

The actual results show a profitable business, but profitability is not the same as liquidity. Tendra generates cash from operations, invests in non-current assets, pays dividends and repays debt. Inventory, receivables and payables are all large enough to deserve attention.

A useful working-capital discussion is specific. For inventory, consider seasonal build, stock availability, holding cost and slow-moving lines. For receivables, consider credit terms, collection discipline, disputed invoices and retailer concentration. For payables, consider the effect on long-term sustainable suppliers and the value of any early-payment discounts. For cash, consider a rolling forecast and scenarios for lower demand or supply disruption.

The Explorer Solo cost card shows how the business develops its cost information. Standards are reviewed annually. Normal material losses are included. Overtime premium is treated as variable production overhead, and no idle time is budgeted. Overheads are allocated and apportioned before being absorbed using direct labour hours, with separate rates for each cost centre. Selling prices include planned discounts and promotions.

Those details matter when you are asked about a variance or a margin. An adverse result could come from material price, material usage, labour efficiency, overtime, idle time, product mix, volume, a changed standard or under-absorbed overhead. The Finance Officer should identify the cause before proposing a cure, then establish whether it is controllable and who can investigate it.

The budget process is incremental and involves limited operational-manager participation. That may make it harder to challenge assumptions before they become fixed. A stronger approach could bring production and sales managers into the planning process earlier, supported by scenario analysis and regular forecasts. The point is not to recommend a fashionable budgeting method. It is to give the business better information about demand, capacity, material costs and cash before a problem becomes urgent.

The three articles point towards live strategic choices

The supporting articles should not be treated as general reading. Each one gives Tendra a plausible strategic choice.

The smart-tent article raises the possibility of solar panels, USB ports, battery packs, sensors, alarms and ventilation-related features. This could support differentiation in a premium range, but it brings new questions about product development cost, technical suppliers, testing, warranty, repairability and the fit with a durable and sustainable outdoor brand. Tendra needs evidence that customers value the features enough to pay for them. It also needs to decide whether added complexity makes the product more attractive or less reliable.

The festival-tent article focuses on tents discarded after events and sent to landfill. Recycling materials into pellets and fabric, along with demand for lighter and reusable products, creates an opportunity for a more circular offer. A return scheme, repair service, trade-in model or product designed for recovery could fit Tendra’s sustainability positioning. Each option still needs a practical operating model: collection, transport, sorting, quality assurance, resale or recycling, cost and a credible environmental benefit.

The glamping article connects premium outdoor accommodation with comfort, design and sustainability. It could be an opportunity for the Elite range or for a business-to-business partnership. A partnership needs more than an attractive brand fit. Tendra would need to assess the customer base, order volumes, service-level expectations, payment terms, installation or maintenance needs, exclusivity and the sustainability claims being made. A limited pilot with clear measures is often a more sensible first step than a large commitment.

Tax is part of the commercial picture

Teeland corporate income tax is 30%. Accounting depreciation, amortisation and impairment are not tax-deductible. Plant and computer equipment receive tax depreciation at 25% on a reducing-balance basis, with a full year’s deduction in the year of purchase. Property depreciation does not receive a deduction. Tax losses can be carried forward indefinitely, but only against profits from the same business. Sales tax is 20%, with input and output sales tax netted monthly.

Keep those rules in mind if a requirement involves investment, asset replacement, pricing, a loss-making initiative or a cash forecast. Accounting profit, taxable profit and cash tax can move in different directions. A sound investment appraisal uses the tax consequences that apply to the decision, rather than relying on the accounting depreciation charge.

How OCS uses the pre-seen

The pre-seen is the business context. It is not a bank of questions and it does not replace the technical knowledge needed for the exam. The unseen material introduces the immediate scenario, the information to analyse and the requirement. Your task is to connect the two.

An OCS task commonly contains an email, report request or briefing from a named colleague, followed by new reference material. The recipient and the command verb matter. “Explain” calls for a clear, applied explanation. “Evaluate” requires balanced judgement. “Advise” requires a conclusion and a reasoned course of action. “Identify” is narrower. The required format matters as well: a report for the senior management team should be written differently from a response to the Finance Director.

Start by identifying the technical topic in the unseen material. It could be forecasting, pricing, break-even analysis, expected values, financial reporting, sales variances, performance measurement, tax or people management. The pre-seen will not teach those techniques. Students need the relevant syllabus knowledge before they can use the case facts well.

Then select the Tendra facts that change the technical answer. If a requirement concerns a smart Elite tent, the Elite margin profile, Rhona’s product-development expertise, Rafael’s production responsibilities, Talia’s route to market, Peter’s need to test investment and cash, the sustainable supply chain and technology risk are relevant. If the task concerns a sales-price variance, the channel mix, retailer pricing, competitor pressure and product margins may matter more. A good answer does not repeat the case. It uses the facts that make the analysis specific to Tendra.

Apply the technique to the information given. A break-even chart needs to be interpreted using its assumptions and limits. An expected-value calculation needs an explanation of what risk neutrality means and why the probabilities may be uncertain. An accounting requirement needs the correct accounting treatment, not a general comment about strategy. A KPI requirement needs measures that can genuinely be calculated from the information available and that would help the relevant manager make a decision.

The marks reward this combination of technical accuracy and application. A generic textbook answer will usually be limited, even when the theory is correct. A case-only answer that ignores the technical requirement will be limited too. The stronger response explains the relevant technique, applies it to the new evidence and uses the pre-seen selectively to show that the writer understands Tendra’s commercial position.

Not every requirement ends with a recommendation. Some will ask you to explain, calculate, interpret, compare or identify. Where advice is requested, the recommendation should follow the analysis and should be proportionate to the evidence. Where advice is not requested, answer the question that was asked.

Before you write, check that you can answer four questions: Who am I writing for? What exactly am I being asked to do? Which technical knowledge is needed? Which Tendra facts make the answer more relevant? That is the practical link between the pre-seen and the exam.