Although the sales of the company have declined significantly their cost of goods sold has remained high, especially between 1994 and 1995 the company had a decline in sales and an increase in cost of goods sold. This is evidence the company is having problems passing costs to its consumers. The company is not very asset intensive and its decrease in total asset turnover can be due to their decrease in sales, however their rather low total asset turnover which is also decreasing from 2.1 to 1.5 shows their assets are not being used very efficiently. As a result of their sales decrease their Fixed Asset turnover also decreased from 7.0 to 5.4. The decrease in sales and increase in competition also means more shelf time for their inventory which has increased from 103 to 129, which makes Haefren Baum’s price cutting strategy questionable. The company is already experiencing a loss of revenue due to their lower prices; however this is not stimulating the number of different sales because the inventory is sitting in the…
With this company the inventory management ratios further indicate that there may be an issue with inventory and inventory controls. The inventory turnover ratio is lower than the industry average and the days’ sales in inventory are high. A company wants to turn inventory quickly to reduce storage costs, and Garners’ does not achieve this.…
The increase in the length of time that inventory is on hand coupled with an increase in the percentage of cost of goods sold (since 2010) could be the result of a weakened economy making it necessary to reduce the price of the product. Despite the reduced pricing, inventory still builds up indicating declining consumer demand for the products. This evaluation is further exemplified by the steady rise of the gross operating cycle from 2007 to 2011 (2007:185 days, 2011: 252 days). The gross operating cycle has shown a slight decrease in 2012 and 2013 which may be a good sign that the recent restructuring is working, however revenues have declined over the past two years and the company has incurred significant costs associated with restructuring as well impairments of inventory.…
Department managers are responsible for maintaining a high customer service level by carrying and maintaining merchandise in stock, while at the same time preventing excess service levels. Kudler’s policy is that adequate levels of inventory should be maintained and this customer service level is discussed on the company’s monthly operations review meeting. Kudler’s general goal has been a customer service level of 95% of items carried. This means that 95% of the time, customers will find the availability of merchandise in the store. Kutler uses historical data on items and quantities sold in the last two to three years. This data provides information to forecast which items and at what quantities to keep in…
The University of Phoenix Summer Historical Inventory Data is the source for developing Team B’s inventory management proposal. Annual trend lines were plotted in Microsoft Excel © to display the inventory amounts for each year. The trend line in this case is positive, which indicates that the likelihood of inventory levels in the subsequent years will continue to rise without considering any additional factors that may influence the business. Factors to support the observation include economic instability from stock market volatility, a decline in consumer confidence, severe weather, and acts of terrorism. Table 1 shows the existing data and includes the fifth year projections. Figure 1 displays the trend…
Here we present the marketing activities that show potential for the organization’s growth in seasonal demand that occurs during this period.…
In this paper, the team analyses the case of Rogers’ Chocolates to introduce the company,…
First we must get rid underperforming sales people to save cost. The saved cost will allow Gangong to explore enhance brand awareness in areas that are profitable for us such as Ontario. Next our sales force must also change the way they sell. We must take our highest achieving sales people and focus them on selling private label contracts. By implementing the above options we can expect an improvement in the firm’s profitability through increase sales and lower cost (exhibit 2). Lastly our accounts receivables are much higher then the industry medians and our inventory cost are increasing every while our finished goods are increasing (exhibit 4). This issue can attributed to the fact that the process to purchase them is flawed (bad forecasting, frozen preferences). We must hire people in our staff that can do a more effective job of collecting money (exhibit 4). Next we must improve our forecasting methods (exhibit 4). Once this is accomplished we will certainly see an improvement in the profitability of the…
Currently, the business is acquiring greater sales due to its customer acquisition program combined with other marketing efforts (i.e. increase in catalogue circulation, more advertisements). As well, the company is utilizing new technologies to improve its inventory system, its data processing programs, and its order system. This allows the company to provide customers with accurate and efficient services. Furthermore, the company provides its employees with many attractive benefits,…
The firm is not able to realize economies since they are not able to produce larger orders as easy. They are not able to meet capacity utilization within the plant due to operational inefficiencies. They can only produce small batches.…
Failure to recognize the scope of the business can keep it from future growth. This is product oriented businesses rather than customer oriented businesses.…
The alternatives for review are the following: expand retail, expand wholesale, expand mail order, hire a sales representative, increase vertical integration of all operations, extend product lines and rent out the factory. I recommend you hire a sales representative to take on wholesale operations, that you drop mail order operations, and that you invest the majority of your time and efforts towards retail, while increasing the vertical integration of the remaining segments. You should also try to rent the factory out during off-season and maximize manufacturing capacity in-season. I am confident that implementing these changes will cause the P.E.I Preserves to see continued profits and growth.…
The data that was gathered demonstrated a new product reached a high peak during the first couple of weeks and maintained stable, however changes in production schedules have exceeded demand. Poor forecasting are some of the major issues and low inventory, an improvement in a regression analysis of past data will increase areas of improvement.…
The company’s main operational problem is being able to maintain their goals of competitive pricing, time and effort saving, and providing good quality, while becoming operationally profitable.…
o Significant increases in sales and shortage of available raw material cause problems in the production process…